Is Procurement Operating in the Dark?

Take a single piece of a picture puzzle, and after looking at it, are you able to see the whole picture?

Now stare at it for another few minutes. Do you see anything yet? We suspect that you could look at that single puzzle piece from any angle for as long as you like; you won’t see the big picture.

Now answer this question: would you buy a picture puzzle based on a single piece? 

It is absurd even to ask such a question, yet that is what organizations are inviting their procurement teams to do when using data to analyze spend and make the best possible decisions.

This article will broach the subject of dark data from the standpoint of what it is and why procurement should understand what the IT department is doing about making meaningful data accessible to the organization.

Near-Zero Visibility

At the risk of sounding like a broken record, i.e., in multiple earlier posts, digital transformation of the procurement function is impossible without clean data. However, never mind clean data; how about any data.

The April 23^rd, 2021 article “Getting beyond the Twilight Zone of data uncertainty” reports that “less than 5%” of all collected data is analyzed. Contributing to the problem is the fact that 55% of all company data is dark.

What is dark data? It’s the information assets organizations “collect, process and store during regular business activities, but generally fail to use for other purposes,” including analytics, business relationships, and direct monetization.

Is the single puzzle piece example from the opening paragraph making a little more sense now?

To distill it down further, out of all the data that companies collect, 55% is dark, and from the remaining 45%, only 5% is analyzed. Once again, this is not a procurement-specific problem but an enterprise-wide issue.

Against this backdrop of near-zero visibility, how can procurement do its job? 

A “Unified” Approach

For those who may think that procurement is the proverbial island in the data lake—in other words, the problem is a company versus department issue—think again.

The recently released Deloitte 2021 Global Chief Procurement Officer survey highlights the importance of data no less than 45 times, including identifying poor quality data as one of the “top three barriers to the effective application of technology in procurement.” 

So, forget about automation freeing up procurement professionals to focus on more strategic activities, as the dark data problem IS the definitive procurement problem in 2021.

Addressing this problem can only be done on an enterprise-wide basis, starting with introducing a “unified” platform that facilitates a collaborative environment that develops more efficient methods of extracting data.

What is a unified platform? Simply put, it is an open and unified data analytics architecture that creates a collaborative environment that enables “data teams” to build solutions together.

Beyond a Piece(meal) Approach

While there is a wealth of valuable insight in the latest Deloitte survey results, the absence of any reference to architectures such as Databricks or Platform-as-a-Service delivery models is confusing.

On the one hand, the paper talks about the importance of analytics and data management tools. However, emphasizing the utilization of these tools without talking about the importance of unified platforms is equivalent to redoing the interior of a car that doesn’t have an engine. It may look good, but you are not going to get far.

Based on the above, procurement must cooperatively engage with IT to turn dark and under-analyzed data into actionable insight by becoming an active partner in introducing a unified platform.