Enterprise Performance Management - Data is First Priority

Journey of procurement transformation begins with..….. Part II

2015-02-05T10:21:00.000-08:00

Original Blog post - https://www.linkedin.com/pulse/journey-procurement-transformation-begins-part-ii-prashant-mendki

Procurement transformation journey is complex, cross functional, time consuming and even frustrating at times. The very basic but a strategic step to start this journey is “Spend Analysis”. Again – this has to be done in a right way to get the potential benefits. We talked about that in first part of this article https://www.linkedin.com/pulse/journey-procurement-transformation-begins-part-i-prashant-mendki
By definition – Spend Analysis is an analysis of your spend (invoice paid), what items you are spending on (product), who you are paying to (supplier). It looks really simple – no?
When I worked with one of the large Media Entertainment company few years back, they had thousands of suppliers, millions of transactions, good amount of Maverick spend. It’s a global business with more than $2Bn in Spend, 12 different global systems. Thousands of transactions gets recorded every day by hundreds of business users. In that scenario, imagine getting answers to few simple questions like -

What is your direct & indirect spend? Do you know if this ballpark or close to actual?
Who are your top 100/1000 suppliers in terms of amount spent with them?
Who are your top 100 grouped suppliers (with same parent company) with highest spend? Ever checked if you negotiate at the group level you can save 5% probably?
Which items are in top 100 spend?
How many suppliers for top 100 items and what’s pricing variation?
Which Geography spending with whom and on what product?
Which business unit spending with whom and what product?

Nobody really asked these kind of questions – since everybody was working on that “Big transformation initiative”. And everybody thought they have answers to these questions. After struggling with existing excel sheets for few days to find answers, procurement director realized – this needs to be done with a holistic view and focused efforts. Then a big question came – where do we start? My answer – Your DATA.
The first step of spend analysisis to get the data out of your systems. All kinds of data which talks about spend. Suppliers, materials, invoice, PO, contracts, master data – all of it. You put a good data scientist to a job – and your data will start telling you story on what’s going wrong. For example -

How many vendors do we have with same or similar names? Most popular example in this is – IBM. If you cleanup all versions of IBM, I.B.M, IBM Inc., International Business Machine, I B M – and make it as one IBM – probably it will come up in your top 100. Imagine when you do this for those thousands of records and supplier base starts shrinking to a manageable levels. Simple deduplication might do the trick as well.
How many subsidiaries do I deal with for a parent group? Is there a way to negotiate at a parent group level to save spend? When you look at T&E spend – how many Marriott’s you can find in it? Courtyard, Fairfield, renaissance, JW, Ritz, Residence Inn et al. Assign “Marriott” as a parent company to each of these and it may come up in top 100 suppliers. You have now better negotiation power.
Spending on what? Do I have standardized terminology for all products? May be you have inventory at one location but you don’t have visibility because product numbers are different or typos in product names for the same product
What category of your product are your highest spend? If you classify your spend as per a classification taxonomy – either UNSPSC, customized one or other industry standard – you will have visibility towards category spend – when you link it with vendor data and look at it – may be its too scattered across vendors. Can you consolidate some of it, better negotiate and save?

Still question remains – what is starting point for all this. There are few steps –

Data Extraction
Data consolidation
Data Profiling
Cleansing
Standardization
Enrichment
Classification
Analysis

The result after all this – 2Bn $ organization identified – 3% of potential savings with a low hanging fruits in year 1. You can imagine savings after implementation of measures in its strategic sourcing program over years.
Let’s look at these steps – and how to implement those in next article.
Follow on Twitter - @pmendki

Journey of procurement transformation begins with …………..Part I

2015-01-26T15:03:00.001-08:00

As a part of procurement consulting practice, I used to interact with many procurement end users few years back. During dinner conversations I heard stories and jokes about how that so called “transformation project” is going on for years and after change in leadership couple of times – how nobody knows where it will go.

