Siemens Chooses Procurement as the First Step in Their Analytics Transformation
Data is running through the core of everything we do in business today.
As more and more digital technology gets added to business processes and customer/client experiences, the resulting volumes of data go through the roof. Rather than let this mountain of information just sit there, savvy companies are putting it to work for them. They can use it to gain a deeper insight into the inner workings of the company and the industry at large, craft new ways of streamlining processes, and deliver better services to their audiences.
It is with this in mind that Siemens decided to develop a new data analytics strategy. The innovation began, as it so often does, with the procurement arm of the business.
Siemens
It was the Chief Procurement Officer for Siemens Building Technologies, Carl Oberland, who first decided the company needed an analytics strategy to stay competitive in the modern arena. Obviously, the initial focus was on procurement, but the plan is to roll the strategy out across all departments and all arms of the Siemens business - from Building Technologies to the Healthineers.
"People initially have many different interpretations of what is meant by analytics," said Oberland. "The white paper we developed with Dr. Handfield helped to establish the mission and vision, defining what we mean by the digital platform? What is digital governance and stewardship? We established definitions for things like Business Intelligence, defined as analytics that will tell us what is happening, whereas Business Analytics was about what will happen in the future (predictive)."
Oberland took inspiration from the film Moneyball in which a new coach uses advanced data analytics to create the perfect baseball team. One of the story's most integral characters is a data analyst. He is the one who creates the algorithms and processes which allow raw data to be turned into actionable insights in the form of knowing which players to hire and fire, and which positions to play them in.
Data Analytics
If you'll forgive the slightly labored metaphor, Moneyball is the perfect illustration of the way data analytics can be used to boost businesses in all industries - including procurement. In procurement, data can be used to make sure your business is sourcing the best products for the best price possible, and equally sure that you have the best people in the positions they need to be in. Whether in sports or business, a team is essentially built on the same principles, and data can be used in much the same way to get the best out of the supply chain.
However, the introduction of a new strategy such as this does not come without a few challenges. When data is driving the strategy, assigned roles can become more blurred and people can be left unclear as to what their position and responsibilities are under the new paradigm.
"We then had to explain to different divisions that had taken offense to these definitions in our white paper and had to resolve conflicts that had arisen due to misinterpretation of these definitions," added Oberland. "For instance, the guys on the R&D side were saying that 'we are the technical experts because we are doing analytics on the buildings.' We had to explain that business analytics were about running the business, not R&D. We created a visualization platform to focus on internal operational, and customer-facing metrics, which is not part of R&D's scope of work - so we're not on your turf."
Final Thoughts
When implementing any new strategy, it's important to make sure everyone is clear about what's expected of them during the transformation, and that all new definitions are clearly established and communicated to avoid different departments butting heads.
However, get all your ducks in a row and procurement (as well as the rest of the business) can begin seeing the benefits of a strong analytics strategy.
"I assigned a person who could work on access databases and began by combining procurement data for five divisions into a single database," said Oberland. "The rest of the organization was using 'old tools', but when they saw what I was able to do with a single integrated data lake for procurement, and they saw what I had, other functions and divisions said - 'I want this!' - and they asked me to do it for the whole company."
You can hear Siemens Healthineers' Senior Vice President for Regions Procurement, Stewart Clarke speak at ProcureCon Direct 2019, taking place in July at the Rancho Bernardo Inn, San Diego, CA.
Download the agenda today for more information and insights.