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speakers.

In the meantime, please take a look at the upcoming SIG networking events listed on the right side of your screen

and plan to join us if you are in one of

these cities this fall.

For more information and to register for all SIG events:

www.sig.org

NETWORKING EVENTS

GLOBAL SUMMITS

Oct 17-20 – Carlsbad, CA

SYMPOSIUMS

Nov 9 – Seattle, WA

Nov 9 – London, UK

Jan 18 – New York, NY

REGIONAL ROUNDTABLES

Nov 3 – Pittsburgh, PA

Networking and sharing thought leadership are part of SIG membership

Global Summits – attend two large events with 50+ breakouts, 5-8 keynotes and unlimited networking opportunities

Global events in North America, EMEA, APAC – attend SIGnature

events, GBS Roadmap series, Challenge awards

Weekly Webinars and Monthly Town Hall Teleconferences –access virtual thought leadership

Peer2Peer Resource – ask top-of-mind questions for instant responses

SIG Resource Center – access 4,000+ presentations, research, whitepapers, tools, templates and more

Career Network – post and find jobs or internships

Student Talent Outreach – meet students interested in a career in supply chain, sourcing or services

bit.ly/SIGLinkedIn

@SIGinsights

bit.ly/SIGfacebook

bit.ly/SIGYouTube

Stay connected with other SIG members through various social media channels

bit.ly/SIGBlog

SIG Global Summits are semi-annual events with 350-400 decision-makers in attendance

Global Summits

• 3-days of networking in a non-commercial

environment

• 5 keynote sessions

• Global brands

• CPO Roundtables

• Over 50 breakout sessions

• Hundreds of industry thought leaders with a

buy-side ratio of 70:30

Carlsbad, CAOctober 17-20, 2016

67% of delegates are director level or above, of which 43% are

VP/C-level

Recent speakers include:

http://www.google.com/imgres?imgurl=http://www.skynet.ie/~tyrion/pro/pres/09_zip/microsoft-logo.jpg&imgrefurl=http://www.skynet.ie/~tyrion/pro/pres/09_zip/&usg=__lxp5mveq4AmpiJwQ2odMNFFXK8E=&h=686&w=2846&sz=80&hl=en&start=1&itbs=1&tbnid=qXPGv2e2QgNLeM:&tbnh=36&tbnw=150&prev=/images?q=microsoft+logo&hl=en&gbv=2&tbs=isch:1

We are bringing SIG to you…all over the globe

GLOBAL EVENTS

GLOBAL SYMPOSIUMS

Nov 9 – London, England

GBS ROADMAP SERIES

Nov 15-16 – Copenhagen, Denmark

Mar 2 – Zurich, Switzerland

CHALLENGE THE FUTURE AWARDS PROGRAM

Feb 2-3 – London, England

For more information go to: www.siguniversity.org

Online learning environment with multiple eLearning options: Cohort, Self-Paced and Custom Solutions

Modules with lessons, formative assessments, and NO final exam

Certification good for 5 years

Early enrollment options that can save you up to 25%

Certified Sourcing Executive program coming in 2017

Updated governance, risk and compliance program coming in 2017

Certified Sourcing Professional starting January 9th, 2016!

6© 2016, GEP. All Rights Reserved.

PROCUREMENT ON THE MOVE

Innovations in Spend AnalysisA new way of looking at spend data is enabling new opportunities


PROCUREMENT ON THE MOVEToday’s Speakers

Paul Blake – Technology Marketing, [email protected]

28 Years in the business technology industry

Previously project manager for B2B eCommerce projects in Europe, Middle East and Africa and Head of Development for business intelligence in the financial sector.

Ed Pyo – Senior Manager, [email protected]

Leading Supply Management initiatives over the past 20 years, Ed has directed a wide range of Procurement, Procure-to-Pay (P2P) and operational projects. With consulting, category management and operational procurement experience Ed has a unique perspective on implementing spend analysis


PROCUREMENT ON THE MOVE

We combine innovative technology and end-to-end services

to drive realized savings to your bottom line.

Who We Are and What We Do

Procurement

Software

End-to-End ServicesProcurement

Strategy

Support Services

Procure-to-Pay

(P2P)

Category

ManagementSourcing

Faster timeto value

Increased visibilityand control

Reducedoperating costs

Improvedcompliance

Superior customerservice

Mexico City

Costa Rica

Princeton, NJ

Clark, NJSão Paulo

London Prague MumbaiHyderabad

ShanghaiSingapore Sydney


PROCUREMENT ON THE MOVEWhat is spend analysis for?