During the 1980s, procurement function’s focus was on creating a well-structured strategic sourcing process. It evolved further over years and moved towards developing sophisticated strategies, cross functional and delivering value to the organization. To achieve these goals – leaders planned for larger “procurement transformation” initiatives. The very definition of “transformation” implies a change from one form to another where the outcome is supposed to be much better. So in procurement world, this means rather than just applying “band aid” approach – changing things here & there – overhaul the existing function with focus on processes, people, technology, systems, compliance, communication et al.

When you talk about any such “overhauling” efforts – the timeline is over years. Procurement being a critical function to all organizational functions the interconnecting process change requires lot of collaboration between different business units. Also – the business still runs – mergers, acquisition still happens which directly impacts the “change” that you are planning. While many CPO’s made good progress to make procurement as a strategic enabler for organization, majority failed.

There could be many factors for failed initiative– One of it is “Wrong first step”

Chinese philosopher Laozi famously said “a journey of a thousand miles begins with a single step” – which means even the longest and most difficult ventures have a starting point. What if that “One Step” or first step is wrong? – you will still reach somewhere but may not be the goal you have decided.

The overwhelming journey of transformation consists of holistic integration of multiple components like – People roles & responsibilities, Process Automation, optimization, policy creation, monitoring & compliance, defining & implementing technology tools, change management, data management, spend analysis, Supplier relationship management, contract management, risk management and so on.

As initiative starts from all different directions, the first & most important strategic step of “Spend Analysis” does not get the due attention as a “first strategic step” and journey becomes forever. Journey of procurement transformation should always begin with a focused efforts on “Spend Analysis”

What is “Spend Analysis” and why it’s so critical to the transformation journey – let’s look at it in next post.

Original Blog posted on Linkedin Pulse - https://www.linkedin.com/pulse/journey-procurement-transformation-begins-part-i-prashant-mendki

Internet Of Things - IOT - Scenarios

2015-01-26T15:01:00.001-08:00

In my last contribution we discussed – what is IoT and how this third wave of internet will change the world. Next, what are the scenarios that can be envisioned at this point where IoT will make an impact. On a high level there are 4 that can be listed down.

Machine to Dashboard

When a device senses something, it will send that data to a dashboard – which in turn will alert certain system to respond. The other system responds depending on a priority and the operation ends there. The most common example of this scenario would be – server monitoring dashboard. Server process fails – a red alert goes to a dashboard – IT person responds to it or server restarts the process. This is not something new. It happens already. In IoT scenario we will see enhanced version of this that will change the speed with which these devices talks to each other. In real life a train collision can be averted in seconds, a plane mishap can be taken care better. The response time and automation will make the difference.

Machine to Machine

One machine talking to another machine. That is the integral part of IoT. Machines do talk to each other in today’s industrialized world, but mostly in a serial fashion. So one device completes the job, passes instructions to another and move on. In the IoT world – location of machine or type of machine will not be an issue. Multiple devices will communicate with each other – wired or wireless.

Machine to Data

Machine to Machine will create huge data to handle, what we call Big Data today. So there will be a need where connected devices can become consumer of these big data systems, and then to make run-time decisions or predictive analysis based on it. The speed, accuracy and volume will be consideration here.

Machine to Business process

This one will be the most important aspect which will probably touch every company. Supply chain processes and procurement processes will have IoT impact. So a truck of perishable food will have sensors to predict “best to use” time based on chemical levels rather than just thumb rule of number of days from manufacturing. A demand or supply planning can be done at real-time basis rather than just seasonal variable predictive algorithms. A supplier can sense and manage inventory based on actual shelf movement.
Next question is about the data generated in this wave. Will it add new aspect to Big Data – as the social media wave did? Will all these devices communicating with each other generate so much data that things will explode beyond imagined capacity? Let’s look at that in my next contribution – IoT and Big Data

Original Blog Post - http://supplychainminded.com/internet-of-things-scenarios/

Internet Of Things – Next Wave

2015-01-26T14:59:00.003-08:00

The new buzzword in technology is “Internet of Things” (IoT). The layman’s scenario that anybody will tell you is – A vending machine getting out of coke, will sense the quantity of bottles, transmit a message to warehouse that it needs more supply which may transmit a message to nearby transporting trucks to fill the order and within few minutes it’s refilled. So a person visiting, checking stock, placing an order and after processing getting a supply will be things of past. The entire supply chain scene is automated here in the era of IoT.

