Enterprise Performance Management,Business Intelligence,Master Data Management,Spend Intelligence

Successful Procurement? It's A Numbers Game - Good blogpost by Dave Hannon

2012-01-29T01:05:00.000-08:00

A very good article by Dave Hannon - Successful Procurement? It's A Numbers Game . I fully agree with Dave on this one.

Thanks
Prashant

How Are You Elevating Procurement's Role in Your Enterprise?

2012-01-29T01:03:00.000-08:00

Exceprts and link to a good procurement article by Chris Salis, SAP's Global Vice President of Procurement Solutions -

The procurement organization has never been afraid of technology. It rode the dot-com wave like many other departments, rolling out e-procurement and reverse auction functionality, while launching public and private marketplaces by the dozens. It used technology to automate routine tasks with the goal of taking the next step and focusing on more strategic areas like supplier risk management and detailed spend analysis.

But for many procurement organizations, that next step didn’t come. They got bogged down in resource constraints or budget cuts and never deployed the technology required to truly transform procurement. Now is the time for procurement to take that step. In the current market, many companies are focused on bottom-line savings and top-line growth, and the latest wave of procurement technology can help drive both.

To learn how new innovations are changing the role procurement plays within the enterprise, SAPinsider recently spoke with SAP’s Chris Salis, Global Vice President of Procurement Solutions, and Emily Rakowski, Senior Director and Head of Procurement Solutions Marketing.

You can see the complete article at http://www.insiderlearningnetwork.com/go/publication/article//How+Are+You+Elevating+Procurement%27s+Role+in+Your+Enterprise%3F?&pub_id=12&article_id=6294%20

Thanks
Prashant Mendki

Whats Next in SAP Roadmap 2012

2012-01-28T09:50:00.000-08:00

If you are SAP Service partner and looking forward for new business avenues with growth trajectory in 2012 - here are some convincing pointers coming out from SAP from their financial results outlook and all the buzz around just concluded SAP FKOM in New Orleans and Milan.

Lets look at the highlights of 2011 financial results and outlook provided -
(http://www.bloomberg.com/news/2012-01-25/sap-forecasts-higher-profit-sales-this-year-on-analytics-mobile-software.html)

1. Record Software Revenue
2. Exceeding Revenue Guidance
3. Exceeding Operating Profit Guidance
4. Strong Margin Growth
5. Exceeding Company Expectations for SAP HANA and Mobile

In general - SAP will ride heavily on 5 things in next 2 years to reach to that critical goal of 320 Million euros from HANA only and 2015 goal of 20 Billion euro company.

HANA
Cloud
Mobility
Sustainability
Analytics

If you are already in atleast one of these - lot of opportunities to grow - if you are not - still time to change your startegy to align with it and move.

Lets look at each one of these in coming days

Please send me any feedback on pmendki(at)gmail(dot)com

Thanks
Prashant Mendki

SAP Enterprise Performance Management - EPM

2012-01-28T09:18:00.000-08:00

In today's competitive business environment (as if it was less competitive at some point ), the most important thing is analytics. Analytics because it gives some kind of actionable intelligence. This intelligence when implemented correctly through multiple actions inside organizational business units provides a predictibility - which directly business bottomlines.

SAP is having this complete solution suite - Enterprise Performance Management - which includes different solutions for different problems. The end goal for each of these is same - to gain some predictability and enhance performance of the function and then collectively enhance performance of the organization as a whole.

Lets look at these different solutions -

Strategy management – Set your goals, map your strategies, and then manage performance from high-level objectives to operational metrics.
Planning and consolidation – Increase the accuracy and effectiveness of planning, budgeting, forecasting and financial reporting processes.
Financial consolidation – Complete your financial consolidation and reporting cycles faster – with complete confidence in your data.
Disclosure management – Ensure a timely, accurate, and risk-free close process by managing the production, filing, and publication of financial and regulatory statements and reports.
Notes management – Streamline the collection and management of financial notes to help improve your financial statements and reports.
Financial information management – Leverage powerful connectivity, mapping, and loading functionality designed for business users.
Intercompany reconciliation – Accelerate your close by enabling business units to reconcile intercompany balances and transactions directly with one another.
Profitability and cost management – Identify the causes of underperformance, and take action to reduce costs and optimize profitability.
Spend performance management – Maximize cost savings and reduce supplier risk by gaining continuous visibility into company-wide spending patterns.
Supply chain performance management – Measurably improve supply chain effectiveness by focusing on actionable, operational process metrics.
Sales and operations planning – Develop synchronized demand and supply plans that are feasible and aligned with your company's financial goals.