• The aim of Spend Analysis is to provide intelligence:• Understanding of trends and patterns to support better

decision making

• Visibility of ongoing activity

• Through the provision of reports, charts, graphs etc…

• Distilling the raw material to extract “facts” “meaning” and “value”• The raw material is not always clean enough…


PROCUREMENT ON THE MOVEUniversal visibility of…what, exactly?

• “Garbage In – Garbage Out” means• Spend Analysis must be more than reporting

• Data must be organized to permit the distilled extracts to be trusted


PROCUREMENT ON THE MOVESpend Analysis in 4 steps:

Data Gathering

Bring together from multiple:• Sources• Formats• Languages• Currencies• Qualities



Data Gathering

Bring together from multiple:• Sources• Formats• Languages• Currencies• Qualities

Data Normalisation

Create a common view



Data Organisation

Categorization to a taxonomy that makes sense

Dat

a G

ath

erin

g

Dat

a N

orm

aliz

atio

n



Data Organisation Visibility

Easy to understandCan be trusted

Categorization to a taxonomy that makes sense

Dat

a G

ath

erin

g

Dat

a N

orm

aliz

atio

n


PROCUREMENT ON THE MOVEWhen you won’t need Spend Analysis

100% Accurate InputPerfect Master Data

Reports are 100% AccurateIntelligence can be trusted


PROCUREMENT ON THE MOVEWhen you won’t need Spend Analysis

All spend through one systemCatalog-only purchasesNo maverick buyingApproved suppliers only

Purchases through system = total spend


PROCUREMENT ON THE MOVEWhy you might need spend analysis

Stakeholders with different requirements

Complex systems landscape

Business units with freedom to operate:• Regionally• Politically• Strategically• Tactically

Non-Trivial Categorization

Group Taxonomy Regional Taxonomy

Sourcing Taxonomy

Human ErrorIncomplete Input

Unclear/Untrusted Output


PROCUREMENT ON THE MOVEHow to use Spend AnalysisD

ata

Gat

her

ing

Dat

a N

orm

aliz

atio

n

Dat

a O

rgan

izat

ion

Vis

ibili

ty

UnderstandingExpertiseEffortAction

This is all preparation… …for this


PROCUREMENT ON THE MOVESpend Analysis – Mining for Opportunities

• First use - Opportunities for Savings• Cost Reduction

• Demand aggregation

• Supplier rationalization

• SKU Reduction

• Price Variance Correction

• First evolution – Opportunities for Value• Improved cycle times

• Greater contract utilisation

• Greater compliance

• Increased “Spend Under Management”

= “Achievable Savings”


PROCUREMENT ON THE MOVE“Spend Under Management” to “Achievable Savings”

Increased spend under management

Possible savings

resulting from S.U.M.

Increased % of spend

compliant with

contracts

Savings possible through contract

compliance

Savings possible through strategic sourcing

Increased addressable

spend

Achievable Savings

ROI

Source: Aberdeen Group


PROCUREMENT ON THE MOVESome examples from our clients

• Company with $2Bn Annual Spend. • In the first year produced > $80M savings

• Company with $5Bn Annual Spend.• Identified >200 strategic sourcing opportunities leading to new contracts

in six months

• Company with over $50Bn Annual Spend.• Data from > 300 sources• Organized to 5 taxonomies

Data Gathering

Data Normalization

Data Organization

Visibility Insight


PROCUREMENT ON THE MOVEIncreasing “Spend Under Management”

Identify Opportunities

Run Sourcing Projects

Enable Results Through

Awarding Contracts

Deliver Results By Utilising Contracts

Analysis FrequencyData Refresh FrequencyOrganizational Cadence

Validation of Results

Contract = Savings/

The Update Frequency may be too low to help deliver savingsBy the time you can see the contract is under-utilised it may be too late


PROCUREMENT ON THE MOVESpend Analysis – A New Approach

• The “Opportunity to Contract Cycle” is still critical• The benefits are real, the savings can be immense

• BUT, some novel ways to look at the data (and interpret the intel) are yielding great results• Three examples:

Project ImpactContract

ComplianceMaster Data Management


PROCUREMENT ON THE MOVEMeasuring Project Impact

• Project activity is reflected in spend behaviour

• Purchasing patterns, supplier activity, unusual transactions• Can be detected and flagged through spend data

• Especially with a change in spend frequency

• There is a trade-off:• “Standard model” spend refresh for high accuracy and strategic

sourcing

• “Rapid refresh” for immediate visibility of behaviour


PROCUREMENT ON THE MOVEPerformance Metrics – Merger and Acquisition

Total Transactions 3 MillionExclusions 750,000Supply Managed 2.3 MillionAcquired Company 290,000Primary Company 2 Million

