spendmatters
 

February 07, 2012

 

New Case Study: Pharmaceutical Company Drives Savings from Accurate Supplier Data

Like most large firms that have grown by acquisition -- and hardly any haven't -- the supplier data floating around inside the organization reminds me of Samuel Johnson's quip about lies and the infernal side of statistics in that there is old data, missing data, or simply too much data. How would you answer these vendor-related questions?

  • Are your records current, do you have all the important facts, have you managed to sift through the numerous redundant data points that are continuously being collected?
  • Are you paying the right vendor, only once per PO, using the right payment terms -- without running afoul of internal compliance, IRS or other regulations?

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Commodity Edge Conference

Spend Matters Procurement Predictions: Five Scenarios For the Next Decade (Part 5 – B)

See previous posts in this series here:
Part 1
Part 2
Part 3
Part 4-A
Part 4-B
5-A

To bring scenario four alive, let's consider two examples of how Global Supply Chain Intelligence [will] Dictate Winners and Losers in the next procurement decade. Beginning with supply chain risk, it does not take much imagination to consider the impact on suppliers and supply availability of a hypothetical natural disaster in Asia later in 2013 combined with demand uncertainty in the EU. Under this example, with reduced commitments to suppliers from smaller order volumes in Europe -- which may cascade and create working capital challenges for smaller, sub-tier suppliers -- combined with the temporary shut-down of facilities from potential weather/earthquake related damage and power outages, the potential for supply disruptions much larger than the type we've faced from hard-drive shortages owing to the flooding in Thailand in 2011 becomes abundantly clear.

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Spend Matters Procurement Predictions: Five Scenarios For the Next Decade (Part 5-A)

See previous posts in this series here:
Part 1
Part 2
Part 3
Part 4-A
Part 4-B

The fourth scenario in our procurement predictions for the next decade focuses entirely on the central nervous system of procurement and the ability of organizations not only to sense what is going on around them ahead of others -- and the market -- but to also respond accordingly. Specifically, we have titled this scenario: Global Supply Chain Intelligence Dictates Winners and Losers. Supporting the assertion that supply chain intelligence will triumph über alles, our belief is that 2012 (and beyond) will mark a continuation of the volatility we've seen in the broader economic, commodity, geographic and political landscapes. For example, if we add up just some of the factors comprising supply chain risk that have increased dramatically in recent years (e.g., financial, labor, product/material compliance, CSR practices and natural disaster/weather) it becomes abundantly clear how important successfully sensing and responding to distributed intelligence across the globe will become for procurement organizations.

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D&B Direct: A New Model for Consuming D&B Supply Management Data (Part 2)

Please click here for the first post in this series.

D&B's new D&B Direct offering (which packages D&B content and makes it available to consume via API in packaged software applications or via other web applications) required the content provider to reexamine its pricing models given the real-time access to current data that the offering provides. D&B's Supply Management API pricing is based largely on four different characteristics: the number of users transaction with the system, bundled & term discounts, number of calls per year and any premium or additional add-on services/content tied to the contract. Pricing ultimately ties back to the number of hits or calls to the D&B data which also, of course, ties to the number of users based on tiers (e.g., 1-10, 11-50, 51-100, 101-200, 201-500, 501-1000, >1000+).

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D&B Direct: A New Model for Consuming D&B Supply Management Data (Part 1)

Early this winter, we had the chance to catch up with the D&B team to learn about their D&B Direct announcement from this fall. D&B Direct is not a new content offering for D&B. Rather, it provides a new means of consuming D&B data directly through non-D&B systems, including a broad range of sales and marketing (inclusive of CRM), procurement, ERP, HCM and related systems. D&B positions D&B Direct as yet another step in D&B's ability to "seamlessly integrate" data inside corporate applications. Yet, in reality, the potential power available to companies through real-time calls into data like D&B's far transcends a basic real-time integration use case.