Lets look at each of these solutions and understand more in coming days

let me know your feedback at pmendki(at)gmail(dot)com

Thanks
Prashant Mendki

SAP DEC - Data Enrichment and Classification

2011-10-16T11:36:00.000-07:00

So there is a new animal in the zoo. Is it really really different ? probably yes - probably not. But yes - world seems to be curious to know - if its different then whats that difference is?

SAP recently launched its long awaiting "new" product in Spend Analytics named as "SAP BusinessObjects Data Enrichment and Classification" (SAP BOBJ DEC). You can read official SAP page here and also download the product related information in this SAP DEC PDF.

Is it a game changer ? Yes. Since SAP took over Analytics Inc in 2008 and Business Objects in the same year - they announced a product roadmap integrating the technology platform with the engine that Analytics got on board. 3 years of big effort and we got this good new product.

So whats the real difference that SAP partners like Bristlecone can offer now ?
1. A faster engine - Which means less execution time for a engagement - traslated into quick spend visbility
2. Large vendor repository - a real good more than 100 million large vendor compendium that SAP setup with its partnership with various data providers like D&B. This means greater accuracy in terms of supplier normalization
3. A better interface - Interface is built using its consistent corporate style objects based on Java engine and Adobe Flex. So it gives one product shape to entire landscape.

Are we done with all spend products now ? No. The verdit is not yet out really. This is still first step of this product - and it really needs to be seen how customer accept it and how it really works for customers.

If you have any questions related to this product - please send me a mail pmendki (at) gmail (dot) com and I will surely get more information

Lets widen our Horizon from Analysis to Intelliegence

2011-06-12T09:57:00.000-07:00

Guys - You will see few changes to the concept, design and content of this blog in coming weeks. All these years, we focused more on the data management related to Spend Analysis. All studies in recent term, shows customer is more interested to convert this analysis in some kind of intelligence. Basically, to use this analysis to an actionable inputs, which saves money, lowers cost and increase revenue so at the end maximize shareholder value. So the focus going ahead is more on that Business Intelliegence - and how to collaborate more with Business to realize value for organization. Looks interesting ? Keep following. :-)

Thanks
Prashant Mendki

Lessons in Spend Analysis Engagement Expectation Management

2011-03-05T02:16:00.000-08:00

Yesterday we all read about a news that Brightpoint sued Emptoris - a leading Spend Analysis Service provider based at MA over failed to deliver the service as expected - Brightpoint suing software vendor for negligence

There are multiple posts and opinions started pouring the web about why this would happen and what Emptoris should do to respond. Competitors may start using this as a point to win some of the deal and so on. But I think there is a larger message in all this - and that’s about how you sell your product / service, how you setup customer expectation and how your delivery mechanism has been setup - business sensitized or mere a product delivery and lastly whether you stress on value or volume.

In today's Spend world, what are the components that one needs to ideally talk about while engaging with customer for Spend Analytics requirements?

1. A strong analytical BI tool - which allows you to maximum slice dice capabilities

2. A strong backbone data service - which provides you good cleanse, classified data which boost your ability to see holistic trends and identify savings

3. A process consulting to guide customer on how they really need to look at the data to get maximum value.

When you look at the market - First part of BI tool takes center stage, as sales person understand and provide visualization to end customer well by "Showing" something. The second part of Data service - which is more critical takes a back seat, as one can rarely show something without executing a free of cost POC - which makes sales process very long. Also Data Service is usually over committed in sales cycle without looking at customer data. Now if customer's data is really bad in legacy systems - who the hell in the world can provide 99% accuracy for that - a sales person can. And least we talk about the third part. As I mentioned in my last post of "What is the go live point for Spend Project" - Once the product is implemented (installed, running reports) - everybody claps about a "successful" go live - but does anybody care about the educating and guiding user community on what the value they get out of the product? How they should be looking at data - and most importantly how they should not be.

The second important point is - expectation management. Spend analysis is a collaborative efforts between customer and vendor. By imposing a usual "Project" tags on it - everybody tries to "manage" milestones. By its nature spend analytics are engagement driven efforts, to keep fine-tuning the data, keep enhancing process to sensitize it for specific business or organization, enhancing visibility through product features and as a end goal - getting a maximum value - identifying potential savings out of it. These are all "Analytical" processes and "business intelligence" tools - which does not get you any savings automatically but just make sure you have right advice, full picture where you can go. Now it’s still business user’s ability to use that tool which actually saves money in longer term. So the question is - are they really engaged in cycle well, are they well educated by vendor on expectations, are they advised enough on what not to expect from the process? Are we telling them if there data is not good enough - it’s not going to be "cool" to start with - but as fine tuning happens - there are opportunities to make it "cool".

