SAP Analytics for Procurement


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How SAP Analytics For Procurement Can Help You reduce expense and proactively manage supplier risk

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  • Embedded analytics include content that are built in to the Suite Enhancement Packs. The content is purpose built to address the needs of day to day insights required by various roles. You can think of it as enabling ‘ a day in the life of’ for these roles which range from Sales to Marketing, Finance to HR. In the coming slides you will see some examples across lines of business.
  • Validation & Enrichment leads to savings. In this example, two separate instances of the same supplier <Smurfit-Stone Container> were normalized. Without validation, the spend for this supplier would have been fractured and leverage would have been lost. Often times, when a supplier is known by different trade and legal names, duplicate entries are created in the supplier master file. Duplicates also arise when different addresses are used such as remit-to vs. the physical address. Validation resolves these issues by matching against alternative names such as legal, trade style and DBA (Doing Business As) and alternative mailing addresses.Enrichment maximizes leverage by identifying parent companies.In this example, we started with five suppliers. With validation we reduced the supply base to four, enrichment further normalized the supply base to only two suppliers <RockTenn Company> and <Verizon Communications>. The data can also be enriched to include financial risk, diversity, government certifications, and more, to improve decision making. 
  • Item classification is often incomplete and misses leverageAccount classification focuses on why something was purchased, not what was purchasedIndustry or Supplier classification is over-simplified, assuming a supplier sells only one thing, alternative leverage goes unnoticed
  • Multivariate classification leads to savings.Supplier classification is simple, but overlooks alternative leverage. Suppliers often sell more than one thing. This oversimplification causes alternative leverage, such as freight & shipping, to remain unseen and unleveraged. In this example, packaging is overstated – we are missing freight and the associated graphics design services to create the displays. Furthermore, classifying by supplier industry can miss the finer details such as packaging vs. displays.Item classification is often incomplete. Item descriptions tend to cover direct spend and may not be populated for indirect services or expenses. In this example, the indirect services such as telecom and graphics design are not assigned and result in missed opportunities.Another approach is to classify by account. But General Ledger account structures tend to be shallow. They usually track "why" something was purchased instead of "what" was purchased. In this example, <Accounts Payable trade> is too vague a description to classify what was purchased, <Promotions> tells us "why“ we purchased graphic design services but not the fact that we actually bought graphic design services. Lastly, cell phones are obscured because they are considered to be a general office supply – once again stating why not what.SAP’s multivariate approach to classification yields greater accuracy and granularity. Here, we have full visibility to spend because multiple variables are taken into consideration. If we simply rely on item, we would miss leverage because not all transactions have item descriptions. If we rely on account we risk classifying WHY something was purchased – not what was purchased. And if we based our classification on the supplier we would oversimplify the spend, missing alternative leverage. This example shows the interaction of just a few variables... imagine the impact of adding other variables including: Buying Location, Organization, Cost Center, Source System, Line of Business, WBS Element, Department, and so on.
