Archive: March, 2015

California dreaming

As the first signs of spring start to appear, longing for the warmth of Los Angeles doesn’t seem so far-fetched. The belief, however, that the abundance of data produced by the Internet of Things will change everything does seem ridiculous.

In a post called California dreaming: computers take over from humans, Gerard Chick of Optimum Procurement Group argues that you need proper scientific methods if you want to make sense of all this data “or put more simply that you can’t start messing with data unless you have a really good idea about what it is you hope to find”.

I’ve recently reviewed a number of spend analytic tools and found that many of the providers who appear to offer real-time data solutions actually employ a team of people to do the data crunching, analysis and production of reports. These providers are manually gathering their client’s data, using a mix of algorithms and manual cleansing techniques to deliver dashboards.

The abundance of data has undoubtedly changed the way many of us do things. Google was only listed in 2004 with the mission statement “to organize the world’s information and make it universally accessible and useful”. It now provides 3.5 billion searches a day. But understanding the relative strength of human judgement versus the accuracy of machines in key. McKinsey said recently: “knowing when to assert your own expertise or step out of the way [and let computers do it] is fast becoming a critical executive skill”.

The challenge for procurement and many other professions is to develop people who are able to use the analytic tools available and grasp the implications of the results. This means that businesses need to invest more in analyst skills so that their employees can apply analytic methods to specific problems using the scientific methods. It is no longer sufficient to be just commercially savvy.