Оглавление
Foreword ............................................................................................................xiiiPreface ..................................................................................................................xv
Acknowledgments ............................................................................................xvii
About the Authors ..............................................................................................xix
Web Added Value™ ............................................................................................xxi
PA RT I
Chapter 1. Fundamentals of Spend Analysis ......................................................3
What Is Spend Analysis? ..........................................................................................5
Basics ..................................................................................................................5
History of Spend Analysis ......................................................................................10
Specialist Vendors ............................................................................................11
Consolidation ..................................................................................................12
Similarities/Differences between Spend Analysis and Data Warehousing ..........12
Characteristics of an Ideal Spend Analysis Application ......................................15
Data Definition and Loading (DDL) ............................................................15
Data Cleansing, Structure, and Enrichment (DE) ........................................17
Spend Data Analytics (SA)..............................................................................19
Knowledgebase Management (KB) ................................................................20
Summary ................................................................................................................22
References ................................................................................................................22
Chapter 2. Business Imperative and Return on Investment ............................23
Spend Leakage and Compliance Multiplier ..........................................................23
Importance of Spend Analysis within Supply Management ........................25
Benefits to Businesses ............................................................................................26
Estimation of Spend Analysis Return on Investment ..........................................27
Savings Opportunity ......................................................................................30
Case Study 1—Highly Decentralized Purchasing ................................................30
Overview and Objectives ................................................................................30
Methodology ....................................................................................................31
Case Study 2—Global Procurement Challenges ..................................................31
Methodology ....................................................................................................34
Results ..............................................................................................................35
Case Study 3—Merger Planning and Integration ................................................39
Overview ..........................................................................................................39
Situation ..........................................................................................................40
Methodology ....................................................................................................40
Conclusion ......................................................................................................43
Summary ................................................................................................................44
References ................................................................................................................45
Chapter 3. How to Implement a Successful Spend Analysis Program ............47
Set Objectives ..........................................................................................................48
Lead from the Top ..................................................................................................48
Establish a Focused Center of Excellence ..............................................................49
Carefully Evaluate Choices ....................................................................................50
Commodity Classification ..............................................................................50
Data Enrichment ............................................................................................50
Take a Limited-Scope, Phased-Rollout Approach ................................................50
Requirements Scoping ....................................................................................50
Multicube Approach........................................................................................51
Data Scoping ....................................................................................................52
Refresh Requirement ......................................................................................52
Know Your Data......................................................................................................53
Technology Should Support Business, Not Drive Business ................................53
Align the Team to Support the Organization ......................................................54
Increase Organizational Visibility ..........................................................................54
Measure Constantly, Report Frequently ................................................................54
Engage with Your Application Provider ................................................................55
Sample Project Plan ................................................................................................55
Case Study 1—Procurement Transformation for an $8 Billion Agrochemical Business..................................................................................55
Overview ..........................................................................................................55
Background ......................................................................................................57
Implementation and Key Learning ................................................................57
Spend Analysis Program Success ....................................................................58
Sourcing Program Success ..............................................................................58
The Future—Managing Supplier Relationships ............................................59
Case Study 2—A Fortune 500 Provider in the Healthcare Industry ..................59
Overview ..........................................................................................................59
Implementation ..............................................................................................60
Challenges ........................................................................................................60
Results after One Year......................................................................................61
Case Study 3—A Company with Global Procurement Locations ......................61
Overview ..........................................................................................................61
Implementation ..............................................................................................62
User Adoption..................................................................................................62
Next Steps ........................................................................................................62
Summary ................................................................................................................62
References ................................................................................................................63
Chapter 4. Opportunity Identification ..............................................................65
Spend-Level Opportunities ....................................................................................67
Supplier Rationalization..................................................................................67
Demand Aggregation (or Disaggregation) ....................................................67
Bypass of the Preferred Purchasing Process ..................................................69
Non-PO Spend..........................................................................................69
Off-Contract Spend ..................................................................................69
Diversity Spend Compliance ..........................................................................70
Supplier Performance ......................................................................................70
Spend with Poorly Performing Suppliers ................................................71
Approved versus Nonapproved Spend ....................................................71
Spend by Payment Type ..........................................................................72
Transaction-Level Opportunities ..........................................................................72
Contractual Term Opportunities....................................................................72
Unrealized Discounts and Rebates ..........................................................73
Quantity Violations ..................................................................................74
Delivery Date Violations ..........................................................................76