  • Colgate Palmolive Co. 15.6B global consumer products company Founded in 1806 35,000 Colgate people worldwide Products sold in 200+ countries and territories The Company focuses on strong global brands in its corebusinesses Oral Care Personal Care Pet Nutrition Home Care
  • Colgate Palmolive project scopeDataSpend (Account Payables)Purchase OrdersTravel & EntertainmentExternal Factors (CommodityPrices)Three years of dataGeographyGlobal ImplementationSeven SAP ERP’s / One SAP SRMProcurement OrganizationDirectIndirectLogistics
  • Johnson & Johnson Company BackgroundHeadquartered in New Brunswick, NJGlobal Leader inHealth CareSpecializing in Pharmaceuticals, Medical Devices & Diagnostics and Consumer ProductsMore than 250Operating CompaniesIn 60 CountriesSelling Products in More Than 175 Countries114,000 Employees Worldwide
  • J&J Consumer - Implementation ScopeLocationsLatin AmericaEurope, Middle East, AfricaAsia PacificNorth AmericaSource DataTransaction DataContracts, Purchase Orders, InvoicesVolumes consistent with a large Consumer Products company.Key Master Data Material, Buyers, Buying Orgs, Categories, Suppliers, Plants, Geography, Management Organization (plus many more attributes)Source system data is not standardizedMaster data values not standardizedTransaction data configurations varySpend Scope:Direct Material Spend (Raw Materials & Finished Goods)TechnicalInstallation of SPM V2 on our existing J&J SAP BW 7 SP 18 system.Integration with 12 source systems File transfers to/from external cleansing 3rd party.Source System TechnologyBPCS SAP 46C with SPM V2 extractorsSAP 46C SPM V1 extractorsSAP 47CSAP ECC5SAP ECC6Global & Regional End Users: 100+
  • SAP BusinessObjects BI Platform Universe support allows Spend data to be accessed with BI solutions for advanced graphical analyses.View Spend data on mobile devices using SAP BusinessObjects Explorer iPad client for advanced analytics anywhere at any timeExtra SAP BusinessObjects BI Platform and Explorer licensing required
  • SAP Analytics for Procurement

    1. 1. SAP ANALYTICSHow Analytics for procurement can help you reduce expense andproactively manage supplier risk
    2. 2. Executive SummaryYour procurement and supply chain businesses are perhaps hounding you for continuous supplier andspend intelligence – reports that will help drive supplier selection decisions, track performance ofsuppliers and manage spend to be within budget. However, your supplier data requires de-duplication,normalization and enrichment – enrichment with various sources of information such as credit and risk,debarred businesses, minority owned, and corporate ownership information to help during criticalsupplier discussions and negotiations. IT no longer needs to drown from these requests and spendweeks or even months responding to this request. With SAP‟s solutions, and partnerships with 3rdparty data providers, you can empower your procurement, finance and supply chain business users.© 2011 SAP AG. All rights reserved. 2
    3. 3. Learning PointsFind the answers to these questions: What is Procurement Analytics? How can Procurement Analytic Applications help the Procurement Analysts Know, Decide and Act With Confidence? What are the Best-Practices?© 2011 SAP AG. All rights reserved. 3 3
    4. 4. Learn about…Analytic Applications for ProcurementThe problems and solutions Data Enrichment and Classification Spend Performance ManagementCustomer Best PracticesWhat‟s Next© 2011 SAP AG. All rights reserved. 4
    5. 5. SAP Analytics ANALYTIC APPLICATIONS FOR PROCUREMENT© 2011 SAP AG. All rights reserved. 5
    6. 6. Global Trends Increasing Costs & Reaction to Risk Limited Spend Visibility  75% of CFOs under pressure to increase savings and  34% of enterprises still do not have an automated means to decrease risk (Aberdeen Group, 2010) collect and aggregate spend data from various sources (G/L, AP, ERP, etc.) to achieve timely, accurate and complete  Less than 40% of finance professionals are currently information (Aberdeen Group, 2010) enriching their spend data with risk information, making savings erosion an even more critical problem (Aberdeen  Inadequate or ‘too late’ spend insights Group, 2010) Shifting CPO Focus Growing Need for Reliable Data  70% of CPOs expressed a need to focus on Competitive  56% of ISM members rate data