The last point is delivery mechanism. In my opinion it should not be a mere "data factory" kind of setup. I fully understand that the data service thing cannot be fully automated in any case - so one does require a manual intervention to look and add human intelligence to make decisions about the data. But that should be a repository based - engine based auto learning process. Also the product implementation should not be a delivery goal. BI product should be seen as a medium to achieve that savings goal.

Any thoughts or comments - let me know - pmendki (at) gmail (dot) com

Thanks
Prashant Mendki

What is a Go Live Point for a Spend Analysis Project?

2011-02-27T08:48:00.000-08:00

Now I know thats a stupid question for any project manager. As you have a activity list, tasks, milestones, resources in your Microsoft Project, and once that complets in time, with all required resources, in budget - thats a successful project and there is a last step in your plan - GO LIVE. As a PMI certified Project Management Professional myself I agree with you all.

Thats what happened in one of my recent engagement when team reached to that GO LIVE step. Everybody from bottom to top said - Yes we went live - Bravo - congratulations to the team and kudos and lots of good emails. You certainly love when it happens - but should you when its a Spend Analysis project? a BIG NO NO in my opinion. Why ? Because Spend analysis engagement is not a conventional project. A part of it when you successfully implement and analytical - business intelligence product - is a milestone. Is that a go live point? again answer is NO.

If we really look at the objective if implemeting any such tool is to get the consolidated visibility across different source systems within the organization, give more teeth and accuracy to your procurement related analysis, make your sourcing decisions focused and streamlined, identify savings and achieve that in a defined timeframe. Now implementing the analytical portal is a very basis baby step in all this cycle.

So what's next logical milestone but quick one to celebrate? Analyzing and identifying low hanging fruits. How one can do that? lets look at the next post - I promise one by thursday this week.

I am Back - So is the more analysis

2011-02-27T08:34:00.000-08:00

Hello -

Feeling good to restart my blogging, as I missed lot many discussion topics that happened in last 6 months. I took a break. One strong reason was - I was working on my Harvard Manage Mentor course. Yes - and I did that successfully. These were 21 extensive management courses that one needs to complete before you earn that. And despite having all hectic activities, my customer visit travels - I did that. This gives me immense strength now in terms of my professional attitude, working behavior, how I look at peers, How I look at stress and everything around. Earlier I used to take all the work on my head without even thinking whether I am supposed to do it, or I am getting recognized for it - now I am more cautious. So change is there. Thanks to Harvard and Mahindra Group for providing me this opportunity to look inside.

Now about analysis - Yes there are lot of happenings in the Enterprise Perfromance Management world - and I have lot to write on that one. There are acquisitions and mergers, new ideas floating around, new products taking shape. So we will start taking look at some of that starting today. So stay tuned again.

Spend Analysis is getting Personal

2010-07-12T02:49:00.000-07:00

"This is too much, I have to cut down my expenses on Clothes, Shoes, and Watches" - shouted my colleague suddenly in office, looking at his laptop screen. What happened? Everybody started staring at him - as he is known for flamboyance, in which apparels surely plays a part. The screen he was looking at was his bank website displaying his credit card "spend analyzer" tab. The graph showed that the total amount he spend in last one year on his credit card - 50% of it went to apparel and that's the reason of all this noise.

So "Spend Analysis" reached home finally and its hitting everybody's eyes (or wallets). Till recently only billion - million dollars companies are privy of using buzzwords like spend analysis, identify potential savings and catch low hanging fruits etc. As world is through deep down recession, the world sees need to save those pennies for another dooms day. But where do you find all that money? So the spend analysis of your expense is catching up. Banks are providing these tools to customer as a value addition - where one can check - see those numbers - scream for a minute - and next time pull a credit card think twice. Now that’s the saving everybody wants.

I am happy for my friend.

Thanks
Prashant Mendki

Mahindra Satyam needs to be distinctive - Says HFS

2010-06-13T21:59:00.000-07:00

Horses for Sources - a IT industry analyst focussed on oursourcing published a very good article today after Mahindra Satyam's analyst call. Good assessment on how the things are after the Satyam takeover of Mahindras and what needs to be done - the main point being Mahindra Saryam needs to be distinctive.

http://www.horsesforsources.com/event-alert-mahindra-satyam-130610

Thanks
Prashant Mendki pmendki(at)gmail(dot)com

Spend Analysis - its not only about identifying Savings

2010-06-13T10:09:00.000-07:00

For last two months I was talking to some customers and prospective customers to study on "how" part of Spend Analytics system. This How is mainly about - How do you use spend analytics system - simple. My impression untill recently that everybody must be looking at reports like - Vendor wise spend, Commodity wise spend, Category wide spend etc etc, then identify what are important objects in terms of money - get the strategy defined to do negotiations and then actually saving money in longer term using negotiated pricing. Now after my brief 2 months study - this looks to be a small part of the world to me. Sometimes this is "Not" the part of results through spend analytics system.