Payment Term Opportunities ........................................................................76
Invoice Processing Opportunities ..................................................................77
Consolidated Payments ............................................................................77Frequent Charges and Credits..................................................................77
PO Approval Limits ..................................................................................78
Prioritizing Opportunities ....................................................................................79
Step 1—Conduct Buyer Interviews ................................................................79
Step 2—Create a Segmentation Framework ..................................................80
Step 3—Segment the Categories ....................................................................80
Step 4—Assign Category to Implementation Waves ....................................80
Summary ................................................................................................................81
PA RT I I
Chapter 5. The Anatomy of Spend Transactions ..............................................85
Types of Spend ........................................................................................................85
Direct ................................................................................................................85
Indirect ............................................................................................................86
MRO ................................................................................................................87
Procurement Processes ..........................................................................................88
Procure-to-Pay (P2P) ......................................................................................88
Purchasing Cards (P-Cards)............................................................................88
Travel and Entertainment (T&E) ..................................................................88
Information and Approval Flow in P2P Processes ..............................................89
Data Requirements for P-Cards ............................................................................93
Data Requirements for T&E ..................................................................................93
Source Systems and Data Extracts ........................................................................94
Accounts Payable ............................................................................................94
Purchasing/e-Procurement ............................................................................94
Receiving ..........................................................................................................95
Materials Management ....................................................................................95
Freight Transactions ........................................................................................95
Corporate P-Cards ..........................................................................................96
Travel and Entertainment ..............................................................................96
Contract Management ....................................................................................96
Material Requirements Planning or Manufacturing
Resource Planning Systems ......................................................................96
Contract Manufacturer Data ..........................................................................96
Other (External Sources) ................................................................................96
Quality of Data ......................................................................................................97
Item Description..............................................................................................98
Vendor Name ..................................................................................................99
Cost Center and GL Code ..............................................................................99
Summary ..............................................................................................................100
Chapter 6. Spend Analysis Components ..........................................................101
Introduction ..........................................................................................................101
Data Definition and Loading (DDL) ..................................................................103
Data Cleansing ..............................................................................................105
DDL Considerations......................................................................................107
Data Assessment ............................................................................................108
Data Enrichment (DE) ........................................................................................110
Overview ........................................................................................................110
Classification ..................................................................................................115
Clustering ......................................................................................................116
Business Rules and Manual Editing..............................................................116
Dimensional Enrichment ..............................................................................116
Classification ..........................................................................................119
Clustering ................................................................................................120
Transactional Enrichment ............................................................................120
Business Rules ........................................................................................120
Transactional Classification....................................................................123
Knowledge Acquisition and Management ..........................................................125
Concepts ........................................................................................................126
Attributes........................................................................................................127
Instances ........................................................................................................127
Knowledgebase Essential Functionality........................................................127
Browsing ..................................................................................................127
Editing ....................................................................................................128
Knowledge Assimilation ........................................................................128
Spend Reporting and Analytics............................................................................129
Business Intelligence Key Capabilities ..........................................................131
Reporting ................................................................................................131
Analytics ..................................................................................................131
Scorecarding ............................................................................................132
Dashboards..............................................................................................132
Business Event Management ..................................................................132
Basic OLAP Reports ......................................................................................133
Pivot Tables..............................................................................................133
Cross-tabular Reports ............................................................................133
Graphical Reports ..................................................................................135
Specialized Charts..........................................................................................141
Waterfall Chart........................................................................................141
Pareto Chart ............................................................................................142
Treemap ..................................................................................................142
Multidimensional Report ......................................................................144
Map Report ............................................................................................144
Ad Hoc Analytics ..........................................................................................144
What-If Analysis ............................................................................................147
Dashboards ....................................................................................................148
Summary ..............................................................................................................148
References ..............................................................................................................150
Chapter 7. Taxonomy Considerations ..............................................................151
Ontologies and Taxonomies ................................................................................151
Popular Industry Standard Commodity Taxonomies ........................................153
UNSPSC ................................................................................................................154