reliability as the number one Insight, Risk, Compliance, and Supplier Management vs. challenge in strategic sourcing (Institute of Supply Management, Transaction Management (CPO Research) 2009)  86% of purchasing and finance professionals rate Spend  62% of all enterprises are still using manual means to Analysis as a high value function (Aberdeen Group, 2010) classify and cleanse spend data (Aberdeen Group, 2010)  Procurement is taking on a strategic role to deliver value  US Department of Defense reports that 40% of excess costs and bottom line savings were the result of unreliable data  Customers want an integrated, repeatable process to ensure reliable analyses© 2011 SAP AG. All rights reserved. 6
    7. 7. Analytics for Everyone, Everywhere, AnytimeOPERATIONS l HR l FINANCE I IT I SALES l MARKETING MANUFACTURING l RETAIL l HEALTHCARE l BANKING l UTILITIES l TELCO I PUBLIC SECTOR What What is What will happened? happening now? happen? How and why What is the risk if it How do you prevent / ensure did it happen? does/doesn’t happen? it happens again? Tom Davenport International Institute for Analytics© 2011 SAP AG. All rights reserved. 7
    8. 8. Know, Decide and Act With Confidence Embedded Applications Purpose-built Applications Seamlessly integrates with Contextually answers Aggregates Enterprise Data Business Processes process driven To Optimize Strategic Applications to deliver questions Business Functions actionable insight© 2011 SAP AG. All rights reserved. 8
    9. 9. Analytics for Procurement Analytic Applications Analytics for Procurement Decision Support for Supplier Data Supplier Spend the Procurement Perfor- Reliability Risk Analytics Function mance© 2011 SAP AG. All rights reserved. 9
    10. 10. SAP Procurement PortfolioIntegrated Solutions that Support the Process Spend Sourcing Contract Operational Invoice Analytics Management Procurement Management In Ramp Up! Supplier Management SAP Supplier Lifecycle Mgmt SAP Spend SAP Sourcing / SAP SAP SAP SRM, SAP ERP SAP Invoice Mgmt Performance Sourcing Contract Lifecycle & SAP Cart Approval by OpenText Management OnDemand MgmtSAP Data Enrichment & Supplier Connectivity via SUS and Classification Crossgate / Hubwoo* New!© 2011 SAP AG. All rights reserved. 10
    11. 11. Transforming the Way Procurement Users Gain Insight Self Service Change Problem Manage Manageme Visually analyze the Reporting ment nt spend breakdown for a specific item Self Service Data Reliability See what portion of item spend comes from freight charges versus material costs external Data Integration© 2011 SAP AG. All rights reserved. 11
    12. 12. Data Reliability DATA ENRICHMENT AND CLASSIFICATION ONDEMAND© 2011 SAP AG. All rights reserved. 12 © SAP
    13. 13. Data Enrichment and Classification OnDemandSolution OverviewA cloud-based, network application that combines spend data with global contentand services to improve data reliability for strategic sourcing and spend analytics. Data Collection Enrichment Classification Revision How can I aggregate all My supplier identities are How do I know what I’m How can I add my own my spend data in one obscured due to poor really buying? knowledge into the place and be sure it’s data quality and lack of process? accurate? content!  Manage accuracy and  Increase leverage opportunities  Increase visibility to both direct  Incorporate subject matter completeness of company-wide with normalized suppliers and indirect spend expertise with the Revision tool spend data from multiple sources  Apply changes to the current  Improve decision-making with  Improve understanding of spend  Gather data from SAP and non- enriched content activity with a consistent structure cycle and future cycles for SAP sources for goods and services continuous improvement© 2011 SAP AG. All rights reserved. 13
    14. 14. What Do Data Collection Do? Definition • The purpose of Data Collection is to ensure a complete and accurate aggregation of spend data from multiple sources on a periodic basis. • During the Data Collection phase, master and transaction files are received from multiple sources and reviewed for accuracy, technical validity and content integrity. Sources are then approved for further processing or rejected. Challenge SAP Benefit  Lack of standard process for collecting data from disperse  Standard ETL tool to support external data collection systems  Integration into SAP Spend Performance Management to  Lack of integration into external data sources collect raw information  Monitor progress towards meeting timelinesResult: Organizations are unable to collect their data in a Result: Organizations can increase accuracy, timeliness andtimely and automated fashion. automation decreasing risk of bad data and TCO© 2011 SAP AG. All rights reserved. 14