Internet has probably gone through 2 different phases since inception. If I leave technological advances aside – there was an era of “Internet of Content”. People browsed websites to get information. Loads of webpages, images, and movies were the part of this phase. It was a repository of data. You search it, browse through it and consume it for your own purpose. The 2nd wave was (still there) – “Internet of People” – This was when a new social media came big way and apart from email or chat – people got connected with each other. As technology advanced in parallel to enable more mobility devices accessing internet – this phase was faster than earlier. Now the 3rd phase is about to start – “Internet of Things”. Sounds magical yet, but by next year or so, don’t be surprised if your milk container starts telling you that the milk inside is not so good. Your dishwasher may place work order if it develops a snag. Things will start connecting and talking with less and less human intervention.

Technically – things will have an IP address to identify themselves. They will have sensors to receive and send messages. There will be a new protocol (like http) to exchange information. There will be new platform to develop applications. Whole new world of opportunities opening up in technologies – where you need enabled devices, programming things, new languages, new scenarios, lot of analytics, business process transformations, integrating it to different platforms, data and what not.
It may sound complex and confusing – but on high level – there are 4 types of scenarios that can be shortlisted. Let’s look at those in next article.

original Blog on - http://supplychainminded.com/internet-wave/

Your Data is Bad - Does it matter if you know in 3 hours or 3 Minutes ?

2014-11-09T17:33:00.001-08:00

These days every discussions in analytic and business intelligence areas eventually end up with "speed of analysis". Since SAP introduced HANA - the buzzword is about speed, real time, near real time dashboards. Everybody wants to talk about a cloud application - so they can get up & running with applications tomorrow, and if its deployed on HANA - more than happy since they get it faster. So CIO can start getting his dashboard from next week, every time he looks at it - its just near real time. Isn't it faster ROI ? Gone are the days when it used to take few months to get systems up and running, 3 hours everyday to get those BI reports and tune those dashboards where "Go Live" was a big event.

The only question remains - When CIO looks at that new dashboard created in 3 minutes rather than 3 hours - how much time does it take to tell you that your data in the system is bad. No surprise here.

Last week I was talking to a procurement executive from a reputed media company. They are going through this peculiar problem of "defining taxonomy" to address their dynamic business transactions - a photographer takes a photo of Brad Pitt taking coffee on the NY street and comes to them - gets paid $2000 and goes away. No PO, No Supplier, probably just a invoice with a gibberish - "Brad Pitt Photo" and a money paid. Now if that happens everyday with a fast social media, digitized world where you need to be the first one to get hold and publish it - you don't care about the "Process". Result - Bad Data. When a CIO - CFO looks at the "spend analysis" dashboard - which tells them there are "Other" category transactions which accounts for 28% of spend - guess a reaction.

Not to say - speed of analysis is less important, but as the title of this blog suggests - priority is important. If your data is bad - doesn't matter if you get analysis in 3 hours or 3 minutes time. If your data is good - anyway it doesn't matter 3 hrs or 3 minutes, since you know where to fix the problem already. Important part is - DATA Quality

Sustainability Reporting & Analytics Solution

2012-12-31T02:04:00.000-08:00

While concluding my recent post of Sustainability Performance Management as a next big thing, I realized that, most of the reader who want to do something, or understand the domain better - the real question is where to start the "Sustainability" journey. So I should write something briefly about this starting point, as I struggled the same question few months back.

When you start with any "New" initiative - the first step usually is - to understand where you are right now, so you can determine what to achieve and then define your steps and schedule to get there and how.

