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Smarter Data Discovery for ProcurementUtilizing Cognos and Watson Analytics
Please Note:
• IBM’s statements regarding its plans, directions, and intent are subject to change or withdrawal without notice at IBM’s sole discretion.
• Information regarding potential future products is intended to outline our general product direction and it should not be relied on in making a purchasing decision.
• The information mentioned regarding potential future products is not a commitment, promise, or legal obligation to deliver any material, code or functionality. Information about potential future products may not be incorporated into any contract.
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• Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon many factors, including considerations such as the amount of multiprogramming in the user’s job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve results similar to those stated here.
Agenda
3
EXAMPLES
THE NEED
POSSIBILITIES
Lydia Tilsley – Business Analytics Manager,
Corporate Operations Supply Chain Management, United
Technologies Corporation
2
A global leader in building systems and aerospace industries
We invent new and better ways to keep people safe, comfortable,
productive and on the move
Moving the World Forward
Iconic brands delivering the
smart, sustainable solutions
the world needs
6
Our BrandsOur Brands
52% 36%
12%
Commercial
& Industrial
End Markets
56% 44%
Original
Equipment
Manufacturing
Sales By Type Sales By Geography
38%
27%
20%
15%
Asia
Pacific
Europe
United
States
Other
7
Balanced Across Markets & GeographiesBalanced Across Markets & Geographies
Military Aerospace
& Space
Commercial
Aerospace
Commercial
& Industrial
Original
Equipment
Manufacturing
Aftermarket$56B 2015 net sales
UTC Supply ChainUTC Spend
8100,000+ suppliers
~5-6K Supply Chain Employees Globally
Supply Chain Enterprise System
Tools & Technology
Non-Product
Product
Consolidated
Supplier Data
Supplier Portal
Supplier Insights
Spend Analysis at UTC
User adoption – go to tool for all spend requests
Time savings – from weeks to minutes
Insights –
• Where can we find savings
• Target days to pay1 to 30
31 to 6061 to 90
> 90IMMEDIATE
Compliance to Payment Terms
FALSE
TRUE
Insights on the horizon
• Spend (over various periods of time) by commodity, by region, by country, by division, by site etc.
• Payment terms by commodity
• Contract compliance and long-term agreement coverage by commodity
• Days Paid Outstanding by commodity
• Spend by supplier - with trends
• Diversity spend
IBM Procurement
Piero Giangrasso, Project Team Lead, Web
Applications & Collaboration, IBM Procurement
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0
Capital / Mfg Equipment
Other
Travel
Services-Complimentary Workforce2
Telecommunications
Logistics
Networking / Connectivity
Software
IT Products/Services/Maintenance
Facilities / Maintenance and MRO
Services-Corp. and Professional (CPS)
Services-Technical Staff / Services
Marketing and Communications
S&GP Segmentation$Billion
$4.4B of production spend
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IBM Global Procurement
S&GP41%
IPS48%
Logistics2%
Production 9%
$50B IBMProcurement Managed
Spend - 2015
Active suppliers: 14k
Spend - Top 50
suppliers47%
The Digitization of Procurement
3
Procurement functions are a rich source of data
740KPurchase Orders
2MInvoices
14KSuppliers Managed
148KActive Contracts
$50B Spend Managed
22K Sourcing
Events
IBM Procurement
Cost Management
Contract Management
Supply Chain Risk & Social
Responsibility
Supplier Selection
Material and Labor Sourcing
Supplier Relationship Management
Accessing this data unlocks benefits
Innovation
Quality
Efficiency
Accuracy
Speed
Flexibility
Leverage Emptoris data to solve existing business problems
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1. Extract Emptoris data to our Procurement Data Warehouse
• Enables linkage to all other IBM Procurement data.
• Spend by Contract
• RFx spend vs PO data
2. Cross Suite reporting within Emptoris
• Solves tactical business problems
• Inactive users with activity across Emptoris modules
• Non-Master supplier report
• User Role across modules
Req
Data
ERP Data
Emptoris Data
Central
Data Mart
Information is Organized
Into a Data Mart
Watson Analytics in Procurement
Key Values
Predictive and Prescriptive
Analytics
Customized Reporting
Real-Time Data
Maintenance
Common use cases
Payment Term
Analysis
Payment Term
Analysis
Compliance
Analytics
Compliance
Analytics
Master Data Management Analysis
Master Data Management Analysis
Transaction Automation Analysis
Transaction Automation Analysis
Risk and Fraud
Analytics
Risk and Fraud
Analytics
15
POSSIBILITIES
Vijay Chougule – Offering Manager,
IBM Emptoris Spend & Procurement Analysis
Enabling Insights at various levels
Deeper Insights at individual spending dimensions
Summary level Insights to your business Smarter Insights to KPIs
I need to holistically track and monitor
my Spend against industry benchmarks
I need to be able to slice-n-dice the
spend data up-to the transaction level to
mine opportunities
I want to understand what best
influences outcomes by performing
smarter data discovery
CPOs / Procurement Executives Spend Data Analysts Category Managers
Assembling a Dashboard: Cognos Analytics
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19
20
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Procurement Insights
Cognos Analytics would
be available with
Emptoris by 4Q2016*
Explore Watson Analytics TODAY!