    15. 15. What Do Supplier Data Standardization and Enrichment Do? Definition • Supplier standardization validates suppliers and removes duplicates. It creates linkages between supplier corporate parents and their children • Supplier enrichment enhances supplier data with information about a supplier‟s diversity status (e.g. Minority-owned, Women-owned, Veteran-owned), or credit/financial risk, etc. Challenge SAP Benefit  Lack of standard process for entering supplier names into  Standard view of all suppliers for goods and services transaction systems  Leverage total purchases to drive cost savings and  Lack of supplier parent/child relationships among suppliers rationalize suppliers  Lack of supplier specific business and risk data  Monitor progress towards meeting Diversity Supplier initiatives  Identify suppliers who may be a risk to the supply chain due to financial instability Result: Organizations are unable to analyze their spend by Result: Organizations can increase leverage opportunities by supplier, and cannot leverage total spend normalizing business entities and improve decision-making with enriched content© 2011 SAP AG. All rights reserved. 15
    16. 16. The SAP Global Business Compendium Additional Location Location (Address, Linkage (Parent Information (Mail, Fax etc) ZIP, Country etc) Company etc) Contact Info (CEO, Officers, Phone Financial & Risk numbers, email Indicators (Filings, addresses etc) suits, liens, Diversity (women bankruptcy etc) owned, SDB, minorities etc) Line-of-Business (Standard Industrial Cortera Risk (via Classification Code incl. Endorsed Business function) Business Info Solution: risk (employees, sales, segment, payment TIN, non-US Tax Sanctions (OFAC) score, trend etc)© 2011 SAP AG. All rights reserved. number etc) 16
    17. 17. Validation and EnrichmentImproves leverage and decision-making Supplier Validated Legal Ownership Industry Spend Grafix GraphCorr LLC (Grafix) RockTenn Company Packaging $75,000 Parc Industrial, St. Marie QC 433 2nd Ave, Sainte-Marie QC G6E 3C6 CA Smurfit Smurfit-Stone Container Corp RockTenn Company Packaging $150,000 PO Box 93095, Chicago, 60673 150 N Michigan Ave, Chicago, IL 60673 US Stone Container Smurfit-Stone Container Corp RockTenn Company Packaging $200,000 150 N Michigan, IL 60673 150 N Michigan Ave, Chicago, IL 60673 US Verizon Verizon Business Verizon Communications Telecom $250,000 295 Maple Ave, Basking Ridge NJ 1 Verizon Way, Basking Ridge NJ 07920 US Verizon WRLS#12RK Cellco Partnership (Verizon Wireless) Verizon Communications Telecom $50,000 NJ 7920 USA 1 Verizon Way, Basking Ridge NJ 07920 US Traditional SAP Grafix $75,000 Verizon Comm. Verizon WRLS $300,000 $50,000 Verizon $250,000 Employees: 194,400 RockTenn Sales (mil): $106,565 Smurfit $425,000 $150,000 Risk, etc. Employees: 10,400 Sales (mil): $3,000 Stone Container Risk, etc. $200,000 Accelerate Savings© 2011 SAP AG. All rights reserved. 17
    18. 18. What Is Spend Data Classification? Definition • Spend Data Classification is the process of assigning procurement spend purchases to a standard structure such as UNSPSC, the SAP taxonomy, or a custom structure Challenge SAP Benefit • Procurement, Supply Chain and Financial transaction • Standard Standard view of all goods and services systems may not have a standard classification purchased across the enterprise structure across the enterprise for assigning goods • Leverage total spend to drive cost savings, monitor and services to a category compliance, and rationalize suppliers • Users may incorrectly classify data at the point of entry in the transaction system Result: Since purchases are not classified to a Result: Organizations can now increase visibility to both single, standard enterprise-wide structure, procurement direct and indirect spend with a consistent category organizations cannot analyze their total category spend scheme. across the enterprise© 2011 SAP AG. All rights reserved. 18