Sustainability is not any different here. You need to first get all your data - from all your systems, put it on a dashboard solution which provides you different analytical views and reports of the same data - so you know where do you stand with respect to your journey. Its easy to say - but hard to do thing, Getting all data from all your systems spread across landscape is a daunting task. Since this initiative is a multi dimensional covering HR, Finance, IT, Operations, Supply Chain, Manufacturing etc - The data collection remains a pain area. Post data collection, reporting - measuring analysis, implementing various initiatives to align things to global organizational strategies and then tracking the impact in each area is a continuous process.

SAP Sustainability analytics solution provides all these functionality aspects. Some functional features include -

Automated data collection from SAP and other systems
Pre-delivered content and reporting frameworks (GRI)
Central KPI library
Global carbon conversion factors
Strategic goals, objectives tied to KPIs
Initiatives tied to KPI‘s to drive performance
Emissions reduction analysis
Dashboards, scorecards, and benchmarks

Sustainability Performance Management - Next Big thing in EPM

2012-12-31T02:02:00.000-08:00

Since last few years, the industry focus is on optimization initiatives. It was outcome of a thought process post slow down few years back. So the questions that head honchos really asking was - I want to cut down the cost - but other than the employee layoffs, what are other areas that I should be looking at ? Where Do I spend more ? Who is spending ? Why ? Are there alternatives to get the same things cheaper? And all these questions lead to Business intelligence Dashboards. So finally BI come to an age, entered the drawing board of C level Executives and they started looking at it seriously.

So the Enterprise Performance Management - the new Avatar of Business Intelligence Dashboards - is what everybody is talking about. It all started with the financial things, as that was a priority number one - save money. Identify opportunities for potential savings. So Spend Performance Management is now a serious solution customer looks at.

What's the next thing industry will now look at - I think it will be Sustainability Performance Management. Lot of research reports in 2012 - suggested that CEOs thinking of sustainability as a strategic initiative rather than mere operational or CSR kind. One study concluded that "96 % of CEOs believe Sustainability should be integrated into the strategy and operations of a company - up from 72 % in 2007 ".

What are the change drivers ?

Sustainable Business Model - Secure business success
Resource Productivity - Decrease dependance from energy and natural resources
Advantage in Competition - Foster branding, Enhance product portfolio by sustainable products
Cost & Risk of compliance - Automation of compliance

The SAP Solution Map covers broad range of solution areas -

As we enter into the new year 2013 - I think SAP will have multi dimensional success in sustainability domain due to its dual strategy - Being a leader by example. SAPs own sustainability initiative internally will brand itself as a exemplar. On the other hand, with its innovative solutions starting from SuPM will make it Enabler for the larger industry.

We will surely follow on this topic more in coming time.

Thanks
Prashant Mendki

Original post on SAP Website - http://scn.sap.com/community/epm/blog/2012/12/31/sustainability-performance-management--next-big-thing-in-epm

The long-term benefits of SAP’s acquisition of Ariba: A Q&A with SAP mentor Prashant Mendki

2012-12-18T08:32:00.000-08:00

In the weeks since SAP wrapped up its acquisition of Ariba, there has been a lot of discussion about how the Ariba products and technologies will be delivered to the SAP installed base. There was some information announced at the SAPPHIRE NOW conference in Madrid, but SAP users want to know more.
To help us better understand this, I recently spoke with Prashant Mendki, a consultant and SAP mentor (@pmendki) specializing in procurement. Following is a transcript of our interview.

What have you heard from SAP procurement users since the acquisition of Ariba was announced? Have they been enthusiastic, cautious, surprised, not surprised?
As with many large mergers, the users I heard from were cautious. SAP and Ariba were competitors in the procurement market – especially in a supplier network area – so most of the users are looking for information on what will be done in areas of functionality overlap and products that offer the same or similar functionality. There are also a lot of questions about how the two formerly competing ecosystems will merge.