Then what do industry do with it? Interestingly sometime people just needs a consolidated analytical system. Means, they have desperate systems all over the world, and data in those is not in good shape. So what they want is some system to consolidate, standardize the data, cleanse it and provide analytical system which gives them reporting through single instance. May be NO to potential savings, No to Negotiations and NO to price variance at large.

Now thats not a bad idea in my view. Many consulting companies tries to sell "Spend Analytics" solution by making big statements to customers about savings and all. But any salesman asked if customer needs that or just a "single truth of analytical data" reporting system is enough?

What do you think?

Prashant Mendki pmendki(at)gmail(dot)com

Spend Analysis & Supplier Risk - Article by Naresh Hingorani

2010-04-08T23:25:00.000-07:00

A good read in recent issue of Risk Management Magazine - an Article on Spend Analysis and Supplier Risk titled "Domino Effect".

http://www.rmmagazine.com/MGTemplate.cfm?Section=RMMagazine&NavMenuID=128&template=/Magazine/DisplayMagazines.cfm&IssueID=344&AID=4072&Volume=57&ShowArticle=1

Thanks
prashant Mendki (pmendki at gmail dot com)

Implement Spend Analysis Program – get more savings every year

2010-04-04T03:03:00.000-07:00

Imagine for a second that you are a global enterprise with more than 10 finance systems located at different locations worldwide. Do you know, how many opportunities are you missing in double payments, missed volume discounts, off-contract spend, who are your real suppliers at Tier 2, even if you have preferred suppliers at Tier 1? Do you know your largest spend categories? Do you know which corporate house you are doing most business with and parent of the vendors that you deal with named as A, B & C are actuall same? Which suppliers are diversity suppliers – woman owned or minority owned?

This is the type of information that you can expect to become visible and get some actionable input from it to increase your savings from a spend analysis project. Now ways and means to implement those spend analysis program can be different for everybody depending on system spread, geographic locations, nature of business and business priorities. There are multiple vendors and consultants available globally to give you headstart on its implementation. There are multiple technologies available to provide greater accuracy, visbility and drill down to these information using jazzy dashboards.

Question that always comes from company is – Whether I should be doing this with internal IT? Can I ? the answer is yes and no. Technological capabilities and leveraging those from internal IT is Yes – and you will have much better control on it. But from a subject matter expertise – prioritizing your requirements, having a roadmap defined and getting into a model which makes those savings real should be your aim and that’s where internal IT fails. Because IT is IT and they know software and tools and its implementation in landscape. The real goal is not having a million dollar new software in your landscape, having everybody train on it and then getting very little out of it. The goal is to identify savings opportunities in business scenarios, with your vendors, in your commodities and your sourcing programs. A consultant may be able to do that in simple excel sheets with $10000 investment and save your million (may be). That’s the goal.

The ROI on spend analysis project is much higher – upto 1% of your total spend I will say – so if your yearly spend is $1 billion, after implementing a spend analysis project your 1% saving in spend means $ 10 Million. And that’s too year by year – every year not one time. If you go ahead and further optimize your program – with the help of specialized consultants (and again – tools comes later) – the savings can increase.

Let me know your feedback. You can always contact me by posting a reply here or sending me an email - pmendki@gmail.com
Thanks
Prashant Mendki

Thinking about Spend Analysis ? Read book by Kirit Pandit and H Marmanis

2010-04-04T01:07:00.000-07:00

If you are a player in the Supply Chain industry - a manager, a business analyst, a leader in manufacturing, a strategic sourcing consultant or a spend analyst, a business intelligence technician or a supply chain guy - if you haven't read the book by Kirit Pandit and H Marmanis titled "Spend Analysis - The Winodow to Startegic Sourcing"- you are missing something.

This book details everything that you need to know on Spend Analysis. It details out right from simple definitions to the steps on implementing Spend Management program, how different classification taxonomies work, what all reports one needs to look for, how to identify opportunities and what are different components of Spend analysis that makes it "real" on technology side. So it helps you to understand whether you need spend analysis - what it means, if you say yes - what all things you may want to look for to decide your own goal and then once you know goals how to make those real - in simple language it takes you through all steps.

