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| Foreword | |
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| Preface | |
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| Acknowledgments | |
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| About the Authors | |
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| Web Added Value | |
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| Fundamentals of Spend Analysis | |
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| What Is Spend Analysis? | |
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| Basics | |
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| History of Spend Analysis | |
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| Specialist Vendors | |
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| Consolidation | |
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| Similarities/Differences between Spend Analysis and Data Warehousing | |
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| Characteristics of an Ideal Spend Analysis Application | |
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| Data Definition and Loading (DDL) | |
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| Data Cleansing, Structure, and Enrichment (DE) | |
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| Spend Data Analytics (SA) | |
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| Knowledgebase Management (KB) | |
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| Summary | |
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| References | |
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| Business Imperative and Return on Investment | |
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| Spend Leakage and Compliance Multiplier | |
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| Importance of Spend Analysis within Supply Management | |
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| Benefits to Businesses | |
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| Estimation of Spend Analysis Return on Investment | |
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| Savings Opportunity | |
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| Highly Decentralized Purchasing | |
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| Overview and Objectives | |
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| Methodology | |
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| Global Procurement Challenges | |
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| Methodology | |
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| Results | |
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| Merger Planning and Integration | |
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| Overview | |
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| Situation | |
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| Methodology | |
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| Conclusion | |
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| Summary | |
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| References | |
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| How to Implement a Successful Spend Analysis Program | |
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| Set Objectives | |
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| Lead from the Top | |
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| Establish a Focused Center of Excellence | |
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| Carefully Evaluate Choices | |
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| Commodity Classification | |
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| Data Enrichment | |
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| Take a Limited-Scope, Phased-Rollout Approach | |
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| Requirements Scoping | |
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| Multicube Approach | |
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| Data Scoping | |
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| Refresh Requirement | |
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| Know Your Data | |
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| Technology Should Support Business, Not Drive Business | |
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| Align the Team to Support the Organization | |
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| Increase Organizational Visibility | |
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| Measure Constantly, Report Frequently | |
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| Engage with Your Application Provider | |
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| Sample Project Plan | |
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| Procurement Transformation for an $8 Billion Agrochemical Business | |
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| Overview | |
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| Background | |
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| Implementation and Key Learning | |
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| Spend Analysis Program Success | |
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| Sourcing Program Success | |
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| The Future-Managing Supplier Relationships | |
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| A Fortune 500 Provider in the Healthcare Industry | |
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| Overview | |
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| Implementation | |
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| Challenges | |
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| Results after One Year | |
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| A Company with Global Procurement Locations | |
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| Overview | |
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| Implementation | |
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| User Adoption | |
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| Next Steps | |
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| Summary | |
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| References | |
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| Opportunity Identification | |
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| Spend-Level Opportunities | |
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| Supplier Rationalization | |
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| Demand Aggregation (or Disaggregation) | |
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| Bypass of the Preferred Purchasing Process | |
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| Non-PO Spend | |
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| Off-Contract Spend | |
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| Diversity Spend Compliance | |
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| Supplier Performance | |
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| Spend with Poorly Performing Suppliers | |
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| Approved versus Nonapproved Spend | |
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| Spend by Payment Type | |
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| Transaction-Level Opportunities | |
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| Contractual Term Opportunities | |
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| Unrealized Discounts and Rebates | |
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| Quantity Violations | |
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| Delivery Date Violations | |
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| Payment Term Opportunities | |
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| Invoice Processing Opportunities | |
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| Consolidated Payments | |
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| Frequent Charges and Credits | |
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| PO Approval Limits | |
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| Prioritizing Opportunities | |
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| Conduct Buyer Interviews | |
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| Create a Segmentation Framework | |
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| Segment the Categories | |
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| Assign Category to Implementation Waves | |
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| Summary | |
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| The Anatomy of Spend Transactions | |
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| Types of Spend | |
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| Direct | |
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| Indirect | |
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| MRO | |
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| Procurement Processes | |
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| Procure-to-Pay (P2P) | |
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| Purchasing Cards (P-Cards) | |
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| Travel and Entertainment (T&E) | |
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| Information and Approval Flow in P2P Processes | |
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| Data Requirements for P-Cards | |
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| Data Requirements for T&E | |
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| Source Systems and Data Extracts | |
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| Accounts Payable | |
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| Purchasing/e-Procurement | |
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| Receiving | |
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| Materials Management | |
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| Freight Transactions | |
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| Corporate P-Cards | |
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| Travel and Entertainment | |
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| Contract Management | |
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| Material Requirements Planning or Manufacturing Resource Planning Systems | |
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| Contract Manufacturer Data | |
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| Other (External Sources) | |
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| Quality of Data | |
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| Item Description | |
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| Vendor Name | |
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| Cost Center and GL Code | |
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| Summary | |
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| Spend Analysis Components | |
