The digitization of the procure-to-pay process has landed troves of data in the laps of the enterprise. Now, the trick is knowing what to do with it.
As procurement has gone digital, supply chains have gone global and B2B trade is now exposing businesses to more risk than ever before. The data about suppliers and supply chains now at companies’ fingertips can help mitigate those risks and boost profits, said Jaggaer’s Zia Zahiri, chief technology officer (CTO), and Raj Aggarwal, product marketing manager for eProcurement and accounts payable.
Jaggaer, which provides businesses with a source-to-pay platform, announced earlier this month that it is undergoing what it described as “sweeping” changes to its offering as a direct result of shifts in the eProcurement space — many of those shifts, the executives explained in a recent conversation with PYMNTS, stepping from the modern possibilities and challenges presented by Big Data.
“We’re moving toward more rapid deployment, toward understanding the value of analytics and how it plays a role in everything we do,” said Zahiri, speaking on the ongoing evolution of the eProcurement space but also nodding to the overall changes Big Data propels onto overall societies.
“Everybody in the market in technology today talks about Big Data,” added Aggarwal. In eProcurement, he continued, that plays a significant role in how supply chains are managed and how the buyer-supplier relationship is formed.
Big Data, the executives said, is an inescapable reality for many.
“If you look at us as a society, Big Data is playing a amor role in everything that we do,” said Zahiri. “You don’t go to a restaurant anymore unless you check out the ratings. And if this information is inaccurate, you lose trust and faith in that information — and if it becomes more accurate, then your decision becomes better, and you will rely on those tools more and more.”
As consumers, using the power of data analytics provided by digital platforms is second nature.
“That should be happening for the enterprise,” the CTO added.
In procurement, that means understanding behavior of companies to manage suppliers and mitigate risk throughout the supply chain. Here, too, data accuracy is critical.
“Almost every ERP solution has a supplier management solution, and everyone you talk to is unhappy about that supplier management solution,” Zahiri said. “The information managed in that particular product across multiple entities and countries is not real-time.”
Technologies like APIs that can facilitate data sharing between suppliers, and ERP systems and other parties turn that supplier management platform into an effective tool, he noted.
There are a few ways data analytics capabilities can be wielded for the purposes of promoting the strategic nature of eProcurement. The executives pointed to supply chain risk from, for instance, climate change or geopolitical occurrences across markets.
“Risk can be thought of in many ways,” said Aggarwal. “You may see a lot going on with climate change, whether there will be any interruption in the supply chain — that, effectively, is a risk.”
There are ways to use Big Data to enhance forecasting and manage inventory or understand variations and fluctuations within supply chains. In supplier management, Big Data not only enables a company to understand a vendor, but also to take into consideration the fact that maybe that supplier is part of a broader conglomerate and include information about that supplier’s own partners when exploring how the entity will make an impact on the supply chain. Or, if a company’s social media page suddenly sees a spike in hits, information from that platform can, too, be used to adjust procurement and supply chain management approaches. Going further still, the executives highlighted an executive order or changes in a company’s tax policy that may impact a supply chain.
The opportunities seem to be without bounds, and indeed, Zahiri said, there can be millions of sources of data into which an enterprise can tap — some easier than others to analyze and make sense of.
“You can have millions of signals, but we need to pick a few to start with,” he stated.
Of course, Big Data has given rise to new debates regarding data privacy and ownership. In eProcurement, that conversation is complex, considering there could be multiple parties owning some piece of data. Today, instead of data being transferred via document, there are depositories in which Big Data exist. Businesses are sharing information and contracts across the globe by offering a single portal accessible by partners all across the supply chain, blurring lines with regards to who owns that information. Zahiri said he predicts industry standards will develop to implement best practices on how to ensure data is independent and secure.
Zooming out, what Big Data really amounts to in the world of eProcurement and source to pay is a paradigm shift, both Zahiri and Aggarwal said. And just as corporates are tasked with understanding how Big Data can be an effective tool to mitigate risks that range from climate change to a sudden spike in demand, Jaggaer will be tasked with understanding how to enable its corporate clients with those capabilities.