In a market that is crowded with providers running over each other to prove differetiators like quick turnaround from data to dashboard, agressive pricing and fully automated solutions - this books make you realize that spend analysis is a "process" and to make it work as a "fully automated tool" is not that realistic. Yes technological algorithms can turn business process into software and that has benefit in terms of time and accuracy, but each business is different from other, each person and thought process behind is different - so end of the day making it all "predictable" and "analytical" in stereotype solution may not work. To make that "process" realization - go ahead and read this book - I will suggest.

Let me know your feedback on - pmendki at gmail dot com or post comments here.

Thanks
Prashant Mendki

SAP Spend Performance Management - Article by Jason Buch

2010-04-01T03:56:00.000-07:00

A good Article by industry analyst - Jason Buch on SAP Spend management solution -

SAP Spend Performance Management: Supply Risk Meets Spend Analysis

Posted At : March 30, 2010 11:10 AM
Posted By : Editor

Related Categories: Jason Busch, Spend Management

For years, SAP and Oracle largely punted on the spend analysis area, providing a large opportunity for other vendors to gain a foothold inside companies in a critical Spend Management area. In the past two quarters, however, both SAP and Oracle have gotten serious about releasing entirely new spend analysis tools that acknowledge the need for looking beyond just ERP systems data and dumping raw information into a data warehouse. SAP in particular has moved past solving basic multi-system and source spend data challenges, which they now accomplish through a combination of SAP extractors for ECC and SRM as well as a data integration ETL capability for non-SAP systems, not to mention support for integrating third-party data feeds. Now, SAP enables a full range of standard spend analysis capabilities (e.g., classification, standard reporting, etc.). In addition, they also offer differentiated capabilities that incorporate a range of supply risk elements into the spend analysis equation at the line item level (i.e., enabling companies to understand risk factors for specific parts, components, services, etc.)

With SAP Spend Performance Management, users can rapidly drill into supply risk at the category, supplier and item level, all from a single launch screen. What's most unique about this approach is that SAP is leveraging a combination of third-party enrichment data as well as a given company's own information to provide a more accurate and complete view of different risk factors in the supply chain -- all in the context of what they're actually buying versus only who they are doing business with on an aggregate level. These combinations of being able to look at line item spend details and either roll-up or roll-down a combination of financial, operational, performance, legal and other risk factors is unique. Granted, it's not perfect. SAP's performance management and scorecarding capability included in Spend Performance Management leaves quite a bit to be desired relative to best of breed providers in the this area, like BravoSolution and Emptoris. Still, the overall innovation coming from this package is more than impressive, especially given that SAP is behind it.

If you're curious to learn more about SAP Performance Management and other supply risk, supplier information management and spend visibility approaches and providers in the market, you can download the two latest Spend Matters Compass Research briefs by clicking the links below:

http://www.spendmatters.com/library/research_detail.cfm?asset_id=10

http://www.spendmatters.com/library/research_detail.cfm?asset_id=11

Spend Analysis - What to choose product or solution ?

2010-03-20T11:45:00.000-07:00

More and more I study the vendors and their spend analysis solutions, methodologies in this big big market place of procurement spend, strategic sourcing and related areas, I wonder if there is more gap between "product" and "solutions". Everybody is trying to jump and say "here is more automated solution", "if you can do it in 10 hrs - here I am with 6 hrs", "If you get it for 100 $, here I am with 80$" and likewise on all other comparable factors. Yes, the market is competitive and customers are well educated - so marketing yourself well, providing fastest turnaround and proposing competitive pricing is required and much needed in crowded market. But thats for the short term I guess. In longer term - more and more customer education is required to make them aware of Solution rather than a product. Now, whats the difference?

Is anybody working with customers in identifying their organizational spend analysis goals - short term, mid term and long term ? Short term could be - 6 to 8 months, mid term is 20 to 24 months and long term is around 40-48 months. In a haste to provide "my" solution, is anybody working with customer to create roadmap? Is there a extensive assessment going on before somebody says - and if for this situation there is this roadmap - which will have you results after 10 months only. Or people just saying - whatever is your situation, my solution accomodates "all" you needs - just give me business.

What would be the ideal "Solution" for customer -
1. No one size fit all solution
2. No "product" proposal - but a roadmap proposal for identifying and recognizing savings
3. A roadmap to understand- if commodity is important, if grography, a business organization or specific system that needs attention

I think customer also needs to know - just throwing few thousand dollars, looking at fancy "automated" solutions and getting spend classified in minutes is not the end goal. Does these provides real savings end of the "term" (not day). Is vendor consultants capable of understanding "your" business, can they convert the numbers into savings - or they bunch of people sitting and saying your "air ticket" to be classified as "travel" and not "you have opportunity to leverage on hotel deal than air travel".

