Spend Matters 50/50: Sievo – A Provider to Watch
There’s only a handful of technology providers that come along each year that can change the measurement, financial, and process orientation of something as large as a procurement function. But Sievo, whom we included in the Spend Matters 50/50 “watch” list (see Providers to Watch and Providers to Know), is one of the few.
We’ve gone into detail exploring Sievo a number of times already. We even added them to our “Five Specialist Vendors You Must Talk to in 2013” – sort of a predecessor to the Provider to Watch list. In our view, while Sievo is still small and has very little presence in North America, it is one of the most important providers in bringing finance and procurement together.
As we’ve noted before, Sievo doesn’t only accelerate savings implementation initiatives and objectives through a program management platform and cockpit to oversee the execution side of sourcing and related programs. Their capabilities can also reduce savings leakage by pinpointing and documenting specific areas where lost savings occurred based on existing initiatives or a planned savings pipeline rollout.
What does Sievo combine to make this happen? There’s a surprising number of elements:
- A core direct materials-focused spend analysis-like platform that extracts data out of source systems like SAP, normalizes it, and tracks information on the item or part level
- Targeted ERP integration capability to push/pull information and create a new source of master data (as required) as well as the ability to incorporate qualitative information (think “softer” supplier performance management-type KPIs for the procurement organization itself)
- Using this granularity of source-system data to enable savings tracking as different individuals need to see it to gauge performance (i.e., a way to identify and measure all of the components that lead to an actual price paid, using information like volume data, commodity market information, payment conditions/terms, exchange rates, order quantities, and specifications)
- Incorporating market indexes, rebate structures, baselines, currency rates, cost structures, dimensionality, target costing/pricing, budgets, and forecasts in this analysis
- Reporting capability to define and view specific savings tracking mechanisms and fields including price, market/commodity/index fluctuation, currency fluctuation, substitution, batch size, spend reduction, external, and realized on an aggregate and reported level (along with proactive alerts)
- Quickly viewing reports and drilling into a dashboard considering basic spend analysis metrics plus broader profitability, payment terms, compliance inventory, budgeting and forecasting and the like
- Exporting and copying information into documents, presentations, etc.
Sievo is a fascinating company. The fact the provider is waiting to be discovered by so many companies suggests that the market for procurement technology vendor identification and discovery is still imperfect.
We hope that by putting them on our 50/50 list, more companies will discover just how revolutionary the Sievo approach is to managing procurement savings and performance to drive both P&L and balance sheet impact in the eyes of finance and shareholders.