What do you see as that biggest functionality benefit SAP users stand to gain from this acquisition in the short term?
The biggest benefit for SAP users right now is access to the Ariba supplier network, which is the backbone of the Ariba solution suite. Ariba touts it as “the world’s largest business network with more than 730,000 companies transacting over $340 billion annually among 5 million users.”
And there are other advantages of course. Among them, cloud-based solution availability and the strength of the end-to-end procurement solution that will be available from SAP. For example, catalog management, which Ariba really pioneered, will be available in the SAP portfolio. The scenario SAP foresees is that the Ariba network will become a “one-stop shop for all supplier relations.”

A lot has been said about the benefit of Ariba’s cloud expertise. How important is that to users of SAP procurement solutions today?
Cloud is certainly a game-changer today and it’s very important for SAP customers, especially the SME customers. Of course, customers prioritize functionality over anything else to start with, but when it comes to comparing solutions, the upfront cost is definitely a decision maker. If there is an option available to get the same functionality and spread the cost over multiple years, customers are more eager to choose that. Cloud solutions provide this option.
In the short-term, SAP NetWeaver Process Integration (PI) and SAP Information Interchange OnDemand will definitely play a larger role at the technological integration level.

Is there anything about this acquisition that you think hasn’t received as much attention as it should?
The go-to-market model around this acquisition has not been discussed all that much. SAP traditionally works closely with its partners on implementation and delivery of SAP solutions. Ariba historically has not leveraged partners as much for its implementations because it had its own consulting division.
So right now it’s unclear how SAP will approach this. Will it continue to be partner-focused with Ariba implementations? If so, how will it enable partners? There is much to discuss here.

Lastly, SAP not only acquired Ariba, but also named Ariba’s CEO to the managing board and featured Ariba on the keynote stage at SAPPHIRE NOW in Madrid. What do you think all of this says about SAP’s commitment to procurement functionality in the long-term?
I think all of this shows that SAP is strongly committed to its procurement roadmap for the future. Many analysts have pointed out that supply chain and procurement is a prime area for optimization. In today’s market of shrinking margins, increased competition and increasing costs, there is a lot of space to identify, analyze and optimize the supply chain. And suppliers are the key to this.

Original Blog post by Dave Hannon - http://www.insiderlearningnetwork.com/davidhannon/blog/2012/12/11/the_long-term_benefits_of_sap%E2%80%99s_acquisition_of_ariba:_a_qa_with_sap_mentor_prashant_mendki_

By Dave Hannon @Daveatwispubs

Master Data Management – Product or Process ?

2012-09-19T04:25:00.002-07:00

I have 2 SAP systems and I want to fix my material master, Services Master. I want all that data to be clean, standardized, classified, enriched and load it back to my SAP in next 6 months. What do you suggest ? Chris - one of my key client was explaining during a “solution understanding” call.

My sales manager Tom, enthusiastically started talking about new version of the MDM platform by ERP company, tools, technologies, product landscape, licenses etc. After 30 minutes of sales pitch, I could see confusion on Chris’s face clearly. He said - but I don’t want to add any new product in my infrastructure for all this. Can you just implement MDM for me without I adding any new software ?

Both are using MDM implementation as a keyword, but in a completely different context. Chris wants to implement MDM as a process while Tom was trying to sell MDM as a new software. Whats the difference ? Lot I will say.

MDM as a product – when you sell a software license to a customer. Then implement that software with all required configuration. And then run the data through that software to get the specified output. Really simple process. All you need are few consultants who know how to configure software and understand the data issues well.

Now one size doesn’t fit all. Though software companies try to improve and include as many scenarios as they can in the tool – its still not perfect for all. Then data comes in all shapes and sizes. Different objects, different relationships, language and what not. So even after implementing software – lot of customers don’t get the optimum results. Also, many MDM tools need a good data as a input to start with – so they continue enforcing rules going ahead.

What is MDM as a process ? A process which includes a different sets of tools, customization capabilities, subject matter expert and data consultants – all this makes a MDM process. As an end to end function they can create, setup, execute and load the data. Data extraction, profiling, analysis, transformation, Quality checks, confirmation checks, data load. Everything executed as a package as per the requirement of customer. You don’t need to buy any license or software. Once your consultant company setup and articulate this model – it just runs for you. The subject matter is a key in this – as they are typically from the industry that customer belongs – so they understand the data well and can give you maximum output.