Design ............................................................................................................154
Advantages of UNSPSC ................................................................................155
Disadvantages of UNSPSC............................................................................156
eOTD ....................................................................................................................157
Design ............................................................................................................157
Advantages of eOTD ....................................................................................165
Disadvantages of eOTD ................................................................................166
eCl@ss ....................................................................................................................166
Design ............................................................................................................166
Advantages of eClass ....................................................................................168
Disadvantages of eClass ................................................................................169
RUS ........................................................................................................................170
Design ............................................................................................................171
Advantages of RUS ........................................................................................172
Disadvantages of RUS ..................................................................................173
Quantitative Comparison of Taxonomies ..........................................................173
Size and Growth ............................................................................................174
Hierarchical Order and Balance of Content ................................................175
Quality of Property Libraries........................................................................175
Conclusion and Summary....................................................................................177
References ..............................................................................................................178
Chapter 8. Technology Considerations ............................................................179
Technical Considerations in the SA Module ......................................................179
Online Analytic Processing (OLAP) ............................................................179
What Is Your OLAP Schema?........................................................................180
What Do Your Dimensions Look Like? ........................................................181
Precooked Data or On-the-Fly Calculations? ..............................................182
Continental or International Deployment? ................................................182
Pivoting or Multidimensional Navigation? ..................................................183
Technical Considerations in the DDL Module ..................................................184
Representative Sampling ..............................................................................185
Missing Values................................................................................................185
Balanced Dimensional Hierarchies ..............................................................187
Detection of Systematic Errors ....................................................................189
Technical Considerations in the DE Module ......................................................190
String Matching ............................................................................................190
Classification ..................................................................................................191
Statistical Algorithms..............................................................................193
Distance-Based Algorithms ....................................................................194
Decision Tree-Based Algorithms............................................................194
Neural Networks-Based Algorithms ......................................................195
Rule-Based Algorithms ..........................................................................196
Clustering ......................................................................................................196
Classifier Evaluation ......................................................................................198
ROC Graph Details ................................................................................200
Association Rules ..........................................................................................201
Summary ..............................................................................................................203
References ..............................................................................................................203
PART III
Chapter 9. Tracking and Monitoring ..............................................................209
Introduction ..........................................................................................................209
Spend Under Management ..................................................................................212
Integrated Supply Management....................................................................212
External Integration Using Web Services ....................................................214
Using Spend Analysis for Measuring Benefits ....................................................214
Summary ..............................................................................................................217
Chapter 10. Spend Analysis and Compliance ..................................................219
Introduction ..........................................................................................................219
Control Violations in the Procurement Process ................................................220
Supplier Assessment ......................................................................................220
Supplier Selection ..........................................................................................221
Contract ........................................................................................................221
Procurement or Requisition..........................................................................222
Fulfillment......................................................................................................222
Invoicing ........................................................................................................222
Payment..........................................................................................................222
Implementing Controls in Procurement ............................................................222
Commonly Implemented Controls ..............................................................222
Payment Controls via 3-Way Match ......................................................224
Authorizations ........................................................................................224
P-Card Control........................................................................................224
Travel and Entertainment ......................................................................224
Spend Leakage ......................................................................................................225
Contract Compliance ....................................................................................225
Vendor Compliance ......................................................................................226
Fraud ..............................................................................................................226
Case Study ............................................................................................................227
The Future of Procurement Compliance ............................................................228
Measurement ................................................................................................228
Prevention ......................................................................................................228
Summary ..............................................................................................................229
References ..............................................................................................................229
Chapter 11. The Future of Spend Analysis ......................................................231
Supplier Discovery ................................................................................................232
Spend Forecasting ................................................................................................232
What-If Spend Analysis ........................................................................................232
Microanalysis ........................................................................................................233
New Product Target Cost Analysis ......................................................................233
Real-Time Classification ......................................................................................233
Relevance Search ..................................................................................................234
Price Benchmarking ............................................................................................235
Summary ..............................................................................................................235
Index ..................................................................................................................237