Thanks
Prashant Mendki
pmendki (at) gmail (dot) com

You want to always remember 2009

2010-01-03T23:34:00.000-08:00

In his first ever article in 2010 on his blog spendmatters, titled Wish you Happy New Year 2009 , Jason Buch started it with a question - "Wouldn't you like to forget 2009? " As an industry observer and analyst I will say NO.

Not lot many of you agree with me I know, as it was an upside down for many of us. But lets think - in which decade there was no such situation in one or the other front somewhere ? So this is a phenomenon continues. Whether that affects individual life or not - that person will see it as a good or bad. Now being in the big economy was bound to affect sometime - which it did. Just like a tsunami devastated many, a year prior to that.

Now lets look at what happened good in 2009 - the first and foremost - overall manufacturing, support, logistics, supply chain and IT and hundreds of ancillary sector went through a matuarity curve. The things that were irrelevant or not so critical in the chain started vanishing. Everything now is being attached with the "Value" of it not just the "Cost" of it. So the growth going forward will more to do with Value - and if you are in you are valuable. Ans I think this will carry everybody along the growth pattern.

Globalization of economy - everybody saw that what it means to be in a "global village". So if one household is affected the other is bound to affect. So nobody can just care about own thing, but also needs to be cautious about "last man in the queue". Also big powers realized that they are not so powerful as they assumed. There are slow and steady tortoise trying to win. So the heir will have to take care not to sleep. As long as its not sleeping heir doesnt have to care about somebody else winning the race.

Lessons for outsourcing nations - It was a big lesson for oursourcing destinations in the booming economies specifially in asia. They realized that just looking at somebody for business growth, working for some developed country in the night sitting at asia location for few dollars doesnt mean outsourcing. There has to be business process behind it. There is no quick "seat switching" behind offshoring- it has to go with process offshoring. Also India realized that growth needs to be within, its own infrastructure and customer base is more business opportunity than few dollars coming in.

I guess there are more pros than cons like this. So end of the day, one always will say - "I remember in 2009 we did this like ............and so on"

What do you think ?

Prashant Mendki (pmendki@gmail.com)

Wish you all Very Very Happy New year

2010-01-03T08:28:00.000-08:00

Hello, Wish you all and your Family Very Very Happy New Year 2010. May all your dreams come true and life filled with Happiness this year.

I am sure this year is going to be a wonderfully hectic on work front. Now sometimes yes hectic is not so wonderful, but most of the times I enjoy it. We all know that the analytics industry is all buzzing and getting matured after long learning curve. Till 2 years back, supply chain analytics or spend analysis was game of more nische players whereas big guns looking at it as "something that we dont have to do", "its not our thing" attitude. Big ERP players was more into application integrated with their systems and data management activities was always service delivery thing with speciality companies doing good like - Ariba, Zycus, Emptoris, Bravo to name few. Now 2008 and 2009 saw sudden changes in that landscape. As economy was fragile and people started looking at optimization as the solution, everybody including big ERP players got convinced that there is a money in "spend" and started taking it seriously. So SAP taking over business objects, acquiring analytics and actively marketing different enterprise performance management solutions, Oracle launching new spend classification solution, IBM acquiring exeros data profiler and consolidating the infosphere and MDM products suite and so on are all related to that phenomenon.

So whats going to be next? Already industry saw enough consolidation in last 2 years in the analytics and data management solutions space - so I dont think there are going to any major take over in coming times other than few minor tools and applications integrations with existing tool set like data profiling tools, adapters to integrate with multiple systems, automated classification tooset integrated with dashboards etc.

I will continue on this next week..........

Prashant Mendki (pmendki@gmail.com)

Zycus report - Path-to-procurement-excellence

2009-12-13T09:05:00.000-08:00

This week I came across an interesting report from a leading player in startegic sourcing and spend analysis - Zycus titled "Zycus path-to-procurement-excellence A CPO’s complete reference guide to sustainable performance improvement through strategic sourcing and procurement management ". A long name but a crisp document to guide you on practices and processes around strategic sourcing. An impressive work done by purchasing magazine and Zycus. It not only talks about the step by step process - a multi year one - to reach to startegic savings goal but also puts up process maturity maps to measure different factors at each step. I will recommend every consultant to surely read and learn from this.

This is what happens when blogger goes missing

2009-10-31T08:46:00.000-07:00

And I opologies for it.

Yes I took off for few days from blogging. I had lot of topics to discuss about, had a list of things to put opinion about, as data management industry and specifically spend classification industry is buzzing - new products, new methods, new people and customer is looking at spend analysis like never before. But I had to consoldiate my inputs, put a thought process and then thought about posting lot of things. So here I am ... In next few days/weeks I will be posting all those subject posts here .. so watch the space ...

