Supplier Procurement Analytics solution powered by PMSquare assists procurement and finance departments lower costs. The solution provides detailed analytics to identify enterprise spend, transaction costs and how to better manage your suppliers

1.
Supplier
Procurement
Analytics
powered
by
PMSquare
Procurement organizations tend to swim in data. One of the most
important strategies for any best-in class procurement organization is
spend analytics. In conjunction with sourcing, category, contract
management and purchasing, spend analytics provides a window into
spend behavior to drive cost reduction and cost avoidance efforts.
As a result, many of our customers ask us about Procurement Analytics
projects. Chief Procurement Officers and other Sourcing/Procurement
leaders of Global, large and even mid-market firms are increasingly
focusing on spend analytics as part of a new wave of cost
rationalization projects.
The spend numbers are staggering. At a large multi-national industrial
firm with $55 Billion in revenue, the indirect spend is $9 Billion. The
opportunities for savings are tremendous.
PMSquare’s Procurement analytics solution can provide the visibility
and insight needed to improve procurement performance. Spend
management provides many cost reduction opportunities thru visibility

2.
into direct and indirect procurement, IT hardware, software, and
services, and logistics, transportation and inventory costs.
However, getting a 360 degree view of spend data is extremely
challenging in most organizations. A large part of this is due to the
number of fragmented solutions that contain expense information. In
one firm we are helping, there are 32 ERP instances that capture PO
transactions.
Another part is due to poorly implemented solutions where data as it
flows from transactions systems to BI dashboards via an extract,
cleanse, classify model is getting corrupted. Sometimes the
classification is wrong resulting in incorrect aggregates. As a result
there is limited trust in the numbers presented in the dashboard.
Poor quality of expense data coming from procurement and ERP
systems is a big problem.
Optimizing expense management is a key metric in world class
procurement and sourcing organizations. Specific questions that
Procurement Analytics solutions can help address include:

3.
Direct and Indirect Material Analysis
What materials has the procurement organization purchased last
year? In what volumes and for what prices? How has that
changed over time?
How many SKU’s do we carry on our material list? Has this
increased over time? Can we consolidate or substitute items to
maximize buying power?
What % of payments are duplicates?
How is the total landed cost of a material distributed across unit
cost, and other carry costs? Has this changed?
What types of requests (MRO, manufacturing job orders, MRP)
by volume have been processed? Do patterns reveal
opportunities for streamlining?
Are different demand channels ordering similar commodities?
Can we synchronize needs across channels or substitute
materials for consolidated buying?
Vendor and Supplier Analysis
What does our supplier landscape look like? How many vendors
have we purchased from this year? On average how much is
spent per vendor in a specific period?
How do vendors rank by volume and revenue spent? How has
that changed over time?
How many vendors do we have for a specific material or material
group? What percentage of the volume is sourced from a single
supplier?
How do prices compare across vendors for a specific material?
Has this changed?
How do vendors compare across payment and delivery terms,
quality of materials received, on time delivery, order and invoice
accuracy?
Process Analysis
How many transactions are performed for various stages in the
procurement cycle?

4.
How long does it take to move from one stage to the next in the
procurement cycle?
How do processing times relate to specific materials, vendors and
buyers?
What percentages of requisitions are declined? What are the
reasons for rejection?
How does this compare across commodities, and demand
channels?
Where are there opportunities for reducing non value added
activities?
Transaction Analysis
How many requisitions, contracts, and purchase orders are
processed across the organization by buyer? What is the average
value of each transaction?
How is each buyer’s activity distributed across vendors, materials
and demand channels? Should buyer responsibilities be
redistributed?
Is there an opportunity to consolidate transactions with a vendor
through one buyer?
Are there opportunities for consolidating the purchase of certain
materials with certain buyers?
Please
Contact
PMSquare
for
more
details
on
how
we
can
assist
Procurement
and
Finance
departments
curb
spending.
Kind
Regards
Rana
Rana
Banerji
PMSquare
Asia
Regional
Director
E:
rbanerji@pmsquare.asia