    19. 19. The SAP Transaction Knowledge BaseIndustry Wide Coverage $350+ billion in spend 20,000+ lines of businesses 20+ key variables 50+ industries 20+ years of history© 2011 SAP AG. All rights reserved. 19
    20. 20. Methods of Spend ClassificationItem Description ‘Cataloging‟ Industry ‘Vendor Coding’ (SIC, NAICS, UNSPSC)  Not all items have valid descriptions  Not organized for sourcing – resource based  Assumes repetitive similarity in description  Too generalized for in-depth sourcing  Forces micro vs. strategic focus  Assumes a supplier sells one thingAccounting SAP Method  Limited depth  Focuses on what was purchased by analyzing  Frequently misapplied due to budgets multiple variables on the transaction  Indicates why not what was purchased  Improves leverage with a more complete and accurate understanding of spend  Supports strategic sourcing© 2011 SAP AG. All rights reserved. 20
    21. 21. Spend ClassificationImproves accuracy and understanding Supplier Industry Item Account Business Unit Spend Grafix Packaging Not assigned Promotions Graphics $130,000 RockTenn Packaging Displays Accounts payable trade Advertising $475,000 RockTenn Packaging Displays Freight-inbound Advertising $38,000 Verizon Telecom Not assigned Utilities Facilities $285,000 Verizon Telecom Blackberry Office supplies Sales $72,000 Traditional SAP Supplier Packaging Telecom Approach $643,000 $357,000 Freight $38,000 Item Cell Phones Displays Unknown Multi- Displays Telecom PTP Graphic Design Approach $72,000 $513,000 $415,000 variate $475,000 $285,000 $130,000 Approach Cell Phones Advertising $72,000 $130,000 Account Unknown Office Sup. Utilities $285,000 Approach $475,000 $72,000 Freight $38,000 Accelerate Savings© 2011 SAP AG. All rights reserved. 21
    22. 22. What Is Spend Data Revision? Definition • Revision is the process of reviewing the enrichment, validation and classification processes from a data steward perspective to add expertise to the process for continuous improvement Challenge SAP Benefit • Automated processes cannot always guarantee the • Standard process for the data stewards support individual customer data situation is handled correctly reliability efforts • Due to individual factors there still might be not • Easy to use user interfaces to enable the customer to classified data sets that need to be matched / act as the data steward analyzed • System gets “smarter” each run by enhanced logic Result: Automated rules of all degrees of sophistication Result: Organizations can now increase the value of the cannot handle specifics of individual customer cases and automation by complementing the rules engine with unique might not deliver the desired results. Customers need to be customer data knowledge. able to easily review the data and modify the results of the processed rules© 2011 SAP AG. All rights reserved. 22
    23. 23. How does Revision help? Process support vs. Excel spreadsheets 1  During the revision phase, classifications can be changed or refined as needed  The revision tool itself can be used to review and apply changes on-the-spot  Out of box reports are also available to 2 facilitate review  Example 1. During classification review, the data steward notices that some transactions having account “freight provision” should be in the freight category 2. Using the revision tool, the data steward x filters on “freight provision” and selects the transactions to reclassify x 3. Updated results are applied for x continuous improvement 3© 2011 SAP AG. All rights reserved. 23
    24. 24. What’s in it for You? Lay the foundation for full spend visibility in the SAP Improve leverage and BusinesObjects Spend decision making with a Performance Management normalized and enriched application by optimizing the supply base collection and verification of data Drive continuous Understand purchasing improvement by adding activity with transactions that business expertise to are classified to a consistent enrichment and classification standard for goods and processes services© 2011 SAP AG. All rights reserved. 24
    25. 25. Spend Analytics SPEND PERFORMANCE MANAGEMENT© 2011 SAP AG. All rights reserved. 25 © SAP
