Data Content

Spend Matters welcomes this guest post from Sergii Dovgalenko, CPO at JSC Ukrainian Railway.

During these times of Industry 4.0, many companies have substantially progressed on the path toward digital transformation. Fellow procurement colleagues operate their new shiny source-to-contract suites, P2P and SRM tools. However, one critical aspect of digitalization sometimes remains forgotten or insufficiently addressed — data integration.

The procurement value chain spreads well beyond the S2C cycle — it starts from planning and goes all the way to supplier performance and risk management. Even if your chief architect is a genius, and managed to build the fully integrated digital pipeline of planning, budgeting, sourcing, contracting, material management, P2P and SRM modules, where tasks freely flow from one section to another, data integration may remain a challenge. This guest post examines the importance of understanding data integration.

Think about it. You create a document on your laptop – it’s got performance results, strategic positioning statements and an analysis of the biggest risks to your operation and you email it to the senior management. Now there are a dozen copies of that document on as many laptops. Your colleagues have their company email synced to smartphones and tablets and within moments those sensitive documents are replicated dozens of times on as many devices. Those individuals concerned with losing data will back it up to memory sticks. Before you know it, the data you spent millions on protecting has spread like a virus across half the devices in your company in a highly concentrated, easy-to-understand form. Any one of those devices could be lost, mislaid, stolen or otherwise compromised, and it is an awful lot easier to crack email on a smartphone than a corporate firewall.

Unlike many organizations that use spend analysis as a tool to drive supplier rationalization, FMC Technologies is not looking to reduce its supply base. Rather, their focus on building visibility into spending and supplier performance centers on standardizing and deepening relationships with their strategic suppliers worldwide. Some of the data points they leverage in this hybrid spend and performance analysis include quality, on-time delivery, open purchase orders (POs), forecasts and supplier risk information.

Good performance management approaches have to rest on good data – data that is indisputably referenced by business units, corporate leadership and suppliers alike. The spend analytics field has matured to the point where leading solutions can process complex data sets from a broad range of ERP solutions and provide consolidated dashboards and reports with drilldown to the lowest-detail levels within hours of designated close time. In contrast, SPM (supplier performance management) often involves manual work such as entering information in balanced scorecards, which obviously makes timely reports difficult.

It used to be that spend analysis was focused on helping category managers, consultants and others tasked with identifying and implementing savings opportunities. Fast-forward ten years to today, and spend analysis has been put in a whole new context-- namely, as a tool to bridge the analytics gap between supply chain operations and the business.

To drive change and improvements, it is critical that internal stakeholders and suppliers rally around good data based on a uniform set of definitions. The […]

KPMG’s 2013 Global Manufacturing Outlook features a diagram that immediately caught my attention when I saw it. It shows the variance of how large (companies […]

At Ariba LIVE last week, Ariba shared the latest about its joint efforts with SAP in spend analysis. We previously covered some of the platform […]

Discussing the future of procurement and spend analytics is one of the most exciting topics we think about these days. But it’s important to trace […]

We’re excited to begin a new series exploring the future of how we are likely to work with and navigate procurement data through new interfaces, […]

Since one of the key challenges in managing a mixed application environment is the integration costs, you can reduce them by minimizing the transactional volumes crossing these systems, while allowing less voluminous process to cross application boundaries. For example, transactional purchasing and AP systems – especially when direct materials are involved (that are received into inventory) – are certainly better supported through a common system. Processes like strategic sourcing (excluding high-volume Bill-of-Material based sourcing) and strategic supplier management have much lower workflow volumes, and allow more flexibility in using a best-of-breed vendor (i.e. eSourcing).

FusionOps has cleverly worked its way around the traditional approach by setting their connector up on a workstation as an approved ERP user. They then tunnel the data back to their secure datacenter (SAS 70 Type 2 audited) where it is refreshed per contracted rate (e.g. every 5 minutes or so, many times per day) and made available over the FusionOps cloud solution. FusionOps then takes the client data and creates a plethora of best practice (per FusionOps’ ongoing market feedback) supply chain dashboards and reports based on the data set – hundreds of them – allowing clients to manipulate the data to their heart’s content. Ad hoc report building is also available in the solution. Self-service is at the heart of the solution.