Posted by  Paul Cook  Published on  20 May 2014
  • Procurement Strategy
  • Spend Analytics

As data continues to play an increasingly vital role for Procurement, there are a number of barriers that need to be overcome to enable the true value of data to be extracted in an organization.

Disparate Data Sources

With increasing volumes of data, comes increasing numbers of data sources, within the organization and beyond. It’s a common occurrence that estimation of the number of data sources pales to the number of actual sources – sometimes by as much as 20 or 30. It’s not an insignificant problem, and impacts on the success of any procurement initiatives - without a single source of truth and unified view of organizational spend, it is an uphill battle for procurement teams to achieve their potential.

Siloed Data

The next issue for procurement teams once they have accurately identified data sources, is unifying these data sources. This is frequently problematic as the data sources are rarely using the same software, which means results in increased resources for extraction due to the differing technical requirements of each system. This means that procurement has to rely on the IT department to support its requirements, leading me to the next barrier:

Disparate Departments: IT/Procurement

Traditionally, there is no love lost between the IT and procurement departments, and the need for a single source of truth is unlikely to put procurement in IT’s good books. With IT departments already under increasing pressure with resources, the undertaking of a seemingly time-consuming project such as this, puts added strain for all parties.

Lack of Investment in IT

There are further IT problems as there is limited investment in the IT needed to support procurement’s data requirements, and no real policy within IT in terms of how key spend data is captured and unified, hence there is a lot of department-level solutions with multiple different providers. Added to that, a lot of data is held locally on laptops, adding an extra layer of complexity to solving the data integration challenge.

Lack of Data Ownership

One of the biggest overarching barriers to the whole issue, is that within organizations currently, there is often no data owner, which means that nobody is really in control of it and how to maximise it as a key business driver. Without this, there is no internal champion to make the potential value of data clear and really demonstrate how best to utilise it as a key business driver.

Without successfully overcoming these, Procurement will always be one step behind in the journey to spend success. In my next post, I will look at the steps that procurement can take to overcome these barriers.