leveraging data for innovative procurement analytics · leveraging data for innovative procurement...

Leveraging Data for Innovative

Procurement Analytics

BravoSolution

Kristian O'MearaSVP, Value Engineering

Michael SheheeGlobal Head of Sourcing & eCommerce

sig.org/summit

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Leveraging Data for Innovative


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


Agenda

Goals & Objectives

Challenges & Questions

Benefits & Examples

Today vs. Future


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


The Procurement Whispers


2016 CPO Agenda


Goals & Objectives


Benefits & Examples

Today vs. Future


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?


Analytics Methodology


How To?


Goals & Objectives


Benefits & Examples

Today vs. Future


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


Harmonized Analytics Examples

Traditional vs. Non-Traditional

Projects & Contracts


2X2 reveals a segmented attack strategy –Value Creation combined with Aggressive Sourcing and SVM

Segmentation Example


Analytics: 360 Report - Usage


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

18© All Rights Reserved - Confidential©ALL RIGHTS RESERVED -

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




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




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

BRAVOSOLUTION - Confidential 21Today vs. Future


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

BRAVOSOLUTION - Confidential 23

Questions?

BRAVOSOLUTION - Confidential 24

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