eim220-eim220 – improved visibility through spend analysis

EIM220 – Improved Visibility

Through Spend Analysis SAP Spend Performance Management

Copyright © 2011 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

1. Understand how SAP Spend Performance Management can help high performing

companies to effectively source, negotiate with suppliers, and ensure compliance by

improving visibility into their spend information.

2. See how Accenture has added immense value to the procurement process of one of its

top customers by helping them cleanse the procurement data without using any third party

data enrichment services

3. Discover how Accenture has addressed direct procurement related gaps in the

standard product by developing custom reports and strong analytics

4. Get a quick preview of Accenture’s strong credential in this product arena, in house

developed accelerators and assets that drastically reduce the implementation timeline

5. Short Demo 2

In This Session…

Copyright © 2011 Accenture All Rights Reserved.

3

Agenda


1. Industry Challenges

2. SPM – A walkthrough

3. Case Study

4. SPM Offering at Accenture

5. Short Demo

6. Q & A

7. Summary

4

Typical Situation in

Procurement Company growth (e.g. through mergers & acquisitions)

– Many ERP systems

– Divisional Procurement units

Transparency of decision-critical information often missing

– “Low hanging fruits” already realized – looking for new savings opportunities

– Difficult to manage Procurement performance (e.g. compliance issues)

How can you unlock and sustain the next wave of savings?

Time

TC

O

Sav

ing

s

Typical Benefits

Desired Benefit Stream


5

Complete visibility of

Procurement Process

Spend per

supplier

hierarchy?

Spend per

category?

% of on-time

deliveries?

Number of

suppliers?

It can be quite difficult to answer the following questions, accurately, in a timely

manner, across all sites/divisions.

“Standard” topics

“Advanced” topics

Spend per BU /

country?

Contract

compliance?

Top ten

suppliers?

Supplier

compliance

with SLAs ?

Procurement

savings & cost

avoidance?

% spend /

suppliers managed?


6

Top Priorities of every CPO

Reduce Spend

Increase Cost

Savings

Manage Supplier

Risk

Create a complete spend picture for the organization

Systematically identify procurement savings opportunities

Determine supplier risks in advance, insulating the business from supplier disruptions

Increase spend under management

Reduce maverick spending and contract leakage


High Performers use

automated solutions

Source : Accenture research and insights into

procurement performance mastery, 2007

82%

79%

46%

65%

76%

71%

8%

3%

5%

5%

1%

5%

Technology support

sourcing

Common and automed R2P

platform

Self-service e-Invoicing

Supplier integration

technology

Procurement master data

harmonization

Reporting excellence

Master Low performer

Best practice in technology (Percentage of responses)

The value of user friendly ad hoc reporting capabilities is

seen by over 70% of the masters who deployed

technology allowing timely reports driven transparency

into the organization.

Source: Aberdeen Group, Dec 2009

Best-In-Class enterprises have their reliance on spend

analysis automation and reflect the notion that these top-

performing enterprises have leveraged technology to

achieve desirable performance and drive value to the

greater enterprise

7 Copyright © 2011 Accenture All Rights Reserved.

Poor spending analysis

capabilities…

Source: Aberdeen, Spending Analysis Benchmark Report, 2003

Only 51% of enterprises have a formal spending analysis program

Formal spend

program

Those with formal programs only cover half of company-wide spend, on average

51%

49%

1% 2%

16%

81%

Slight/No Value Neutral Moderate Value High Value

81% of the companies place high value on spend analysis function

Source: Aberdeen Group, Dec 2009 Only 8% companies have automated the Spend Analysis process

Source: Aberdeen Group, Dec 2009


9

Agenda




3. Case Study


5. Short Demo

6. Q & A

7. Summary

Do you know what is SPM?

10

• Aggregate data from SAP and non-SAP sources

• Standardize and enrich enterprise-wide spend data

• Conduct in-depth analyses

• Highlight non-compliance

• Manage supplier risk

Solution Highlights

• Analytical application built on top of standard SAP BW

• Flexible drag and drop interface for ad-hoc reporting

• Prepackaged with 130+ out of the box reports

• Current release is SPM 2.1 and SPM3.0 is in ramp-up

Spend Performance Management


Spend Analysis Life Cycle

11

Step 3: Data Cleansing (Optional)

• Supplier Normalization

• Spend Classification

Step 2:

Extract Data

Step 3:

Enrich

Step 4:

Analyze

Vendor

Knowledge

Base

Item

Knowledge

Base

Fe

ed

ba

ck

Step 1:

Identify

Travel Data

Corporate

Purchasing

Card

Freight

Suppliers,

Telecom &

Others

Other

GL

Data Oracle

eProcurement

Step 2: Data Extraction

• Define data extraction templates

• Extract Data

• Aggregate & structure data

Steps 4: Reporting & Analysis

• Publish data to Spend Analysis

• Reports and Dashboards

• Identify saving opportunities

Step 1: Opportunity Identification

• Identify data sources

• Define enrichment strategy


SPM can help you to…

• Over 130 out of the box KPIs and Analytics

• Find and act on savings potential via E-Sourcing integration

• Proactively monitor contract compliance

• Set up performance targets on critical success factors

• Collaborate effectively to act on insights

• Highlight single supplier dependencies

• Establish supply risk mitigation priorities

• Contextually understand spend volume at risk

• Automate data capture from disparate systems

• Data accuracy for faster insights

• Ad-hoc Reporting and dash-boarding

Gain Spend Visibility

Reduce Supplier

Risk

Identify Savings

Opportunities

Increase Spend Under

Management

Spend Performance Management


13

Agenda




3. Case Study


5. Short Demo

6. Q & A

7. Summary

A world leader in premium

audio

14

Challenges and Opportunities

Accenture Approach

• Integrated view of the procurement and supply chain

activities and the associated interactions with suppliers

• Standardized processes and policies across regions

and business units

• Improved availability of information (not just data)

when needed for effective decision making and to

drive savings

• Visibility into spend and savings (forecast and actual), performance, and contracts