When to select product / Process ?

If you want this as a one time effort and then setup rules for business groups to follow – which keep data good for next few years – then I will suggest a process way. It’s a low cost, low maintenance and high quality approach. The consultant you choose is key.

If you think it’s a recurring issue – every month or so and its hard to setup data governance – go the product way.You can avail services of consultant as a one time effort and then implement product – so to implement all rules to make sure going ahead everything is adhered to.

Thanks

Prashant Mendki

Follow me on Twitter - @pmendki

Master Data Management & Spend Analysis

2012-09-15T09:14:00.000-07:00

"We are investing so much in our Master Data Management efforts. Can you not use the data that is clean and standardized during that process as a input to Spend Analysis portal - so we an achieve both simultaneously with low cost ?". You might have heard this question - if you are in a customer meeting with those techno savvy big companies just starting off on optimization drive.

What would be your answer ? If you are a sales person - you will think of it as a another negotiating tactic by customer, if you are a IT guy - I can see that smile on your face, if you are a business person - you think its absolutely possible, and if you are a Spend Analyst consultant - your answer is Yes and No. I personally think - I don all these hats, but for this blog - I am a Spend Analyst. So let me explain why Yes and why No.

Yes - If - when you started your MDM initiative you talked to "right" consultant and created a road-map as to how you can accommodate Spend Analysis as a second goal from the same.

No - If you already travelled few miles in your MDM roadmap, and think Spend Analytics data is a by-product of that efforts automatically.

Let me explain. Since the results of Spend Analytics initiative is all based on how good your data is - Data Management becomes an integral part of your initiative. If you pull all the data from your different systems and push it to spend visibility portal - all you will get is a report which doesn't make sense. You have to get the clean - good data. These data steps mainly include your supplier data and transactional data like invoices, PO and Contracts - with all the business rules.

We will look at all steps of data management for Spend Analytics in detail in next post.

Now how is that different from MDM ? MDM is a holistic initiative focused on data. This includes understanding of your existing data landscape, profiling all data objects, defining data governance processes, designing the output data structures and then the operational part of actual data extraction, transformation and loading. This is a very time consuming, high cost - high return initiative across all business units. It involves mainly customer data, supplier data, product data. A part of supplier data which gets cleansed in this process can certainly utilized during Spend process - but not as it is or with the same template. Now that's the reason, I said - if you don't plan it parallel - you can't match these rules and templates later. If you plan it with the "right" consultants - you can. Yes.

let me know your comments -

Thanks
Prashant Mendki
Follow on Twitter - @pmendki

Data Management - Terminologies & Definitions

2012-09-11T09:25:00.002-07:00

As a third step in my Data Management article series – lets look at commonly used terminology in the domain. Now these are very standard definitions I am quoting from a standard available glossary. The next step – next article would be to explain the relevance and usage of these terminology in business world. E.g. How to look at data standardization in supplier data context or material data context – when it comes to optimizing your procurement processes. That’s next.

In my first article in this data management series –I compared data management with the story of elephant and seven blind men. http://manageyourdata.blogspot.in/2012/09/data-management-elephant-seven-blind-men.html

The second post is more about – why its important to speak same language when you are running any data management initiative. http://manageyourdata.blogspot.in/2012/09/data-management-are-we-all-speaking.html

Data analysis : Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal of highlighting useful information, suggesting conclusions, and supporting decision making.

Data Governance : The exercise of decision-making and authority for data-related matters. The organizational bodies, rules, decision rights, and accountability of people and information systems as they perform information-related processes. Data Governance determines how an organization makes decisions -- how we "decide how to decide."

Data Governance Framework: A logical structure for organizing how we think about and communicate Data Governance concepts.

Data Governance Methodology:A logical structure providing step-by-step instructions for performing Data Governance processes.

Data Governance Office (DGO): A centralized organizational entity responsible for facilitating and coordinating Data Governance and/or Stewardship efforts for an organization. It supports a decision-making group, such as a Data Stewardship Council.