Total Spend 24 BillionEXCLUSIONS 13 BillionSUPPLY MANAGED 11 BillionAcquired Company 1.35 BillionPrimary Company 9.15 Billion

Supplier Normalization Primary Acquired Total

Raw supplier count 670,000 96,000 766,000

Normalized supplier count 267,000 38,000 305,000


PROCUREMENT ON THE MOVEPerformance Metrics – Merger and Acquisition

• Primary (Acquiring) Company: $8Bn Annual Spend, 2M Transactions

• Acquired Company: $1Bn Annual Spend, 350K Transactions

• Rapid Results:

• Merge historical spend data• Identify Opportunities (standard model spend analysis)• Identify immediate shared suppliers – leverage better contract terms• Assess tiered discount strategy – leverage new volumes• Immediate renegotiation where possible – low hanging fruit


PROCUREMENT ON THE MOVEProject Impact – Up-to-date Intelligence

• Reports and Dashboards: traditionally historical• With centralized reports and analysis teams

• More up-to-date mode (near to “real time”) enables:• Reduced reporting cycle time

• Close to real-time performance tracking

• Active monitor or negotiated vs realized savings

• Value product for the C-Suite – even the CEO!


PROCUREMENT ON THE MOVEImpact on Quality

• Spend analysis works better at higher accuracies – given

• Greater usage drives data accuracy

• Use of the “rapid refresh” near-real-time data improves usage

• All adds up to improved quality

• Real-time categorization feedback through the software drives systemic improvements in the AI!


PROCUREMENT ON THE MOVESpend analysis as part of a unified platform

• Real-time categorization

• Rapid Refresh

• Purchase-to-Invoice

plus

• Invoice Reconciliation

All lead to:

Identification of spend categories suitable for No PO/no Pay

Identification of non-PO invoices and rapid reconciliation

Auto-PO creation and approval routing (post facto)


PROCUREMENT ON THE MOVEContract Compliance

• When contract data and spend data meet…

…contract utilisation is revealed

• Add invoice price variance, order-to-deliver times and volume information…

…and you can reveal vendor compliance with the contract

• Utilisation + Compliance = Effective Contract = Achieved Savings


PROCUREMENT ON THE MOVEMaster Data Management

• Potentially each system has it’s own vendor records

• Duplications are a near-certainty

• Multiple non-identical copies are commonplace

• Spend analysis provides the means to create a master set• Whilst still maintaining the original location-specific identities


PROCUREMENT ON THE MOVEWhere does Spend Analysis go next?

• Increasing real-time data access• Increased real-time intelligence?

• More automated…• Data aggregation

• Normalization and categorization

• Opportunity identification

• Innovations are unpredictable• Too much automation may mean you miss what you

don’t know to look for

• Enhanced technology solutions will free up brains to drive value

© 2015, GEP. All Rights Reserved.

Ed Pyo – Senior Manager, [email protected]

GEP is a diverse, creative team of people passionate about procurement. We invest ourselves entirely in our client's success, creating strong collaborative relationships

that deliver extraordinary value year after year. We deliver practical, effective procurement services and procurement technology that enable procurement leaders to

maximize their impact on business operations, strategy and financial performance. Honored as Best Supplier at this year's EPIC Procurement Excellence Awards, GEP

regularly wins accolades as both a provider of a broad range of procurement services and innovative procurement technology. Among its recent distinctions, GEP has

been named Leader and Star Performer in Everest Group's Peak Matrix of Procurement Services Providers, Leader in NelsonHall's NEAT Matrix of Global Procurement

BPO Service Providers, Winner in the HfS Blueprint Report on Procurement Outsourcing Providers, as well as one of Spend Matters 50 Companies to Know and to the

Supply & Demand Chain Executive 100.

Clark, NJ-based GEP has 12 offices and operations centers in Europe, Asia and the Americas.

To learn more about our comprehensive range of consulting and outsourcing services, please visit www.gep.com. For more about

SMART by GEP, our cloud-native sourcing and procurement software platform, please visit www.smartbygep.com.

Access our free knowledge resources at http://www.gep.com/knowledge-bank

100 Walnut Avenue, Clark, NJ 07066 | P 732.382.6565 | [email protected] | www.gep.com

Clark, NJ | Princeton, NJ | London | Prague | Mumbai | Hyderabad | Shanghai | Mexico City | Costa Rica | São Paulo | Singapore | Sydney

Copyright © 2015 GEP. All rights reserved.

Paul Blake – Technology Marketing, [email protected]

Documents

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