Big Data is changing the way we think about procurement. In today’s digital-first environment, the volume, speed, and variety of data being generated has exploded, far beyond what traditional systems can handle. Whether you’re optimising costs or managing supplier performance, Big Data in procurement opens the door to smarter decision-making and competitive advantage.
What Is Big Data?
Big Data refers to large, complex, and fast-moving datasets that cannot be easily managed by conventional software. Its characteristics are captured by the 5 V’s:
- Volume – Enormous quantities of data
- Velocity – The speed at which data is generated and processed
- Variety – The diverse formats and sources of data
- Veracity – The accuracy and reliability of data
- Value – The strategic business benefits that can be derived
Figure 1: Shiksha (2024) Five V’s of Big Data.
Enhanced by technologies such as AI, IoT, and cloud computing, Big Data enables organisations to extract insights faster and more accurately than ever before.
Types of Big Data
Understanding the types of data involved is key to unlocking its value:
| Big Data Type | Description |
|---|---|
| Structured | As the name suggests, structured data that is clear to understand and logical in its format i.e. a spreadsheet |
| Unstructured | Data with no structure. A collection of information with no logical pattern such as social media entries. |
| Semi-structured | A combination of structured and unstructured. Data that is uncategorised but may have some identifiable features. CSV files are an example of semi-structured data. |
| Geospatial | Data associated with a specifically location. Data that includes references such as latitude and longitude. Data used for mapping. |
| Machine/operational logging | Data produced by machines such as system logs of application logs. |
| Open-source | Data which is readily available to everyone including customers and the media. |
By integrating and analysing Big Data businesses can further understand customer behaviour, identify trends, optimise processes, and forecast more efficiently.
How Big Data Supports Procurement
In procurement, Big Data can help to create efficiencies through achieving cost savings, aiding supplier relationship management and promoting informed decision making throughout the supply chain. By evaluating patterns of spend throughout a supply chain, Big Data, can expose where excess money is being spent and show opportunities for supplier rationalisation and options to achieve economies of scale.
Big Data can allow a procurement team to obtain a more in depth knowledge of complete supplier performance which can contribute to uncovering potential risks throughout the supply chain.
Improved forecasting and visibility can be achieved through the use of Big Data. By reviewing historic internal and external data, procurement can gain a deeper knowledge of trends and seasonality helping to generate more accurate order projections. This in turn will enhance supplier relationships by giving them more detailed forecasted requirements. Through these activities the suppliers will be able to secure materials at favourable rates, maybe in larger quantities and as such generate savings throughout the supply chain.
This blog was written by Katie Jarvis-Grove, Procurement Trainer at Oxford College of Procurement and Supply. Explore our CIPS qualifications to gain the tools and knowledge needed to harness Big Data for smarter procurement decisions.