Spend Analysis Applications can help you to manage Supplier Risk and SOX compliance too.

2009-09-13T10:37:00.000-07:00

The current economic scenario (even if it’s started looking little bit good now) demands every CEO, CFO to look for a way to save money from whatever way it comes. Supply Chain, Procurement, Strategic Sourcing are, Supplier Relationship Management are always major focus area for optimization. Spend visibility is one such area in Enterprise Performance Optimization – EPO - which gives a promise to identify potential savings. Now everybody knows there are too many products and players in the industry which claims to provide spend visibility. Sales people always claims to give you moon and pitch products in a way like – “you put the data from this side and see the 10% savings on the dashboard on the other side”. But as we know, in every data sensitive engagement it’s a process behind the product that needs to work on your data before you really gets that dashboard – but that’s not the point for today.
The point is do you know what to look for when you see those jazzy reports and dashboards on a spend visibility application. Is it just about “Spend by category”, “Spend by Suppliers” and some kind of “Price variance” with few columns here are there? Certainly NO. These are few mandatory “reports” that one should expect from spend visibility portal anyway. Then what’s more you can get and you should look for in the same reports?

There are 2 different areas that these applications can help you to optimize.
1. Supplier Risk Analysis – What are the financial risks regarding your “Important” suppliers. They are high on spend and obviously important and some low on spend but critical to business operations. Where are you placed in risk maturity model when it comes to these suppliers? You should certainly look for this information on your

2. SOX compliance – Yes – the most talked about thing in industry – Sarbanes Oxley act. The act aims to create auditable business processes, improve financial transparency, and create strong internal operational controls. It requires that companies prepare and maintain documentation of financial reporting processes, create internal controls, evaluate and correct control deficiencies. This one thing is not that much talked about feature in these solutions. If your consultant gives you a right advice, and able to get the right data from your systems, your spend visibility solution can be extremely helpful in reporting, tracking and compliance of SOX specifically for articles 302, 304, 401, 404 or 802.

There are different types of risks to deal with in Supplier Risk Analysis. Few of them are -

• Strategic risk
• Operations risk
• Supply risk
• Financial risk
• Fiscal risk
• Regulatory risk
• Legal risk

On higher level some of these can be categorized as Strategic, Geo Political and Financial Risks. In this series we will discuss some of these aspects in next 2 weeks and then move to really interesting topic of how spend analysis solution can help you in SOX compliance too

You can write your feedback comments right here, or send me an email to pmendki@gmail.com . Thanks for visiting.

Prashant Mendki

Increase revenue by checking and fixing data quality issues

2009-09-06T09:21:00.000-07:00

These days everybody talks about cost cutting, increasing revenue, how the depression, recession affecting company margins and how the job losses are imminent and so on and so forth. All this is true and real and no doubt everybody is looking at new avenues to struggle with the numbers. Though there is no magic recipe to alter the scenario overnight, lot of people, lot of companies are failing to see optimization chances within the organization and chance of increasing revenue – data in their own systems. What data – everything – right from suppliers, customers, materials. What to look for – Data Quality.

The surveys done by few companies in the area estimated that the by managing the data quality one can increase revenue by 66%. Now let’s take that as marketing gimmick on the face, but then assume its half of that – still there is a chance of revenue increase of 33% - do you want to believe that? I do.

My experience with large global enterprises in the data area points me to believe in that. There are these multiple locations, multiple plants, and multiple systems having too many suppliers, too many material getting procured – direct or indirect. All this creates big quality issues in the data – same supplier calling by different names, IBM, I B M, I.B.M, …….favorite example of quality industry, not having linkages among suppliers in system. So this issue prevents to get visibility of suppliers – subsidiaries and vendors relationship. If you have that visibility there are greater chances of negotiations with parent suppliers and thereby affecting the bottom line. End of the day this is one supplier but as your data is too scattered its difficult for you to get visibility. E.g. You are happy to have contract with doubletree hotel, another with embassy suites and likewise but if you have linkages in your system correctly maintained, you will know that they are all “Blackstone group” and if you have negotiated contract with Blackstone then probably your saving is much much more.

That’s just one example of supplier data. Same applies to materials. A simple example is matching attribute values for materials. As the data doesn’t contain attribute values at the detailed down the hierarchy level – you cannot compare same or similar materials using your systems. If you have that probably you can use material available in plant A rather than procuring it right away. So data quality saves you there.

Classification –spend or material – both are another data quality related areas – which we will discuss briefly about in next article.