Data Mapping :The process of assigning a source data element to a target data element.

Data Modeling :The discipline, process, and organizational group that conducts analysis of data objects used in a business or other context,entities the relationships among these data objects, and creates models that depict those relationships

Master Data Management (MDM): A structured approach to defining and managing an organization's Master Data

Data Classification :The categorization of data, following various schema to support various business or technology goals.

Data Cleansing : Also referred to as data scrubbing. Data Cleansing is the process of detecting dirty data in a database (data that is incorrect, out-of-date, redundant, incomplete, or formatted incorrectly) and then removing and/or correcting the data. Data cleansing is often necessary to bring consistency to different sets of data that have been merged from separate databases. Cleansing data involves consolidating data within a database by removing inconsistent data, removing duplicates and re-indexing existing data in order to achieve the most accurate and concise database. It can involve manual tasks or processes automated by special Data Quality tools. A particular type of Data Cleansing is Address Cleansing, in which street addresses are converted to a standard format as set forth by the U.S. Postal Service master database. For example, standard abbreviations are utilized, typos are corrected and ZIP codes are converted to 9-digit format. Address cleansing is usually done in conjunction with address matching, a process that validates an address against one of the 57 million addresses in the USPS database

Data Conversion: The manipulation of information sets from one format or structure to another. Data Conversion is often required when acquiring sets of information from outside sources

Data Enrichment: An activity that supplements and/or improves the existing data

Data Mart: A repository of data gathered from operational data and other sources. The data may derive from an enterprise-wide database or data warehouse or from more specialized sources. The emphasis of a data mart is on meeting the expectations and needs of a particular group of users, so it may be designed to assist them in performing analysis and understanding the content

Data Mining: The analysis of data for relationships not previously discovered. Data Mining (DM) is also known as Knowledge Discovery. It is the process of automatically searching large volumes of data for patterns that may be used to predict future behavior

Data Profiling: The process of examining data in an existing database and collecting statistics and information about that data. The information collected may be used to collect metrics on data quality, assess whether metadata accurately describes the actual values in the source database, determine if existing data can be re-purposed, or understand risks and challenges in using the data

Data Quality: The practice of correcting, standardizing, and verifying data

Data Standardization: The transformation of data into consistent formats

Data Validation :As a broad concept, Data Validation refers to the confirmation of the reliability of data through a checking process. As a set of processes Data Validation refers to a systematic review of a data set to entity outliers or suspect values. More specifically, data validation refers to the systematic process of independently reviewing a body of analytical data against established criteria to provide assurance that the data are acceptable for their intended use. Within databases, Data Validation refers to procedures built into databases to define and check acceptable input for fields, and to accept or reject the data

For a detailed level glossary – you can visit http://www.datagovernance.com/glossary_d.html . Most of the definitions are from this glossary.

Thanks

Prashant Mendki

Twitter - @pmendki

Data Management – Are we all speaking same language ?

2012-09-04T03:36:00.000-07:00

I compared the “Data Management” with a story of Elephant and Seven Blind Men in my last blog post http://manageyourdata.blogspot.in/2012/09/data-management-elephant-seven-blind-men.html. I promised to start writing my views about the issues that I heard so far from my customers, consultants and product companies that I worked with.

The first issue is confusion with the whole terminology. This seems very basic thing but if all stakeholders in this value chain are not talking same language, same terms with same meaning the initiative is doomed to fail.

5 years back in 2007, when I was working on evaluating a “data mapper” product for a company in California – I realized how complex a terminolgy issue can be. I was at their office for 2 days, going through product screens, meeting high value real architects. The product was really good, nice UI, good functionality – but less appeal in the market. I was talking to marketing head, and he said – Prashant ask me questions about the product. Ask me when you seek a functionality in a product, what would you ask for. And I did that. You know what – the company worked hard based on such feedback from industry users and within a year launch new version which talks in terms of users and then bought over by a giant. Value unlocked. That was one off example.

