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Spend Analysis: Driving Procurement Excellence with Numbers by Your Side
Presenters: Annie Vaseekaran, Keertan RaiJuly, 2016
2© 2016 Ariba - an SAP company. All rights reserved.
Good Spend Management Begins With Good Spend Visibility
The Spend Management Ecosystem
3© 2016 Ariba - an SAP company. All rights reserved.
86% of companies say spend visibility is very important …
But only 40% of companies have
good visibility into their spending
Source: SAP / Procurement Leaders Survey 2011
4© 2016 Ariba - an SAP company. All rights reserved.
Inconsistent Data Quality
Disparate Data Sources
Manual Effort Intensive Processes
Limited Access to Market Information
Poor Visibility on Suppliers
Why is Gaining Visibility on Your Spending a Challenge ?
5© 2016 Ariba - an SAP company. All rights reserved.
Traditional Spend Visibility is Only the Tip of the Iceberg…
Data Aggregation
Dashboards & Reporting
6© 2016 Ariba - an SAP company. All rights reserved.
Turning Data into Actionable Intelligence Requires More
Supplier Enrichment
Negotiation leverage Financial health & risk ratings Diversity & sustainability
Price & industry indices Online communitiesSupplier network intelligence
Commodity Classification
Increased spend under management Category optimization Contract compliance
Data Aggregation
Dashboards & Reporting
Market Intelligence
Integrated Spend Management
Collaborative sourcing Reduced maverick spending Capture savings leakages
7© 2016 Ariba - an SAP company. All rights reserved.
Ariba® Spend Visibility powered by SAP HANAA Clear View of All Your Spend and Suppliers in One Place
Ariba Spend Visibility unified with D&B Business Insights and powered by HANA provides you the ability to make trusted and confident spending decisions by delivering comprehensive visibility on your spend data.
How much are we spending? What are we buying? Who are we buying from?
Improve sourcing pipeline Increase purchasing clout with suppliers Rationalize supplier & product portfolio Reduce inventory costs Increase spend under management Mitigate supplier risk Diversity and sustainability adherence
Insights Decisions
8© 2016 Ariba - an SAP company. All rights reserved.
Ariba® Spend Visibility powered by SAP HANA Your on-ramp to effective spend management
Data enrichment• Unique partnership with Dun & Bradstreet (D&B) for insights into
the supply base with 245 million records updated monthly in a 5-level hierarchy
• Optional green/diversity/risk scores through D&B• Flexible data schema and custom taxonomy to address industry-
specific needs 3D visibility for true spend intelligence
• Granular commodity classification – United Nations Standard Products and Services Code (UNSPSC), ACT, or custom
• Robust supplier enrichment• Market indicators and benchmarks
Robust analytic tools• Prepackaged, best-practice reports, role-specific dashboards, and
slice-and-dice reports• Shared network supplier profiles completing the 360-degree view
Ariba Spend Visibility Benchmarking Program• Gauge your spend profile and Compare insights on key metrics
against aggregated peer group data
9© 2016 Ariba - an SAP company. All rights reserved.
Realize Benefits Beyond Sourcing
Sourcing Savings Increased spend under management and improved sourcing pipeline
Contract ComplianceImproved adherence to negotiated contracts and reduced off contract spending
Working Capital LeverageTotal visibility on supplier level payment terms and better supplier negotiation leverage
Mitigated Supplier RisksInsights on supplier financials, litigations and other risk indicators
Reduced Cost of ProcurementOptimized supplier base and categories, visibility in to price indices and discount leakages
10© 2016 Ariba - an SAP company. All rights reserved.
Unlocking Insights Across Multiple Fronts
Entertainment & Media
Organization
ROI on three year subscription reached in
single category identified and sourced
97% of the annual spend classified and enriched over 98% of the supplier base thus resulting 20% supplier reduction
USD 27.3 million savings in 2.5 year period and 18% average savings across all spend categories
Over 400,000+ goods and services categorized based on industry taxonomies at 99% accuracy
11© 2016 Ariba - an SAP company. All rights reserved.
Ariba Spend Visibility: Process workflow
Data enrichment processes in
Ariba Spend Visibility
Customer data source systems
Raw data loaded into Ariba Spend
Visibility portal (input)1
Extract, transform, and load process
ERP 1 ERP 2 P- Card
…….
Ariba Spend Visibility portal
powered by SAP HANA
in the cloud
Market data benchmarks
4
6
Enriched data loaded to
portal (output)
Quality assurance
5
Commodity classification
Supplier data enrichment 2 3
12© 2016 Ariba - an SAP company. All rights reserved.
Sustaining end user adoption is the key to ensuring long term benefits
Deployment of a new tool often raises questions:
Where is this information coming from?
What does it tell me?
How do I build the reports I need?
Can I trust the data?
How do I identify sourcing opportunities and areas for improvement?
13© 2016 Ariba - an SAP company. All rights reserved.
And it Takes More than Just Software to Get There
User Adoption Best Practices
Core user / core team
Best Practice Center (BPC) projects
Dashboards, templates
Regular refinement process
ACT vs. Custom Taxonomy
14© 2016 Ariba - an SAP company. All rights reserved.
Thank You
Keertan Rai Director – Solutions Management
SAP India Private Limited Bangalore, India 560103
Tel: +91 98861 28425 [email protected]
Annie VaseekaranManager – Solutions Marketing
SAP India Private Limited Bangalore, India 560103
Tel: +91 9611277511 [email protected]