Thanks
Prashant Mendki
pmendki@gmail.com

Who in Supplier diversity program - An interesting Aspect

2009-08-29T07:40:00.000-07:00

Last week after I posted third part of my Supplier diversity series of - What Why and How, I got an question from my esteemed senior colleague Ashok Pai, Who works in Supply chain industry worldwide for decades and a Client Partner with Bristlecone, asking "When are you writing about WHO aspect of this?" I replied saying I never thought of that angle, as my basic assumption was that supplier onboarding process is part of strategic sourcing and procurement department chain so those are the people who will be implementing it. And then he mentioned to me that "Look at it from supplier onboarding angle, which is a major pain area for US industry". As I started thinking and researching from that angle, I realized that as a part of diversity implementation its easy to say that run the diversity program in industry, capture supplier attendtion, get the diverse suppliers registered and start doing business with them - its hard to implement. Its really hard to get a new supplier onboard.

This week, I was planning to write something on Supplier Risk associated with the diversity and how that should be assesed as well as mitigated. But I think that needs to wait as I see Supplier Onboarding gets precedence once we talk about How to implement diversity program. I will post that shortly.

How to implement the supplier diversity program? Key Parameters of Decision Matrix -

2009-08-23T23:25:00.000-07:00

In last two articles we discussed two questions about supplier diversity. Basic one like WHAT is Supplier Diversity and its types , Second most important one for business decision WHY? What are key business drivers to implement supplier diversity?

Now the third important question is HOW? What are my key parameters to make this decision on implementing diversity program? What are the steps? How should I determine what are my organizational needs? What is an assessment criterion?
Key steps or parameters for your decision matrix would be –
1. Define scope and set your goal – link it to organizational goal so you have good business case
2. Build the internal database; connect with suppliers, make the data complete.
3. Run a diversity program
4. Audit, Monitor and upgrade

Understanding your requirements and goal setting is first and important steps for implementing supplier diversity. This will not only enable you to asses and quantify the things for assessment and monitoring your program in future, this will also enable you to convey your ideas clearly with the stakeholders and ensure that the commitment is from top.
The goal setting is with 2 major aspects – one is to shortlist commodities that can be or should be bought from diversity suppliers. The other goal can be budgetary to ensure that $XXX in a period – quarterly or yearly – must be spent through diversity suppliers. A hybrid approach on “preferential” supplier list is also an option. In that case one can put the diverse suppliers as a preferred in the list of materials and do away with the budgetary constraints. This way your diversity program is not just a “Something for charity”, but actually a business driver. Also by doing this, if your risk chart signals that a small supplier would not be able to fulfill demand in said time, the order goes to next preferred. This will keep check of quality, innovation, commitment as well as business demands and risks in check.

Once you set the goal, ensure that the organization commitment to the program is there. All commodity managers, supply chain strategists, the procurement people knows and recognized importance of the program. This will make sure that the program gets on track once you set the ground for execution and not just remains on paper as a initiative. You may need to spend more time building collateral documents, presentations with departments, charting out risk path, getting a diversity consultant to answer all possible questions coming out and drawing a road map.

The next task is to check your database – which is a first step towards realization of the program and you will see that it’s not in as good shape as you thought about. Vendor master is always a pain area but also a powerful enough to save lot of (I mean it) money. You just need to be patient to check and make it cleaner, leaner and find negotiating opportunities from it to save. But that’s another topic to talk about. So get it normalized and standardized and may be classified. And then ask your service provider to identify diversity status of each supplier. Also ask each individual supplier to identify own diversity status. You may actually need to help your small suppliers to identify and register their status with the federal or state agencies or certifying agencies or own certification and auditing process. It’s a long and exhaustive process for sure as there has to be auditing and legal compliance with all this.

The next step is to run the diversity program for industry. So you campaign the program for industry players, attend conference, drive point to small suppliers about your program, encourage new vendors to register and identify them, shortlist commodities / supplier relationships, identify strengths, assess risks with individual entities, its impact and then make a tolerable risk impacted program. Go public with your diversity commitment and start building actual relationship with these suppliers.

Auditing and monitoring your program time to time is most important part of the process initially. Once it has its own traction, and becomes policy it will be on auto pilot mode and may need attention whenever there is a change. But setting it up and showing results (revenue, risk and reliability) are a herculean task to do. Right mindset can only drive it.
Be aware – it’s a change and people don’t like change. So expect resistance. Expect people opposing it. Be firm, be reasonable, and make sure you have good consultants always at reach to help you out justifying things – as you cannot wear many hats.
As we know now – WHAT, WHY and HOW, let’s look next week at the risk associated with the supplier diversity and probable mitigation of it.

Please post your comments here or send it to me by email on pmendki@gmail.com

Prashant Mendki, PMP