DIGITAL PROCUREMENT
engineering . That is where the new capability is going , and that ’ s where companies should invest overall . When you look at the total size of the function , it will shrink because of the loss of these operational people . But it ' s going to be a completely different function , with stronger value generation , different roles , and overall more strongly led by digital .”
Leveraging AI for Procurement Excellence Daniel explains how Big Data is helping procurement sift through it all and is bringing a whole new meaning to strategic procurement . “ In the past , procurement has been very much limited to only driving savings . Companies didn ’ t ask for innovation or sustainability the way they asked for quality , which is , for us , one of the core factors . Now today , big data is making this possible . Why ? Because today companies have large supplier bases . Even smaller companies tend to have thousands of suppliers , and large corporations get into the hundreds of thousands .
“ Big Data is providing us with the right insight on which suppliers , in particular , are most relevant and best suited for the objective , whether it be innovation , better quality control , etc .”
A ) Supplier Selection As an example , Weise explains that big data is capable of telling us which suppliers have the most potential for innovation by looking at determining factors such as size and legal entity . “ It turns out that core innovation fields are oftentimes triggered by medium-sized companies .” Weise points to BioNTech ’ s development of the COVID vaccine , outsourced by Pfizer , as evidence of the power of medium-sized companies to innovate .
“ The days when you focused only on hitting suppliers with a stick to get cost savings are clearly over ”
DANIEL WEISE , MANAGING DIRECTOR AND PARTNER , BCG
It also turns out that family-owned companies typically spend more on innovation than non-family owned companies , hence why they look at the legal entity as a determining factor . Proving that innovation is born out of necessity , Weise says high-cost regions typically have to be more innovative than lowcost regions .
Much like a love matching service , big data will take all the relevant factors and data points and help you find just the
66 September 2021