• Non-standard processes and disparate systems across regions and business units

• Manual and paper-intensive processes with limited controls

• Limited ability to identify savings, reduce costs and mitigate risks

• Reliable cost estimates for customer quotations

• Develop a global integrated scalable system which

would enable them to standardize processes and

policies, improve operational efficiency, identify

further savings and improve availability of information

for effective decision making

• Gain visibility into spend by implementing Spend

Performance solution

Results & Benefits


Standard SPM Solution –

Fit/Gap Analysis

• Invoice (Spend) reports

• How much was my historical spend (by material/supplier/plant)?

• Drill down/up feature

Solution selected for the following reasons

• Direct Procurement

• Classification

• Payment Terms

• Purchase Order (Committed Spend) reports don’t work well

Gaps identified in the Standard SPM Solution


How to solve spend data

challenges?

16

Global Supplier

Supplier master data from each

business division is mapped to the

global supplier data. The mapping

is done by Accenture process team

along with client’s business team.

Create a global supplier data with

parent child linkages for Supplier

Enrichment.

• Standard Supplier Names

• Addresses

• Locations

• Parent-Child Linkages

Division #1

Division #2

Division #3

ERP Supplier Normalized Supplier

Supplier 1

PO Box 55, Portsmouth

Hants PO6

Purchase $150,000

Supplier 1

P O Box 55, Portsmouth

Hampshire PO6 3AU

Purchase $600,000

SUPP 1


Hampshire PO6 3AU

Purchase $250,000

SUPPL 1


Hampshire PO6 3AU

Purchase $200,000

Similar approach is followed to address Spend Classification.


17

• Sales/Operational forecast data is extracted from future demands

• The future demand consists of the data from POs, PR’s schedule lines

• Upload target and negotiated price on regular basis

• Compute savings based on target versus negotiated comparison

Division #1

Division #2

Division #3

SPM

Division #1

Division #2

Division #3

Sales

Forecast &

Price Yearly

Operational

Forecast

Monthly

Address Direct

Procurement gaps…


18

Agenda




3. Case Study


5. Short Demo

6. Q & A

7. Summary

Spend Management Offering

at Accenture

19

• State of the art SAP SPM 2.1 demo environment

• Offering with accelerators in the form of How to Guides, Templates, Manuals, etc

• Strong relationship with the SAP SPM product development team at SAP Labs

SAP SPM 2.1 demo

landscape with connect

systems:

• SAP SPM 2.1 Demo

• SAP E-Sourcing 5.1

• SAP BW 7.0

Key Accelerators

Master Data Collection Guide

Transactional Data Collection Guide

Configuration Guide

User Training Manual

Sample Cutover Plan

Scoping Questionnaire

Business Blueprint

Data Validation Guide

Functional Design Template

Technical Design Template


20

Agenda




3. Case Study


5. Short Demo

6. Q & A

7. Summary

Out of the box Dashboards

21

• Snapshot of key performance indicators specific to user role

• Out of the box role based dashboards

• Ability to personalize and create custom dashboards


Online/Offline Briefing Book

• A briefing book is a collection of

snapshots of reports, dashboards, or

both.

• Capture the information displayed in

reports and dashboards in briefing

books to conserve a view of the

data.

• View reports offline through briefing

book viewer.


Performance Monitoring

23

• Keep track of the most important KPIs

• Quickly identify the top 5 contributors

• Set goals for each of the KPIs and drive the business to work toward the goal


Actionable Integration with

E-Sourcing

• Identify the savings opportunity

• Initiate the sourcing event to

reduce cost

• Create E-Sourcing Project,

RFx, Auction

24


Supplier Risk Analysis (Optional)

25

• Snapshot of supplier risk analysis

• Out of the box supplier risk reports

• Identify high risk suppliers using risk attributes


26

Agenda




3. Case Study


5. Short Demo

6. Q & A

7. Summary


Q & A

28

Agenda




3. Case Study


5. Short Demo

6. Q & A

7. Summary

1. SAP Spend Performance Management helps high performing

companies to effectively source, negotiate with suppliers, and ensure

compliance by improving visibility into their spend information.

2. Accenture’s in-depth procurement knowledge helps customers to

cleanse their procurement data without using any third party data

enrichment services

3. Accenture’s process knowledge coupled with strong SAP BI capability

helps customers to address direct procurement related gaps in the

standard product by developing custom reports and strong analytics

29

Summary


30

Thank you


For more information on Accenture’s SAP

capability, please visit:

http://www.accenture.com/in-en/technology/systems-integration/sap-

solutions/Pages/index.aspx

http://www.accenture.com/in-en/technology/systems-integration/sap-solutions/Pages/index.aspx







31

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eim220-eim220 – improved visibility through spend analysis

Technology

procurement data

accenture research

trademarks of accenture

data sources

analysis sap

high performance

data extraction templates

supplier compliance