Spend Analysis
Challenge
In these times of economic uncertainty every organization’s chief procurement officer is continually striving to increase savings opportunities, reducing cost and limit supplier risk. It has become imperative to be able to classify these saving and cost-reducing opportunities as well as providing insights into operational risk or compliance to the Procure-to-Pay process. For Example, in a Global Telco organization, the procurement process across multiple operating companies, with a multitude of material categories and numerous suppliers, the volume of Purchase Orders, Invoices and Contract information generated is immense. The procurement functions require to analyze the spend data in order to be able to deliver the above business values, especially because a large number of operating companies are procuring from a similarly large number of suppliers, and supplier relationships can often be renegotiated to take advantage of their huge buying power. The procurement managers want to be able to liaise with their technology and finance counterparts to understand an operating company’s pipeline of projects by material category, supplier etc., the budget allocated by the operating company and top-down forecasts built from previous years spend patterns as well as knowing the current actuals. The procurement managers want to get an insight to the supply chain and gain visibility of where and what the business is planning to spend. A spend analysis solution may not sound like a typical big-data solution, but information at the line item level for Purchase Orders, Invoices and Contracts can involve millions of records, especially when a company is dealing with multiple currencies, supplier and material hierarchies and reference data. In addition, because of the complexities of reporting requirements and exclusions, report performance can degrade even with just moderate data volumes. A good spend analysis solution requires up-to-date and speed to aid the corporate reporting and decision making processes. The need for mobile solutions to measure spend exacerbates this problem, because response times on devices like the iPad is much more critical. Business users do not have the desire to wait for minutes for information to be returned.
Solution:
SAP BusinessObjects Spend Performance Management (SPM) has a rapid deployment model and front-end tool, which has an easy and intuitive nature, is geared to assist the procurement process to identify savings and cost-reducing opportunities. SPM runs on the SAP NetWeaver BW platform and this can either be installed, or migrated onto the SAP HANA platform – giving instant response times even with complex selections. Because SAP HANA operates as the database for BW, no business change or configuration change is required – it just works.
AMI Benefits::
Budget, Forecast and Actuals spend data can be analyzed in real-time in order to identify areas for saving or possible constraints in the supply chain, so when a PO or Invoice is raised, possibly against a contract, the current position can be reported immediately.
In addition, mobile reports are readily made available with excellent response times – allowing managers to make decisions about spend on the move.
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