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Leveraging Data for Innovative
Procurement Analytics
BravoSolution
Kristian O'MearaSVP, Value Engineering
Michael SheheeGlobal Head of Sourcing & eCommerce
sig.org/summit
2© All Rights Reserved - Confidential
Procurement Analytics
Leveraging Data for Innovative
Procurement Analytics
March 14, 2017 | 10:30 AM - 11:45 AM
Kristian O‘Meara & Michael Shehee
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Kristian joined BravoSolution in 2001 and is responsible for global Value Engineering. Kristian works with senior executives to identify opportunities to maximize their organizational outcomes.
He has 20 years of procurement and supply chain experience helping procurement organizations drive financial results, achieve organizational excellence, manage risk and drive innovation.
Prior to joining BravoSolution, Kristian held various positions within the Supply Chain Solutions consulting practice for Ernst and Young/Cap Gemini.
Kristian holds a Bachelor's of Science in Business Administration from Ohio State University, Max Fisher College of Business.
Background:Kristian O’Meara
SVP, Value Engineering
About Your Presenter
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Agenda
Goals & Objectives
Challenges & Questions
Benefits & Examples
Today vs. Future
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Shifts the power to perform analysis from the hands of the
few to the many.
Modern Business Intelligence
Moving from being the provider of analytics, to the
enabler.
Data, charts, and dashboards are more accessible by letting
people interact with data using natural text and language.
We are in an evolution of standard reporting to storytelling.
Gartner, 2016
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The Procurement Whispers
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Goals & Objectives
Challenges & Questions
Benefits & Examples
Today vs. Future
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Top Challenges & Questions
1. How do I collect the data?
2. What data is needed?
3. Where do I start?
4. Who has access?
5. Frequency of data collection?
6. What benefits can be achieved?
7. How do roll it out?
8. Why not use ERP?
9. How do I raise visibility?
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Goals & Objectives
Challenges & Questions
Benefits & Examples
Today vs. Future
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Category
Strategy
Opportunity
AnalysisSpend
AP/PO
Master
Data
Projects
Suppliers
RFx and
Auctions
Adoption /
Operations
P2P
Savings
Risk/
Compliance
Supplier
Enrichment
Market
Analysis
1
2
3
4
Core
Value Add
Nice-to-have
Emerging
Performance
Analytics Content
Compliance
Contracts
Supplier
Extracts
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Harmonized Analytics Examples
Traditional vs. Non-Traditional
Projects & Contracts
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2X2 reveals a segmented attack strategy –Value Creation combined with Aggressive Sourcing and SVM
Segmentation Example
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Analytics: 360 Report - Usage
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Procurement Goals & Objectives
Cost Reduction
Aggregate cross-business
demand
Define strategic processes
to drive collaboration
and negotiation
Execute RFx and Auction workflows
Track key sourcing
activities and monitor results
Risk Tracking
Define and manage supplier risk scorecards
Improve collaboration on supplier issues
Manage supplier and contract performance
Integrate 3rd
party data sources for key
risk insights
Savings Management
End-to-end management of the savings
tracking process
Robust approval and workflow
processes
Flexible and comprehensive reporting and
analysis
Link procurement activities to validated
savings results
Optimization
Increase the
quality of bids
Allow for
expressive
bidding
Improve decision
support with
applied business
constraints
User category-
specific sourcing
tools to drive
incremental
value
Spend Visibility
Gather, cleanse,
and categorize
all enterprise
data
Monitor spend to
identify patterns
Evaluate savings
opportunities
Improve supplier
leverage,
contract
& price variance
Drive agenda
for value
Supplier
Relationship
Management
Streamline the
assessment
process to
ensure supplier
capabilities
Qualify suppliers
against
capability
requirements
Segment
suppliers and
monitor the
supplier in a 360
view
Compliance
Manage key
contract data
with alerts and
milestone
tracking
Easy access to
contractual
documents in a
secure
document
repository
Track end-to-end
contract
activities and
changes
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Confidential1818© All Rights Reserved - Confidential
Real World Case Study: Leveraging Analytics for Procurement
Business Issues Cable & Wireless (CWC) $2.5B / yr company buys
Columbus Networks $2.5B / yr company
Legally required "Clean Room"
Can we justify the acquisition?
Synergy (Headcount) implications?
CapEx and OpEx considerations related to three year plan
Solution• Spend Analysis Module
• "Spend Snapshot" for Columbus ERP's. 45 days to "Live"
• Virtual Clean Room
Outcome• Identification of cost reduction and cost avoidance areas of
opportunity ($10's of millions)
• "Day One" Game Plan
• Creation of a specific plan with targeted suppliers, cost
savings and payment terms opportunities
• Validation that the deal was NPV positive
Mergers and Acquisitions
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Real World Case Study: Leveraging Analytics for Procurement
Business Issues 18 ERP's (PeopleSoft, SAP, Workplace, Dimensions, etc)
• Terms vary by contract, by business unit, by location
• Treasury crisis related to working capital management, FX
risk, and liquidity/cash management
• How can you improve what you can't identify?
Solution• Identify the payment terms for every supplier, every PO,
every business unit, every location, every ERP
• Prioritize, negotiate, rationalize, update systems, track
working capital improvement
• Roll up your sleeves, go to work, and get dirty
Outcome• Huge increase in Working Capital
• Reduced pressure on quarterly operating results
• Reduced borrowing costs
• Reduced liquidity issues
• Reduced FX risks
• Reduced currency evacuation issues
Payment Terms Rationalization
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Real World Case Study: Leveraging Analytics for Procurement
Business Issues 18 ERP's (PeopleSoft, SAP, Workplace, Dimensions, etc)
• Who's spending money, on what, where, with what supplier and why?
• What are they buying?
• How many suppliers do we have?
• What's the Tail Spend?
• Is the spend with contracted suppliers?
• After the Fact PO's
Solution• Deploy a Spend Cube
• All transactions, not just a % of Spend
• Automated, end user definable, rules
• Advanced, Artificial Intelligence reporting
• Manual: simple as drag and drop pivot tables
• Automatic: bring me insights based on Best Practice
Outcome• Reduced Tail Spend by $10M
• Reduced supply base by >2,300 suppliers
• Procurement Operations Intelligence:
• 80% of PO's <$5000 (deploy a P-Card)
• 25% of PO's after the fact (enforce policies, name names,
consequences)
• Knowledge is Power: stop supplier "divide and conquer"
• Savings Attainment Tracking
• Compliance
Maverick Spend
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Design Concepts: Analytics Maturity
Prescriptive Analytics
Degree of Intelligence, Business Impact
Guided Analytics
What might happen?
Competitive Advantage
What should I do?
Traditional BI
What happened?
What is happening?
Today
Future
Predictive Analytics
Descriptive Analytics
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Leveraging Data for Innovative Procurement Analytics
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BravoSolution
Kristian O'Meara
k.omeara@bravosolution.com
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