Early last week, an industry colleague from Zycus pinged me with permission to talk about one of their recent spend data management implementations at Orkla, an eight billion dollar Norwegian conglomerate. Orkla is using Zycus to consolidate spending data from a range of European countries. Specifically, they are pulling information in 14 languages into a central repository which is using an UNSPSC-based classification system. You can read more for yourself about the implementation from an internal Orkla newsletter if you're interested. Inside Orkla, the project is referred to as the SMART program, which stands for "Spend Management Analysis & Reporting Tool".
Even though I'm getting more and more pitches from PR firms and communications managers at different vendors -- by all means, keep them coming! -- what captured my attention most about this story was the level of executive sponsorship at Orkla for the program. Apparently, Orkla's CEO, Dag Opdeal, attended the internal launch party for the spend analysis application. Now that's a level of executive enthusiasm that one does not usually see for any type of software application. But given the potential of even basic spend analytics and visibility tools to drive tens of hundred of millions of dollars in savings opportunities for companies, perhaps we'll see more of this type of commitment in the future from other companies.
While the implementation sounds very tactical today, Orkla is certainly visionary when they think about what they could do with the type of consolidated data and analysis capabilities in the future. According to the above-linked newsletter, Orkla intends "in the long run ... to be able to make use of the tool in areas such as acquisitions, product development, quality control and perhaps even more fields." Like Orkla, I suspect that we will see more companies extend their spend visibility implementations to consider such areas as supplier quality, performance, and risk in the coming years. These areas are a natural extension for an application area which up until now, has largely been used by companies to drive better sourcing decisions. But better sourcing is only one of many potential benefits companies can realize from rolling out spend visibility and analytical capabilities to their procurement organization, even today. If you want to learn more, you can read some of my previous thoughts on the subject here and here. Without question, spend visibility and analytics is an area I'm really fired up about. I can almost see myself getting red in the face and pulling a Cramer, reaching for the raging bull sound on my keyboard when I think about the potential of the category.