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| Introduction | |
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| Data Definition and Loading (DDL) | |
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| Data Cleansing | |
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| DDL Considerations | |
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| Data Assessment | |
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| Data Enrichment (DE) | |
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| Overview | |
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| Classification | |
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| Clustering | |
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| Business Rules and Manual Editing | |
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| Dimensional Enrichment | |
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| Classification | |
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| Clustering | |
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| Transactional Enrichment | |
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| Business Rules | |
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| Transactional Classification | |
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| Knowledge Acquisition and Management | |
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| Concepts | |
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| Attributes | |
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| Instances | |
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| Knowledgebase Essential Functionality | |
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| Browsing | |
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| Editing | |
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| Knowledge Assimilation | |
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| Spend Reporting and Analytics | |
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| Business Intelligence Key Capabilities | |
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| Reporting | |
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| Analytics | |
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| Scorecarding | |
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| Dashboards | |
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| Business Event Management | |
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| Basic OLAP Reports | |
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| Pivot Tables | |
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| Cross-tabular Reports | |
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| Graphical Reports | |
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| Specialized Charts | |
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| Waterfall Chart | |
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| Pareto Chart | |
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| Treemap | |
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| Multidimensional Report | |
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| Map Report | |
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| Ad Hoc Analytics | |
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| What-If Analysis | |
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| Dashboards | |
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| Summary | |
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| References | |
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| Taxonomy Considerations | |
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| Ontologies and Taxonomies | |
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| Popular Industry Standard Commodity Taxonomies | |
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| UNSPSC | |
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| Design | |
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| Advantages of UNSPSC | |
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| Disadvantages of UNSPSC | |
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| eOTD | |
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| Design | |
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| Advantages of eOTD | |
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| Disadvantages of eOTD | |
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| eCl@ss | |
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| Design | |
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| Advantages of eClass | |
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| Disadvantages of eClass | |
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| RUS | |
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| Design | |
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| Advantages of RUS | |
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| Disadvantages of RUS | |
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| Quantitative Comparison of Taxonomies | |
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| Size and Growth | |
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| Hierarchical Order and Balance of Content | |
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| Quality of Property Libraries | |
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| Conclusion and Summary | |
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| References | |
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| Technology Considerations | |
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| Technical Considerations in the SA Module | |
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| Online Analytic Processing (OLAP) | |
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| What Is Your OLAP Schema? | |
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| What Do Your Dimensions Look Like? | |
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| Precooked Data or On-the-Fly Calculations? | |
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| Continental or International Deployment? | |
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| Pivoting or Multidimensional Navigation? | |
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| Technical Considerations in the DDL Module | |
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| Representative Sampling | |
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| Missing Values | |
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| Balanced Dimensional Hierarchies | |
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| Detection of Systematic Errors | |
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| Technical Considerations in the DE Module | |
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| String Matching | |
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| Classification | |
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| Statistical Algorithms | |
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| Distance-Based Algorithms | |
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| Decision Tree-Based Algorithms | |
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| Neural Networks-Based Algorithms | |
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| Rule-Based Algorithms | |
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| Clustering | |
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| Classifier Evaluation | |
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| ROC Graph Details | |
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| Association Rules | |
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| Summary | |
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| References | |
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| Tracking and Monitoring | |
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| Introduction | |
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| Spend Under Management | |
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| Integrated Supply Management | |
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| External Integration Using Web Services | |
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| Using Spend Analysis for Measuring Benefits | |
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| Summary | |
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| Spend Analysis and Compliance | |
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| Introduction | |
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| Control Violations in the Procurement Process | |
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| Supplier Assessment | |
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| Supplier Selection | |
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| Contract | |
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| Procurement or Requisition | |
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| Fulfillment | |
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| Invoicing | |
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| Payment | |
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| Implementing Controls in Procurement | |
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| Commonly Implemented Controls | |
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| Payment Controls via 3-Way Match | |
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| Authorizations | |
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| P-Card Control | |
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| Travel and Entertainment | |
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| Spend Leakage | |
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| Contract Compliance | |
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| Vendor Compliance | |
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| Fraud | |
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| Case Study | |
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| The Future of Procurement Compliance | |
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| Measurement | |
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| Prevention | |
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| Summary | |
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| References | |
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| The Future of Spend Analysis | |
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| Supplier Discovery | |
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| Spend Forecasting | |
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| What-If Spend Analysis | |
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| Microanalysis | |
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| New Product Target Cost Analysis | |
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| Real-Time Classification | |
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| Relevance Search | |
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| Price Benchmarking | |
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| Summary | |
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| Index | |