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EIM220 – Improved Visibility Through Spend Analysis
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EIM220 – Improved Visibility
Through Spend Analysis SAP Spend Performance Management
Copyright © 2011 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
1. Understand how SAP Spend Performance Management can help high performing
companies to effectively source, negotiate with suppliers, and ensure compliance by
improving visibility into their spend information.
2. See how Accenture has added immense value to the procurement process of one of its
top customers by helping them cleanse the procurement data without using any third party
data enrichment services
3. Discover how Accenture has addressed direct procurement related gaps in the
standard product by developing custom reports and strong analytics
4. Get a quick preview of Accenture’s strong credential in this product arena, in house
developed accelerators and assets that drastically reduce the implementation timeline
5. Short Demo 2
In This Session…
Copyright © 2011 Accenture All Rights Reserved.
3
Agenda
Copyright © 2011 Accenture All Rights Reserved.
1. Industry Challenges
2. SPM – A walkthrough
3. Case Study
4. SPM Offering at Accenture
5. Short Demo
6. Q & A
7. Summary
4
Typical Situation in
Procurement Company growth (e.g. through mergers & acquisitions)
– Many ERP systems
– Divisional Procurement units
Transparency of decision-critical information often missing
– “Low hanging fruits” already realized – looking for new savings opportunities
– Difficult to manage Procurement performance (e.g. compliance issues)
How can you unlock and sustain the next wave of savings?
Time
TC
O
Sav
ing
s
Typical Benefits
Desired Benefit Stream
Copyright © 2011 Accenture All Rights Reserved.
5
Complete visibility of
Procurement Process
Spend per
supplier
hierarchy?
Spend per
category?
% of on-time
deliveries?
Number of
suppliers?
It can be quite difficult to answer the following questions, accurately, in a timely
manner, across all sites/divisions.
“Standard” topics
“Advanced” topics
Spend per BU /
country?
Contract
compliance?
Top ten
suppliers?
Supplier
compliance
with SLAs ?
Procurement
savings & cost
avoidance?
% spend /
suppliers managed?
Copyright © 2011 Accenture All Rights Reserved.
6
Top Priorities of every CPO
Reduce Spend
Increase Cost
Savings
Manage Supplier
Risk
Create a complete spend picture for the organization
Systematically identify procurement savings opportunities
Determine supplier risks in advance, insulating the business from supplier disruptions
Increase spend under management
Reduce maverick spending and contract leakage
Copyright © 2011 Accenture All Rights Reserved.
High Performers use
automated solutions
Source : Accenture research and insights into
procurement performance mastery, 2007
82%
79%
46%
65%
76%
71%
8%
3%
5%
5%
1%
5%
Technology support
sourcing
Common and automed R2P
platform
Self-service e-Invoicing
Supplier integration
technology
Procurement master data
harmonization
Reporting excellence
Master Low performer
Best practice in technology (Percentage of responses)
The value of user friendly ad hoc reporting capabilities is
seen by over 70% of the masters who deployed
technology allowing timely reports driven transparency
into the organization.
Source: Aberdeen Group, Dec 2009
Best-In-Class enterprises have their reliance on spend
analysis automation and reflect the notion that these top-
performing enterprises have leveraged technology to
achieve desirable performance and drive value to the
greater enterprise
7 Copyright © 2011 Accenture All Rights Reserved.
Poor spending analysis
capabilities…
Source: Aberdeen, Spending Analysis Benchmark Report, 2003
Only 51% of enterprises have a formal spending analysis program
Formal spend
program
Those with formal programs only cover half of company-wide spend, on average
51%
49%
1% 2%
16%
81%
Slight/No Value Neutral Moderate Value High Value
81% of the companies place high value on spend analysis function
Source: Aberdeen Group, Dec 2009 Only 8% companies have automated the Spend Analysis process
Source: Aberdeen Group, Dec 2009
8 Copyright © 2011 Accenture All Rights Reserved.
9
Agenda
Copyright © 2011 Accenture All Rights Reserved.
1. Industry Challenges
2. SPM – A walkthrough
3. Case Study
4. SPM Offering at Accenture
5. Short Demo
6. Q & A
7. Summary
Do you know what is SPM?
