Big Data is more than a fast-moving buzzword. But what exactly is big data? How usable is mass data? And how can companies – especially purchasing – benefit from big data? We have made ourselves smart for you, researched the latest studies and results on the subject, and summarized the most important things below. Big Data in Purchasing? After reading this article, you will know more about it!
What Is Big Data
It is used to describe a volume of data that is so large and complex that it can no longer be recorded or processed with classic software and hardware. There is no clearly defined limit from which a mass of data can be described as big data. But how do such large amounts of data come about?
To answer this question, one must first get a feel for the dimension of data. Let’s use the human brain for this: if you compare the storage capacity of the human brain with values for digital storage, around 2.5 petabytes fit into it. That’s a one with 15 zeros. It sounds like a lot. But it is not: The amount of data circulating on the Internet and stored in storage worldwide is often higher.
Nobody knows How Big The Internet Is
There is talk of much more significant amounts of data in the global network. This is where numbers are juggled that hardly anyone knows: exa, Zetta, or even yottabytes. An exabyte corresponds to one billion gigabytes, a zettabyte is 1,000 exabytes, and a yottabyte is 1,000 zettabytes or one million exabytes. The exact size of the Internet is tough to determine – especially since it doubles about every two years.
Scientists at the UC Berkeley School of Information in California began estimating the extent and growth of the amount of data produced worldwide around the year 2000. The result is impressive: Between 1999 and 2002, the planetary data volume grew from 2.1 to 3.2 exabytes to 3.4 to 5.6 exabytes. A 2017 study by the American hard drive manufacturer Seagate on global data growth showed that around 163 zettabytes (i.e., the 163 with 21 zeros) of data would be generated worldwide in 2025. That is ten times the amount of data compared to 2016 (16 zettabytes) and corresponds roughly to all series and films currently stored on Netflix – viewed almost 500 million times.
Opportunities And Challenges Of Big Data In Purchasing
One thing is clear: in purchasing, the intelligent analysis and interpretation of vast amounts of data offer many opportunities. In strategic purchasing, for example, big data can be used in supplier evaluation analysis based on company data which suppliers are relevant and can be sorted out. Commodity indices, statistical data, price level facts, product and supplier discussions from the Internet provide the information pertinent to the decision. In operational purchasing, big data analyzes can be used to improve scheduling. Here, mass data enables the precise analysis of goods and volume flows. The entire procurement process can be examined for lead times, deviations from the target, or unnecessary cost drivers.
Are There Technical Possibilities For Big Data In Purchasing?
In principle, the technical prerequisites for such data analyzes are already given by today’s enterprise resource planning systems (ERP systems). Nevertheless, only 21 percent of purchasing managers have a clear goal or vision regarding big data, as a study by the BME and the management consultancy Wyman Brothers showed.
Why is it that most purchasing managers have recognized the potential of big data in purchasing but are having trouble implementing it? For Friedrich Klement from the SAP consulting company Phoron, the hurdles when using big data in purchasing are primarily organizational: “On the one hand, many companies do not know which data they need or already have. On the other hand, this data has to be put into context so that usable key figures emerge from which recommendations for action can be derived,” says the procurement expert.
Several measures are necessary for this: starting with training courses and trained data analysts to comprehensive cooperation between the dispatcher and the buyer. However, to successfully implement these steps for the successful use of big data for purchasing, everyone must be convinced of the possibilities of mass data. They knew that the number of employees in procurement and supply chain management could decrease sharply in the next few years due to big data.
Also Read : Big Data In Medicine: What It Takes To Save Lives