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Spend Analysis: The Definitive Book on Next Level Performance

Even though Michael Lamoureux (Sourcing Innovation) and I love to quibble (and as some folks know, escalate our rhetoric from time to time) I have to lavish unrestricted praise on a new book he just co-authored: Spend Visibility: An Implementation Guide. Authored by Michael and Lexington Analytics' Bernard Gunther, the book, available for free via the previous link, provides the most comprehensive look at basic and advanced spend analysis applications and cubes I've seen anywhere. Yes, it's biased toward the application of certain types of tools that enable the simple creation of multiple cubes with highly diverse datasets. But in more advanced spend analysis scenarios, this certainly goes with the territory. And the book steers completely clear of mentioning specific technologies or vendors.

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Friday Rant: Why Spend Analysis is Broken and How we Can Fix It -- Forecasting and Beyond

I took a quick 24-hour swing to the Bay Area this week, cramming in four separate meetings with a number of old and new faces alike. In one of these meetings, I had the chance to drill into a relatively new spend analysis application in the market. The vendor in question asked me what I thought about the tool and what I'd do to improve it. Of course the usual things came to mind, but in the demonstration, the product manager used the word "forecasting" numerous times. And then it struck me. Why are spend analysis tools only rear-facing? What if we could actually incorporate elements of forecasting -- with varying confidence levels, ranges, etc. -- factoring in what spend might do versus simply gaining a rear-facing snapshot? For example, if we know spend is off contract or will soon be off contract and we know recent buying activity, why can't we forecast what the potential cost to the organization will be as a result?

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A P2P Vendor Crosses the Analytics Line: Coupa Ventures Into Spend Analysis (Part 3)

In the first two posts in this series (which you can read here and here), we offered up a first look into The Coupa Spend Optimizer product, a new spend analysis solution that is actually much broader -- but in places not as deep -- as other spend analysis offerings in the market today. These posts contain numerous screen shots of the product in addition to a couple of new additional screen grabs at the end of this post. In this final post looking at Coupa's new spend analytics solution, we'll include our analysis and recommendations for Coupa customers/prospects and competitors/partners:

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A P2P Vendor Crosses the Analytics Line: Coupa Ventures Into Spend Analysis (Part 2)

Please click here for the first post in this series.

When users log-on to Coupa's Spend Optimizer solution, they are greeted with a welcome screen that allows them to quickly navigate to different reports and activity-specific dashboards. What immediately stands out about Coupa Spend Optimizer is how the solution is tightly integrated with Coupa's P2P capability. Popular reports not only show purchase price trending, on/off contract spend and related reports, but also trending details and insights focused on the actual P2P approval process, including average approval times, number of orders and recent spending. Users can also opt to analyze new data "mashups" -- an actual tab! -- that can combine both internal and third-party enrichment data to provide an even deeper view into spending insights. Coupa shared with Spend Matters that this type of mashup information might include supplier demographic data, market data (e.g., index information), commodity rebate information, pricing data and general market trending information.

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A P2P Vendor Crosses the Analytics Line: Coupa Ventures Into Spend Analysis (Part 1)

Earlier this week, Coupa announced it was entering the spend analytics market with its Spend Optimizer product. Coupa is positioning the solution as delivering "intelligence for everyone" from procurement to finance to line of business managers. At this stage, we can't yet recommend the product as a replacement for companies that value the ability of the most sophisticated spend analysis tools. Yet the Coupa approach appears purpose-built for the spend analytics masses rather than power users. Its interface is certainly among the best we've seen in the market for basic spend reporting (see screen grabs below). Coupa is aware of this and told Spend Matters that it is not their intent to "compete against heavy-duty spend intelligence tools." Still, Coupa's approach might be more successful, gaining traction faster than other toolsets, which deliver more capability but with far greater complexity and less pizzazz. In a series of posts looking at the Coupa Spend Optimizer solution, we'll highlight strengths and weaknesses in detail, as well as provide some context for what the release of this new solution means for the competitive spend analysis marketplace.

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