10
• Aggregate data from SAP and non-SAP sources
• Standardize and enrich enterprise-wide spend data
• Conduct in-depth analyses
• Highlight non-compliance
• Manage supplier risk
Solution Highlights
• Analytical application built on top of standard SAP BW
• Flexible drag and drop interface for ad-hoc reporting
• Prepackaged with 130+ out of the box reports
• Current release is SPM 2.1 and SPM3.0 is in ramp-up
Spend Performance Management
Copyright © 2011 Accenture All Rights Reserved.
Spend Analysis Life Cycle
11
Step 3: Data Cleansing (Optional)
• Supplier Normalization
• Spend Classification
Step 2:
Extract Data
Step 3:
Enrich
Step 4:
Analyze
Vendor
Knowledge
Base
Item
Knowledge
Base
Fe
ed
ba
ck
Step 1:
Identify
Travel Data
Corporate
Purchasing
Card
Freight
Suppliers,
Telecom &
Others
Other
GL
Data Oracle
eProcurement
Step 2: Data Extraction
• Define data extraction templates
• Extract Data
• Aggregate & structure data
Steps 4: Reporting & Analysis
• Publish data to Spend Analysis
• Reports and Dashboards
• Identify saving opportunities
Step 1: Opportunity Identification
• Identify data sources
• Define enrichment strategy
Copyright © 2011 Accenture All Rights Reserved.
SPM can help you to…
• Over 130 out of the box KPIs and Analytics
• Find and act on savings potential via E-Sourcing integration
• Proactively monitor contract compliance
• Set up performance targets on critical success factors
• Collaborate effectively to act on insights
• Highlight single supplier dependencies
• Establish supply risk mitigation priorities
• Contextually understand spend volume at risk
• Automate data capture from disparate systems
• Data accuracy for faster insights
• Ad-hoc Reporting and dash-boarding
Gain Spend Visibility
Reduce Supplier
Risk
Identify Savings
Opportunities
Increase Spend Under
Management
Spend Performance Management
12 Copyright © 2011 Accenture All Rights Reserved.
13
Agenda
Copyright © 2011 Accenture All Rights Reserved.
1. Industry Challenges
2. SPM – A walkthrough
3. Case Study
4. SPM Offering at Accenture
5. Short Demo
6. Q & A
7. Summary
A world leader in premium
audio
14
Challenges and Opportunities
Accenture Approach
• Integrated view of the procurement and supply chain
activities and the associated interactions with suppliers
• Standardized processes and policies across regions
and business units
• Improved availability of information (not just data)
when needed for effective decision making and to
drive savings
• Visibility into spend and savings (forecast and actual), performance, and contracts
• Non-standard processes and disparate systems across regions and business units
• Manual and paper-intensive processes with limited controls
• Limited ability to identify savings, reduce costs and mitigate risks
• Reliable cost estimates for customer quotations
• Develop a global integrated scalable system which
would enable them to standardize processes and
policies, improve operational efficiency, identify
further savings and improve availability of information
for effective decision making
• Gain visibility into spend by implementing Spend
Performance solution
Results & Benefits
Copyright © 2011 Accenture All Rights Reserved.
Standard SPM Solution –
Fit/Gap Analysis
• Invoice (Spend) reports
• How much was my historical spend (by material/supplier/plant)?
• Drill down/up feature
Solution selected for the following reasons
• Direct Procurement
• Classification
• Payment Terms
• Purchase Order (Committed Spend) reports don’t work well
Gaps identified in the Standard SPM Solution
Copyright © 2011 Accenture All Rights Reserved.
How to solve spend data
challenges?
16
Global Supplier
Supplier master data from each
business division is mapped to the
global supplier data. The mapping
is done by Accenture process team
along with client’s business team.
Create a global supplier data with
parent child linkages for Supplier
Enrichment.
• Standard Supplier Names
• Addresses
• Locations
• Parent-Child Linkages
Division #1
Division #2
Division #3
ERP Supplier Normalized Supplier
Supplier 1
PO Box 55, Portsmouth
Hants PO6
Purchase $150,000
Supplier 1
P O Box 55, Portsmouth
Hampshire PO6 3AU
Purchase $600,000
SUPP 1
PO Box 55, Portsmouth
Hampshire PO6 3AU
Purchase $250,000
SUPPL 1
PO Box 55, Portsmouth
Hampshire PO6 3AU
Purchase $200,000
Similar approach is followed to address Spend Classification.
