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Spend analysis• A three-year project between @UK PLC
– The University of Reading, and
– Goldsmiths’ College (University of London).
• Artificial intelligence engine for:
– matching companies,
– matching products, and
– classification to eClass and to NSV.
• Highly automated system for fast turnaround.
• Analysed £96bn to date.
Matching
• Companies
• Products– Unit of measure.
– Re-sellers.
• Item level detail– allows like-for-like comparison, which means that
– opportunities for savings can be detected such as:
• price variance,
• price benchmark, and
• contract opportunities and contract leakage.
Classification• By ‘classification’ we mean
– assigning a product
– to a category or ‘class’
– by matching the product description to the class description.
• eClass is
– based on NSV,
– is a three-level category tree, and
– has ~2,000 categories.
Classification
• Automatically classify products
– to eClass (or NSV)
– from free-text descriptions on purchase order lines.
• Techniques include
– Bayesian statistics,
– decision trees, and a
– rule engine.
• Consistent application across organisations.
• Also applied in @UK plc marketplace.
Analysing spend
• Purchase order spend is
– classified to eClass, and
– analysed at product level.
• Invoice spend is analysed using either:
– the product profile of the supplier;
– the category code for the supplier, including
• SIC database and
• Coding International; or
– scale by average carbon profile (last resort).