    26. 26. Solution Summary: SAP BusinessObjects Spend PerformanceManagement Maximize Savings – Minimize Supplier RiskGain full spend visibility  Automated data capture from SAP and non-SAP  Data accuracy for faster insightsIncrease spend under management  Set up performance targets  Collaborate effectively to act on insights Data Enrichment & ClassificationRapidly identify savings opportunities  Find and act on savings potential ERP  Pro-actively monitor contract compliance GL BIReduce supplier risk P-Cards T&E  Pin-point supplier risks and supply concentration * Note: The Data Enrichment & Classification is a separately priced solution.  Find and act on qualified alternate suppliers© 2011 SAP AG. All rights reserved. 26
    27. 27. Integrated Data Management enables Accurate Spend Visibility The Solution Why SAP SAP Integration  Connectors to pull Spend, Financial, Operational Procurement and Master data from SAP data sources Best-In-Class ETL  Included best-in-class ETL tool simplifies connectivity to non-SAP structured and unstructured data sources Leading EIM technologies  Includes best-in-class methodology and technology for  Automated data capture from SAP and non-SAP accurate, reliable data quality, supports data enables Continuous Spend Analysis for Incremental validation, normalization and enrichment having Savings Insights processed over 1.5 trillion records  Data accuracy for faster insights External Data Feeds – Supplier Normalization & Enrichment*  Includes support for external data feeds providing – Spend Classification* immediate market insights. * Provided as optional subscription service© 2011 SAP AG. All rights reserved. 27
    28. 28. Out Of The Box Analytics enables Actionable Insights The Solution Why SAP Comprehensive Analysis:  Spend, Supply Base, Contract, Supplier Risk and Procurement KPIs, including tracking to key KPIs, budgets and financial performance metrics Surface Savings and Supplier Risk Insights:  Quantify impact with detailed drill down analysis to effect confident decisions, instead of time consuming data mining Automated Comprehensive spend and supply base data model Integration with SAP Sourcing:  Launch sourcing RFx, Auction or Project from insights Provides insights into savings and supplier risk directly, via out of the box integration Dynamic Briefing Book: Powerful ad-hoc analytics for the power user  Supports snapshots in time, with refresh and offline Enables collaboration and decision capture capabilities to support stakeholder collaboration and decision capture© 2011 SAP AG. All rights reserved. 28
    29. 29. Actionable Metrics on Critical Success Factors Improves SpendPerformance The Solution Why SAP Performance Management:  Evolve from Reporting and Analysis to Performance Management, incorporate „Management by Exception‟ to focus valuable Procurement resources to top initiatives Configure KPIs:  Set KPIs to meet your competitive advantage goals, and align procurement goals with corporate Align procurement strategy to execution strategy and vision Gain full visibility into procurement “actuals” Know The Contributors to Lagging KPIs:  Track key KPIs with full knowledge of key contributors to Better manage key procurement performance variance, and root cause for sub-standard performance for indicators immediate decision and action Identify root causes of sub-standard performance© 2011 SAP AG. All rights reserved. 29
    30. 30. Insights Into Savings Potential Helps Prioritize Sourcing Strategies The Solution Why SAP Spend Advisor:  Be alerted to savings potential, instead of time and effort mining for savings opportunities From Insights to Detailed Analysis:  Supports Power Users need to perform deep dive and ad-hoc analysis on the savings insights, including analyzing supplier risk profiles, supply concentration and sole sourced supplier risks Identify savings potential From Insight to Action: Analyze Quantity, Price And Supplier details  Take immediate action on insights by transferring line Determine strategic sourcing opportunity item data into SAP Sourcing for continued next steps in the strategic sourcing process Launch sourcing action from insights© 2011 SAP AG. All rights reserved. 30
