Data-driven business integration in procurement – a case study in an ICT company

Abstract

The strategic status of procurement has strengthened in business organizations during the past 20 years. At the same time, increasing amount of data is available to potentially support purchasing and supply management (PSM). Despite the increasing interest in big data in the academic research and among practitioners, there are less empirical studies on its potential in specific business functions such as PSM. The aim of this study is to investigate the current state and potential opportunities of data usage in integrating procurement activities with business needs. More specifically, the study answers to the following research questions: 1. How does the changing role of procurement function affect its information requirements? 2. What kind of information is currently exchanged between procurement function and other business functions and how the situation could be improved? Qualitative single case study approach is used. The main empirical data set is gathered through 10 interviews in the case company. The global case company of this study operates in the ICT industry. The interviewees are procurement experts, data analysts and representatives of various business lines of the company. It is found that procurement employees see a clear shift in their role towards a strategic business partner in charge of supplier relations and networks. However, the business units still see the role of procurement in more traditional sense relating. The company representatives consider the utilization of data in decision-making as their pitfall. It is apparent that better change and utilization of data between the business and procurement functions could contribute to the value created by the procurement function. The empirical study reveals that the data perceived important by the interviewees still relate to the traditional role of procurement. However, a clear need to combine existing data between business and procurement functions prevails. Further research should investigate the benefits of combining the various data sources linking the business perspective and procurement perspective.