What were my questions to them ?

1. How does ETL works in this ?

2. What is the data profiling mechanism?

3. Does this tool normalize my data ?

4. Does this tool classify my data ?

5. Does this deduplicate ?

6. Can this gives me exceptions to rules data sets ?

7. Can I override tool with my own rules ?

8. Does this toll enrich my data ?

9. Can I specify attributes for enrichment ?

10. Can I have multilevel enrichment ?

11. Can I map different datasets to one common datasets?

12. Can this tool produces validation reports with data ?

Few of these seems typical techno-functional and not so business based questions. But when you Go to market – who is your customer? For data – mostly its IT people – who are technical. The business will surely have a different set of questions but they will map to these invariably. How ?

What a Supply Chain or Procurement business person will ask typically for ?

1. How do I cleanse my multilevel redundant BOM (Bill of Material ) Data ?

2. How do I generate required spare parts listing with good data ?

3. Can I have cleansed, good quality suppliers list ?

4. Where do I aggregate my suppliers by parents – to leverage spending patterns ?

5. How do I search my customer list and aggregate that ?

6. Can I have a classified product list – to get necessary dashboard, inventory or spend amounts ?

Have a close look and you will see most of it maps to core questions above.

So in next post – I will try to provide glossary of terminology that invariably and interchangeably used while discussing Data Management .

As usual – Please keep sending your feedback & questions.

Prashant Mendki

Pmendki at gmail dot com

Twitter - @pmendki

Data Management - Elephant & Seven Blind Men

2012-09-02T03:03:00.001-07:00

I am sure most of you read a story of Elephant and Seven Blind Men. For starters - this is how the story goes -

"A number of blind men came to an elephant. Somebody told them that it was an elephant. The blind men asked, ‘What is the elephant like?’ and they began to touch its body. One of them said: 'It is like a pillar.' This blind man had only touched its leg. Another man said, ‘The elephant is like a husking basket.’ This person had only touched its ears. Similarly, he who touched its trunk or its belly talked of it differently."

As Wikipedia mentions - This story has been used to illustrate a range of truths and fallacies. At various times it has provided insight into the relativism, opaqueness or inexpressible nature of truth, the behavior of experts in fields where there is a deficit or inaccessibility of information, the need for communication, and respect for different perspectives.

The moral of the story is - While one's subjective experience is true, it may not be the totality of truth.

As this is true in every experience that we get in life - personal or professional, its more true in the domain that we all work and discuss on this blog - Data Management. The all main players in this world - Consulting companies, customer business units and the product companies - most of these behave like a blind men in the story. Everybody talks about data management, data governance, master data, intelligence and dashboard everyday. But the perspectives are different - looking at big picture is most of the time missing.

When people talk about Data Management, you invariably hear following things -

1. Master Data Management - How do I manage different master data in my company - Products, Suppliers, Customers ?
2. Data Quality - How do I maintain the quality of data - De-duplication, cleansing, normalizing ?
3. Data Governance - In this big system landscape, how do I govern the source, process and target systems and flow. How do i ensure sustainable and more consistent processes ?
4. Tools and Technologies - With so many vendors, ERP systems, BI systems in place - how do I choose the long term ETL soultions ? How do I architect my landscape for maximum benefits ?
5. Intelligence - The output of all my efforts is to get the efficiency in the process, optimize my systems - data and then garner intelligence to execute. Is MDM right solution, Spend Intelligence ? Multiple BI dashboards - or there is one stop solution for everything ?
6. Do I need to invest in different Datawarehousing investment to get data initiative benefit or my existing ERP will work ?
7. Should I start with my data initiative before looking at supply chain initiatives like Advanced Planning & Optimization implementation?

I am sure you may have your own experiences.

So What I am going to do here is - posting series of articles here, covering different perspectives from customer, consultants, software vendors etc.

Watch this place, and also let me know your suggestions which I should include here -

Thanks
Prashant Mendki
pmendki (at) gmail (dot) com
Twitter - @pmendki

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