Oracle’s Value Chain Summit: From Spend Analytics to Spend Planning

- February 7, 2013 9:22 AM
Categories: Commentary | Tags: , , ,

In the past few years, Oracle has been aggressively making up the customer momentum that it lacked in the basic spend analytics area, including spend classification, until it introduced a product that was relatively late to the game compared with specialist procurement providers. Even though we believe that the real differentiation that Oracle will drive within spend analytics will come from its Oracle Endeca Information Discovery solution (showcased on the main stage at the start of its Value Chain Summit Event) by combining procurement analytics, spend data, quality information and related areas together, Oracle’s BI-driven approach to analytics isn’t exactly shabby today – and stacks up well in terms of configurable reporting.

Out of the box, Oracle Procurement and Spend Analytics features 350 metrics/KPIs that users can choose from to embed in their drillable spend dashboards (think of the toolset as a configurator). These include standard PPV type fields as well as more advanced metrics that link spend analytics to budgets, payable leakage rates, contract coverage not to mention hundreds of others. Some of the metrics go beyond procurement, bridging supply chain and finance (e.g., AP) as well by leveraging additional underlying internal systems data, yet they require (unlike Endeca) structured data fields to map to queries and presented fields.

Users of all Oracle (let alone other) applications can use Oracle’s BI approach to spend analysis. Yet the focus of the toolset is not just on pretty cross-suite (e.g., E-Business Suite Advanced Procurement, PeopleSoft Supplier Relationship Management and Oracle Fusion Procurement) dashboards. Rather, it’s also about the plumbing to get data into the analytics toolset in the first place. Here, Oracle is taking advantage of its Golden Gate acquisition for faster ETL-based integration in cases where typically batch updates (e.g., nightly, weekly, monthly) are not sufficient.

Ultimately, we believe this type of data currency will become even more important in a procurement analytics world where an Oracle Endeca Information Discovery front-end is combining structured and unstructured information from internal and external sources in a type of mission control for spend, sourcing, supplier, risk, budgeting and financial procurement management. But looking ahead on a more current product roadmap level, Oracle has more up its procurement analytics sleeve in the short-term.

This includes a new (separate license) Oracle Spend Planning application that will, in Oracle’s words, enable procurement teams to forecast indirect spend and use packaged what-if modeling tools to model and predict demand. The concept here is that it will help procurement teams to make better resource, budget and supplier allocation decisions (e.g., prioritizing sourcing/contract exercises). The Oracle Spend Planning solution will also feature integration into Oracle ERP business rules to drive planning based on real-world constraints (using what we believe is likely to be a solver supporting the scenario-based analysis). Oracle Spend Planning will also leverage the existing Oracle Procurement and Spend Analytics data model

Stay tuned as we continue to report from Oracle’s Value Chain Summit and double-click on Oracle procurement solutions in more detail in our coverage for Spend Matters PRO members.

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