Data and Analytics: What Your Data Is Telling You and Why It's Worth Listening

Data and Analytics:
What Your Data Is Telling You and
Why It's Worth Listening
Clément Celier, SAP Ariba / October 26, 2016

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public
Living in a digital economy
Last two years
90%
Of the world’s data has
been generated
Last two years
40%
Growth in adoption of
business networks
Since 2014
>50%
Of workloads processed
in the cloud
Science Daily Ardent Partners
212 bn
End of 2020
“Things” will be connected
IDC.
By 2020
9 bn
Mobile users in the world
Statista
Cisco Systems Inc.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public 3
Unprecedented explosion of data
“… high-volume, high-
velocity and high-
variety information
assets that demand
cost-effective,
innovative forms of
information processing
for enhanced insight and
decision making.”
Size of total data
Enterprise-managed data
Enterprise-created data
2020: More than one-third of
the data produced will live in
or pass through the cloud

From big to smart
Volume
Velocity
Variety
Value ?Three Vs of Big Data

Infinite opportunities for first movers
Impact on profitability
Market valuation
Early adopters
are winning!
In the next 10 years, 40% of the S&P 500 will no longer exist if they do not
keep up with these technology trends.
CapGemini and MIT Sloan
Revenue creation
9%+
26%+
12%+

Impacts the way smart businesses run
From process driven
to data driven
 Data as a means of
growth
 Opportunity and risks
spotted quickly
 Hypothesis over
assumption
 Decisions based on
analytics
 Constant
experimentation
Business value
Data
Real time
Foresight
Prescriptive
Process
Batch
Hindsight
Descriptive
Yesterday Today
Intermediation, push,
products, mass market
Disintermediation, pull, service and
usage and experience, segment of one
PROCESS
PATTERN
Analytics implication: static predefined
aggregates
Analytics implication: dynamic, on-the-fly
aggregation
Process
driven
Data
driven

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 7Public© 2014 SAP AG or an SAP affiliate company. All rights reserved. 7Customer
Implications for procurement?
Performance
benchmarking and
process mining
CPO
dashboarding
Data science/data
mining
360-degree view into end-to-end spend
management
Procurement excellence
Business partnership/digital transformation

Performance
benchmarking and
process mining
CPO
dashboarding
Data science/data
mining
management

CPO dashboard
 360-degree view across
procurement and beyond
 Tailored to your specific needs, on
top of existing SAP Ariba analytics
solutions
 Gathering data from multiple
internal and external sources
 Allowing on-the-fly ad hoc questions,
root-cause analysis, and simulation
 Real-time and predictive
 Intuitive visual and mobile

Short iPad demo

From process driven to data
driven
 Use of data as a means of growth
 Opportunities and risks spotted
quickly
 Hypothesis over assumption
 Decisions based on analytics
 Constant experimentation
Which business benefits ?

Performance
benchmarking and
process mining
CPO
dashboarding
Data science/data
mining
management

Benchmarking – SAP Ariba + SAP
18,000+
participants
50+
business process
assessments
3,000+
KPIs on demand
analytics
Customer
benchmarking
Prospect
benchmarking

Value lever framework
Value levers Savings levers Key metrics
Cash
management
 Discount capture – on prenegotiated discounts
 Discount capture – net new discounts
 Days payable outstanding (DPO) extension
Percentage spend
under discount
Process
efficiency
 Purchase order processing
 Invoice receipt and processing
Invoices per FTE
Spend
compliance
 User (spec and vendor) compliance
 Supplier compliance
 Accounts payable error reduction
Percentage of spend
under management
Price
reduction
 Sourcing savings – unit price reduction
 Sourcing savings – increased spend capture
 Tactical sourcing savings
 Continuous improvement
Average annual
sourcing savings

Typical results: performance analysis

Early findings : SAP Ariba solutions versus
non-SAP Ariba solutions
Increase in efficiency for POs
processed per FTE when using SAP Ariba
solution
60%
Lower FTEs in procurement per
billion of spend when using SAP Ariba
procurement solution
58%
Higher savings for customer when
leveraging SAP Ariba sourcing solution to
drive unit price reduction
97%
Faster processing of user requisitions
to purchase orders when using SAP Ariba
solution
72%

Early findings: SAP Ariba solutions versus
non-SAP Ariba solutions
• SAP Ariba clients have lower total procurement of an average of $1.3M per $B in spend.
• Best-in-class SAP Ariba clients address 94% of spend and play a more strategic role within the organization.
 Best-in-class SAP Ariba clients
manage 2X more sourcing
spend
 SAP Ariba clients with formal RFX
and quotation process have
41% fewer sourcing FTEs per
$B in spend
• Organizations that have self-service
and workflow tools save
€200K per €Bn in spend
• SAP Ariba clients have 30%
lower maverick spend
• SAP Ariba e-invoicing clients
process 70% more invoices per
FTE
• Best-in-class SAP Ariba clients
have 3x more spend under
discount
Source Procure Settle

Process mining with Celonis
 Every action leaves a digital trace in the IT-Systems
 Celonis algorithms find these digital traces…
 ....puzzle them together
 …and reconstruct the actual process.
Procurement
system
Process
database
(SAP HANA)
Import
Analysis

Short video

Value created by process mining
Efficiency
 Decrease bottlenecks and inefficiencies
 Up to 15% cost reduction
 Establish a continuous process improvement
 Benchmark locations, departments, and so on
Compliance
 Check for fraud patterns
 Detect process violations
 Decrease length and costs of audits
 Monitor if corrective actions are effective
Process transparency
 See the actual as-is process
 Down to a single process instance
 Intuitive visualization
 Real-time monitoring, immediate insights

Performance
benchmarking and
process mining
CPO
dashboarding
Data science/data
mining
management

The opportunity
1. Technology – Enables organizations to capture, mine, link, and look for
patterns in procurement data to deliver valuable insights across the end-to-
end process (SAP HANA Cloud Platform, SAP BusinessObjects Cloud)
2. Data science – With all the data out there, data scientists are becoming part
of many organizations and are viewed as assets to be leveraged by cunning
procurement groups to help on both the cost front and the growth front.
3. Supplier relationships – Once viewed only as adversaries at the negotiation
table, supplier partners are now viewed by many mature procurement
organizations as an avenue of growth.

 Spend analysis and supplier performance
 Category, catalog, contract management optimization
 Compliance and risk management; noncompliant buying behavior
 Service level management
 Matching supply and demand patterns
 Procurement intelligence and advisory services (forecasting asset usage, predictive
maintenance, energy consumption)
 Procurement to finance (working capital, fixed asset, MRO) – margin analysis
 Procurement to sales and marketing – matching campaign to purchase
 Data monetization
Data mining ideas in procurement
Procurement as a value adding business partner, driving more
supplier co-innovation

Data mining value proof point
Financial value creation
ROI and TCO – value model
Co-innovation
Digital prototype
Value proof point
Business transformation drivers Why
and what – maturity assessment
Architecture and digital road map
How and when – from as-is to to-be
SAP data
scientists
Network value
engineers
Data sources: Internal, external, structured, unstructured, business network data
Technology: SAP BusinessObjects Cloud + SAP HANA Cloud Platform + Ariba Network
30 to 90 days

Infinite opportunities for first movers
Don’t wait!

Thank you!
Clément Celier
Clement.celier@sap.com

Data and Analytics: What Your Data Is Telling You and Why It's Worth Listening

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