    31. 31. Result: Predictable Spend Performance And Confident SourcingDecisions Today: Sustainable Solution: Distributed Information Sources Integrated, Insight Driven, Actionable Supplier Supplier Performance Ratings Information Aggregation Spend Supplier Evaluation / Analysis Audits Supplier Portal  Multiple systems capturing silo‟ed  One solution supplier information  Monitor entire supply base  No data integration, random supply  Act quickly on impact driven priorities base reviews© 2011 SAP AG. All rights reserved. 31
    32. 32. Spend And Supplier Risk Analytics enables a stable Supply Base The Solution Why SAP Internal Supplier Data:  Incorporate internal supplier performance indicators to 1. Identify 2. Appraise Root Cause Analysis analyze risk trends for early risk detection Impact Analysis External And Market Data:  Combine external and market data on suppliers to ensure supplier viability 3. Act Devise Mitigation Strategy Know your at risk suppliers Assess Impact of Supplier Failure:  Quantify impact on your business, spend volume and Identify supplier concentration and sole sourced risk locations to help prioritize and establish alternate factors suppliers Assess impact to your spend Find and act on qualified alternate supplier sources© 2011 SAP AG. All rights reserved. 32
    33. 33. Critical Supplier Information Enables Proactive Insights Into ImpactOf Supplier Risk  Spend volume with suppliers at risk  Analyze category and item exposure to risk  Quantify spend volume and buying locations at risk© 2011 SAP AG. All rights reserved. 33
    34. 34. Critical Supplier Information Enables Proactive Insights Into ImpactOf Supplier Risk  Jump directly from SPM to Cortera website for up to date Supplier report© 2011 SAP AG. All rights reserved. 34
    35. 35. Cortera Risk Data in DEC Appended during DEC processing Attributes available within SPM for dashboards and supplier views include  Risk Segment  Payment Score Risk  Payment Rating Trend  Reported Payment Relationships  Percent Past Due  Days Beyond Terms (DBT)  Industry DBT Benchmark  Risk Flags  Bankruptcy Count  Operations News Count  Liens Count Pull detailed Cortera Supplier Report on demand© 2011 SAP AG. All rights reserved. 35
    36. 36. Quick DemoSpend Performance Management Look & Feel Ad-Hoc Reporting Classified & Enriched vs. Raw Data Pre-defined Intelligence© 2011 SAP AG. All rights reserved. 36
    37. 37. Procurement Analytics CUSTOMER BEST PRACTICES© 2011 SAP AG. All rights reserved. 37 © SAP
    38. 38. Global Personal Products Company ChallengesCustom BW Reporting application developed in Areas of Opportunity2004 Increase utilization Based on Accounts Payable information only  Easy of Use Rule based logic for spend classification  Self Service CapabilitiesImplemented SRM/EBP solution for indirect  Better classification of spendprocurement between 2007 and 2010 Provide context informationClassification of Indirect Spend has being a  Commodity priceschallenge  Contract and Purchase Order data Users not always classify spend properly (EBP)  T&E Rule engine data maintenance is resource consuming (BW) Better analytical capabilitiesIT spending to many resources maintaining and  From Corporate summary to document level informationenhancing existing application  Tool to empower users to find and report on the data they needProcurement dependency on a few “Power Users” togenerate information for the organization© 2011 SAP AG. All rights reserved. 38
    39. 39. Global Personal Products Company ResultsBest Practices Key LearningsData is the key component SPM solution well designed to address spend Have a good understanding of the complexity of your analytics business needs Transactional & Master Data User adoption requires good data quality and Data validation is key and it can take a lot of effort and time modern/intuitive user interface Define Spend Hierarchies that facilitate sourcing initiatives  Spend is classified properlyInvolve your basis/technical group early in the  Vendors are classified properly per the role they haveimplementation To keep up with external innovation you need to pick Make sure that the Java stack is properly configured/tuned for the expected workload in production. a solution from a vendor that reinvest in enhancing Ensure a process is in place to deploy Adobe Flash. existing toolsDefine an appropriate data refresh frequency© 2011 SAP AG. All rights reserved. 39
    40. 40. Global Consumer Packaged Goods Company Challenges – competing on Analytics© 2011 SAP AG. All rights reserved. 40