Engage with our services further to
identify right content
23
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Vishnu Tadepalli– Sourcing Consultant, IBM
Procurement Services (IPS)
EXAMPLES
Key Values
Predictive and Prescriptive Analytics
Customized Reporting
Real-Time Data Maintenance
Common Use Cases
Payment Term Analysis
Compliance Analytics
Master Data Management Analysis
Transaction Automation Analysis
Risk and Fraud Analytics
Watson Analytics in Procurement
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Spend Analytics
Reduce3 – 7% procurement cost
Spend Analytics for consolidating company-wide data, establishing baselines and anchoring strategic
sourcing decisions
Historical data , Quarterly
Transaction Automation Opportunity Analysis
Increased Automation by 25%
Provides deep Opportunity Analysisof current spend for identification of opportunities to enable one or more
Advanced Transaction Automation Solutions to deliver faster transactions while drastically improving compliance
and reducing unit prices.
4 weeks, Historical data , Half yearly
Supplier Payment Terms
Optimization (SPTO)
Working capital savings up to 0.5%
SPTO for increasing working capital, and reduction in cost of capital with
optimal usage of standard & discounted payment terms
3 - 4 weeks, Historical data , Quarterly
Occupational Fraud &Abuse Discovery
Identification of potential Risk suppliers/ employees or
transactions
Occupational Fraud analytics to mine through transactional data to identify potential fraud in procurement to payment process & in T&E Claim
Process
4 - 6 weeks, Historical /Current data , Half yearly
Compliance Analytics
Increased Process Compliance & Effectiveness
Analytics solution enables organizations in the process of monitoring and analyzing process compliance &
plugging savings leakage
3 - 4 weeks, Historical data , Quarterly
Master Data Management
Updated Master data with cleansed, standardized,
enriched data
Analytics solution checks the health of the master data and facilitates
normalizing, cleansing and enrichment of master data
12- weeks, Historical data , Yearly
S2P Help Desk Analytics
Increased Customer satisfaction
Analytics solution measures the type of queries received, resolution
provided , C-Sat Score to provide insights and recommendations to
increase C-Sat Score
2 weeks, Historical data , Monthly
S2C & P2P Process - KPI
Analytics
Increase process efficiency
and effectiveness
Analyze , measure and manage the
essential KPI’s proactively and spot the
problems influencing the finance of the
company
2 weeks, Historical data , Monthly
Watson Analytics in Procurement
Savings Identified for IPS Clients using Advanced Analytics
Potential
Benefits
$4M$13MPotential
Benefits
Potential
Benefits
$8M
Global Telecom Service Provider
� Vendor consolidation opportunities
across categories, potential
savings of $13M identified
� $ 0.6B Non-PO spend can be
potentially moved to contracted PO
spend leading to
- Better control and visibility
- Increased contracted volumes with
vendors and hence price reductions
Global Semiconductor Manufacturing
Compliance Issues identified in Supplier
Payment Terms
Impact on Discounts
� $0.2M additional discounts are available
due the migration in Payment terms
Impact of Non Compliance on Payments
� $295M (50%) Non compliant spend is
assessed to have a Bad impact on the
payments
FMCG major in NA
�Supplies are non-compliant as against
orders placed
� 82% of the total over-deliveries are
made by four vendors
� 43% of the total under-deliveries are
made by ten vendors
� 25% of all invoices accounts to 49% of the amount blocked
�A total of $27M on blocked cash for
business is contributed by the top
eleven vendors
Supplier Payment Terms Optimization Dashboard
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IBM Global Process Services
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IBM Global Process Services
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IBM Global Process Services
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IBM Global Process Services
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IBM Global Process Services
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IBM Global Process Services
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IBM Global Process Services
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IBM Global Process Services
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Try Cognos and Watson Analytics for FREE!
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Thank You!