CSCMP's Supply Chain Quarterly
October 21, 2018
Forward Thinking

Commentary: Creating a baseline for big data in the supply chain

A new survey will look at what return on investment companies are seeing from implementing big data analytics in their supply chains.

The analyst firm Gartner Inc. estimates that companies will spend US$18.3 billion on analytics and big data initiatives in 2017, an increase of 7 percent over 2016. That number is expected to grow to $22.8 billion by 2020 as executives become more cognizant of the importance of gaining sustainable value from big data analytical capabilities.

How much has your company spent (internally and externally) over the last 18 months on analytics and big data initiatives? What are your executive team's expectations for a return on investment? Have you come anywhere near meeting these expectations?

At my company, Competitive Insights, a provider of cost-to-serve and profit-analysis solutions, we hear two very different reponses when talking with companies about their success in mastering growing volumes of supply chain data and gaining sustainable value from business analytics. Publically, companies say they are succeeding, but behind closed doors, many admit to various degrees of frustration and minimal progress.

To understand how far other companies' big data analytical efforts have really come, you need a nonspeculative way to measure your own progress versus that of your peer group. You also need the ability to better understand peer companies' challenges, the benefits they have realized, and their focus for future analytics and big data investments.

To help supply chain professionals access that information, a team comprising CSCMP's Supply Chain Quarterly, Arizona State University, Colorado State University, Competitive Insights LLC, and lharrington group LLC conducted a survey designed to establish this supply chain industry baseline for big data analytics. Participants in this first annual survey represent over 20 industries around the world, and the results are statistically sound.

The outcome of the survey supports the identification of true challenges and benefits that companies have experienced as well as what they expect to gain from future investments in big data analytics. These results serve as a starting point to measure and track each year the progress companies have made in realizing the value from big data analytics in their supply chains. This year's survey results will be presented at the Council of Supply Chain Management Professionals (CSCMP) EDGE Supply Chain Conference and Exhibition. They will also be published in CSCMP's Supply Chain Quarterly and DC Velocity.

One interesting early discovery from the survey results is that some technologies used for big data analytics do offer limited benefits but fall short in providing the true overall business value that can be gained from successful analytical efforts. The survey results will also help you see, for example, where other companies are overcoming challenges and whether they have been able to use big data to solve quality and timing issues. The survey will also indicate whether your peers have been able to gain meaningful analytical answers to prioritized business problems and where they plan to focus their future efforts.

So when the door is shut and you are having internal discussions on your successes and frustrations in deriving value from your big data analytics investments, you now have a way to move from speculation to fact. Naturally, the survey will only get stronger as we learn from you what is beneficial and what is needed to get more insightful information. If you did not participate this year, please take the time to complete next year's survey. It will only take a few minutes, but the impact could be significant.

Richard Sharpe is CEO of Competitive Insights LLC, a provider of cost-to-serve and profit-analysis solutions.

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