    41. 41. Global Consumer Packaged Goods Company ResultsBusiness Case Leverage Opportunities A Global Business Intelligence (BI) solution that will provide end-to-end procurement Spend Analytics that supports our Global RFx and Category Management strategy. Improved visibility to item level detail segmented by commodity from each region leading to greater procurement savings. An enabler to achieve our already committed world-class savings targets. We concluded that it would be mandatory to have tools such as Spend Analytics to support this already committed savings goal. Incrementally, we assumed a conservative 0.1% savings on total direct spend. Further savings from cycle time reduction – Additional sourcing events can be held each year – More time available for strategy and supplier bid analysis© 2011 SAP AG. All rights reserved. 41
    42. 42. SAP BusinessObjects BI Platform - Universe IntegrationAdvanced Graphical Analyses and iPad Integration SAP BusinessObjects SAP Spend Performance BusinessObjects Management BI Platform SAP Flex UI BusinessObjects SAP SAP Explorer BusinessObjects BusinessObjects Analysis Web Intelligence SAP NetWeaver BW iPad Client (SAP BusinessObjects Explorer ) SDN Article on SPM/BO Universe Integration SDN Blog on SPM Mobile Scenarios© 2011 SAP AG. All rights reserved. 42
    43. 43. Spend Analysis on iPad, Explorer View© 2011 SAP AG. All rights reserved. 43
    44. 44. Recommendation: Visit these sessions !!!Case study: How Kimberly-Clark implemented Case study: An inside look at the result ofa global spend analytics platform and gained Health Nets extensive two-year procurementcontrol of spend data in less than 20 weeks transformation© 2011 SAP AG. All rights reserved. 44
    45. 45. Procurement Analytics WHAT’S NEXT© 2011 SAP AG. All rights reserved. 45
    46. 46. Key Learning - Transforming the Way Business Users Gain Insights Actionable insights like never before  Modern, compelling, and seamless user experience  Context-relevant and actionable  In-depth and complete Best-practice Analytics content  Preconfigured reports and dashboards  Out-of-the-box end-to-end best practices Deep and unique integration  Leverage investments in the SAP Business Suite  Leverage latest technology innovations and established best practices  Enable easy extension and customization© 2011 SAP AG. All rights reserved. 46
    47. 47. Return on Investment SAP is the leader in Enterprise Software since nearly 40 years Your company has probably invested in SAP Systems You are running Procurement on SAP solutions or are planning to do so You require the newest Analytics solutions to help the Procurement Function achieve enterprise goals SAP has already done the job: Analytics for Procurement Leverage your investments and better run your company© 2011 SAP AG. All rights reserved. 47 47
    48. 48. Resources SAP Analytics Online  Register for Virtual Event:  Visit our web page: to discover the latest Analytic Applications innovations from SAP  Visit SAP Analytics Blog: to share your views on daily blog posts  Become a Fan on Facebook:  Follow on Twitter: SAP Community Network (SDN)  SAP Analytics page:  Best practices:  Architecture:© 2011 SAP AG. All rights reserved. 48
    49. 49. SAP Operational Performance Management Elite TrainingApr 16 – 20 in Prague, Czech RepublicBE THE FIRST TO HAVE LIVE SPM 3.0, SCPM 2.0 and DEC 1.0 EXPERIENCEThis Elite enablement workshop will cover a large variety of topics including: New Features for What-If-Analyses and Advanced Analytics in SAP BusinessObjects Spend Performance Management 3.0 (SPM) First time ever experience and deep dive into SAP BusinessObjects Data Enrichment and Classification OnDemand (DEC) Understand SPM and DEC integration options as well as a vertical integration scenario New Features for What-If-Analyses and Risk Management Integration in SAP BusinessObjects Supply Chain Performance Managemement 2.0 Deep dive technical sessions and performance tuning for all three solutions (UI and Backend) Performance Tuning (BW 7.3, OPM solutions, Java and ABAP extensions) OPM and SAP HANA session REGISTER!/search?q=%23OP ndex.epx?kNtBzmUK9zU ?blog=/pub/wlg/28164 MElite© 2011 SAP AG. All rights reserved. 49
    50. 50. Thank You!Contact information:Henner Schliebs Nikhil ReddyAnalytics Solution Marketing Procurement
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