Copyright © 2011 Accenture All Rights Reserved.
17
• Sales/Operational forecast data is extracted from future demands
• The future demand consists of the data from POs, PR’s schedule lines
• Upload target and negotiated price on regular basis
• Compute savings based on target versus negotiated comparison
Division #1
Division #2
Division #3
SPM
Division #1
Division #2
Division #3
Sales
Forecast &
Price Yearly
Operational
Forecast
Monthly
Address Direct
Procurement gaps…
Copyright © 2011 Accenture All Rights Reserved.
18
Agenda
Copyright © 2011 Accenture All Rights Reserved.
1. Industry Challenges
2. SPM – A walkthrough
3. Case Study
4. SPM Offering at Accenture
5. Short Demo
6. Q & A
7. Summary
Spend Management Offering
at Accenture
19
• State of the art SAP SPM 2.1 demo environment
• Offering with accelerators in the form of How to Guides, Templates, Manuals, etc
• Strong relationship with the SAP SPM product development team at SAP Labs
SAP SPM 2.1 demo
landscape with connect
systems:
• SAP SPM 2.1 Demo
• SAP E-Sourcing 5.1
• SAP BW 7.0
Key Accelerators
Master Data Collection Guide
Transactional Data Collection Guide
Configuration Guide
User Training Manual
Sample Cutover Plan
Scoping Questionnaire
Business Blueprint
Data Validation Guide
Functional Design Template
Technical Design Template
Copyright © 2011 Accenture All Rights Reserved.
20
Agenda
Copyright © 2011 Accenture All Rights Reserved.
1. Industry Challenges
2. SPM – A walkthrough
3. Case Study
4. SPM Offering at Accenture
5. Short Demo
6. Q & A
7. Summary
Out of the box Dashboards
21
• Snapshot of key performance indicators specific to user role
• Out of the box role based dashboards
• Ability to personalize and create custom dashboards
Copyright © 2011 Accenture All Rights Reserved.
Online/Offline Briefing Book
• A briefing book is a collection of
snapshots of reports, dashboards, or
both.
• Capture the information displayed in
reports and dashboards in briefing
books to conserve a view of the
data.
• View reports offline through briefing
book viewer.
22 Copyright © 2011 Accenture All Rights Reserved.
Performance Monitoring
23
• Keep track of the most important KPIs
• Quickly identify the top 5 contributors
• Set goals for each of the KPIs and drive the business to work toward the goal
Copyright © 2011 Accenture All Rights Reserved.
Actionable Integration with
E-Sourcing
• Identify the savings opportunity
• Initiate the sourcing event to
reduce cost
• Create E-Sourcing Project,
RFx, Auction
24
Copyright © 2011 Accenture All Rights Reserved.
Supplier Risk Analysis (Optional)
25
• Snapshot of supplier risk analysis
• Out of the box supplier risk reports
• Identify high risk suppliers using risk attributes
Copyright © 2011 Accenture All Rights Reserved.
26
Agenda
Copyright © 2011 Accenture All Rights Reserved.
1. Industry Challenges
2. SPM – A walkthrough
3. Case Study
4. SPM Offering at Accenture
5. Short Demo
6. Q & A
7. Summary
27 Copyright © 2011 Accenture All Rights Reserved.
Q & A
28
Agenda
Copyright © 2011 Accenture All Rights Reserved.
1. Industry Challenges
2. SPM – A walkthrough
3. Case Study
4. SPM Offering at Accenture
5. Short Demo
6. Q & A
7. Summary
1. SAP Spend Performance Management helps high performing
companies to effectively source, negotiate with suppliers, and ensure
compliance by improving visibility into their spend information.
2. Accenture’s in-depth procurement knowledge helps customers to
cleanse their procurement data without using any third party data
enrichment services
3. Accenture’s process knowledge coupled with strong SAP BI capability
helps customers to address direct procurement related gaps in the
standard product by developing custom reports and strong analytics
29
Summary
Copyright © 2011 Accenture All Rights Reserved.
30
Thank you
Copyright © 2011 Accenture All Rights Reserved.
For more information on Accenture’s SAP
capability, please visit:
http://www.accenture.com/in-en/technology/systems-integration/sap-
solutions/Pages/index.aspx
31
Feedback
Copyright © 2011 Accenture All Rights Reserved.
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session! EIM220