Data-driven business integration in the procurement category management of an ICT company
Hirn, Juho Kustaa Erik
Permanent address of the item is
Dataan perustuva liiketoimintaintegraatio ICT-yrityksen hankinnan kategoriajohtamisessa
Procurement’s role has become more strategic due to increasing significance of suppliers and intensified competition. Procurement has also been recognized to have a positive effect on the profitability of a company. Category management is one outcome of this change. Category management divides the supply expenditure of a company into categories and manages them through category strategies formed in collaboration with business units which requires integration. In the former research literature, data utilization in procurement focuses mainly on suppliers, supply expenditure and purchasing performance. There is a lack of research on category management and data-driven integration between procurement and business units. This exploratory thesis focuses on three research questions. First, category management in the context of the case company is defined. The second research question focuses on the data-driven business integration in procurement. In addition, the effect of category management on this integration is studied. Finally, possibilities for improving data-driven business integration in procurement are studied. These three themes can be considered vital for the success of category management in the case company. This thesis is a mixed-method single case study using an abductive approach for analyzing the results. The thesis consists of two empirical parts: interviews and a statistical analysis. The literature review provides background for category management and data-driven business integration. It also supports formulation of the hypotheses for the statistical analysis. Interviews provide an overview on the category management of the case company. The statistical analysis attempts to integrate data from business units and procurement into an analysis to test whether data-driven integration can provide insightful information for managerial decision-making. The aim is also to increase synergy between procurement and business units. As a practical contribution, this thesis provides a framework of category management in the case company context. The findings give support for current research on the procurement’s changing role. The results also provide insight into the data-driven integration in the case company at the moment of the study and possibilities for improving it. In addition, the statistical analysis provides interesting results on the integration of data between procurement and business units. The study shows that data-driven integration between procurement and business units can provide relevant information for the strategic decision-making in both procurement and business unit.