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What Your Spend Data Is Telling You and Why It’s Worth Listening

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PUBLIC
June 2017
Spend Analysis: What Your Spend Data Is
Telling You and Why It’s Worth Listening
2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Overview and Introductions
Panel Presentations
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What Your Spend Data Is Telling You and Why It’s Worth Listening

Data is the "new oil." Spend data can unlock hidden opportunities to maximize savings, improve compliance, and mitigate supply chain risks. Without proper visibility into spend, suppliers, or market information, sourcing and procurement decisions can run counter to business objectives. Comprehensive visibility is the stepping stone to effective spend management. This session shares customer success stories and best practice insights to help you get the most from spend analytics initiatives.

Data is the "new oil." Spend data can unlock hidden opportunities to maximize savings, improve compliance, and mitigate supply chain risks. Without proper visibility into spend, suppliers, or market information, sourcing and procurement decisions can run counter to business objectives. Comprehensive visibility is the stepping stone to effective spend management. This session shares customer success stories and best practice insights to help you get the most from spend analytics initiatives.

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What Your Spend Data Is Telling You and Why It’s Worth Listening

  1. 1. PUBLIC June 2017 Spend Analysis: What Your Spend Data Is Telling You and Why It’s Worth Listening
  2. 2. 2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Overview and Introductions Panel Presentations  Christoph Verschuere – Etihad Aviation Group  Alain Daigneault – Manager Spend Analysis, SAP Ariba (SAP) Open Q&A Agenda
  3. 3. Overview and Introductions
  4. 4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Data aggregation Dashboards and reporting Traditional business intelligence is just the tip of the iceberg… Commodity classifications Supplier data enrichment Market insights and benchmarks
  5. 5. 5PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ “Knowing is not enough, we must apply. Willing is not enough, we must do.” Bruce Lee Spend analysis
  6. 6. 6PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Panelists Alain Daigneault Manager Spend Analysis SAP Ariba (SAP) Christoph Verschuere Corporate Head of Information & Technology Etihad Aviation Group
  7. 7. 7PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Overview and Introductions Panel Presentations  Christoph Verschuere – Etihad Aviation Group  Alain Daigneault – Manager Spend Analysis, SAP Ariba (SAP) Open Q&A Agenda
  8. 8. SAP Ariba Spend Analysis SYNERGY – sharing, connecting, winning
  9. 9. Knowledge is Power. It controls access to opportunities and advancement. Peter Drucker Etihad Airways is the National Airline of the United Arab Emirates, established by Royal (Amiri) Decree in July 2003. It commenced operations in November 2003 and has developed into one of the fastest growing airlines in the history of commercial aviation. OUR VISION The airline seeks to reflect the best of Arabian hospitality - cultured, considerate, warm and generous - as well as enhance the prestige of Abu Dhabi as a centre of hospitality between East and West. Our goal is to be a truly 21st century, global airline, challenging and changing the established conventions of airline hospitality
  10. 10. What is SAP Ariba Spend Analysis ? Drives business decisions regarding Spend & Sourcing Opportunities Enables Strategic Category Management Activities Comprehensive view of spend Reducing Procurement Cycle Time Transparency Consolidation Savings Opportunities Spend Compliance
  11. 11. SAP Ariba Spend Analysis as a Service @ ETIHAD 1. What is this Service 2. Users 3. Business Capabilities Supported 4. What is included? 5. Cost of the service 6. Performance Expectations 7. Dependent Systems Spend Analysis business service enabled through public cloud platform that provides a comprehensive spend analysis of company wide spending, enriched with supplier database. The service drives ongoing spend optimization and is available for all companies and Equity Partners. This service includes the following: • Spend data extraction from 5 EY backend legacy systems: • EY Oracle • EAS Oracle • EY Engineering Oracle • Almira • FuelPlus • Commodity classification • Spend data enrichment • Dashboard creation • Reports creation Run Frequency – • Offline – Quarterly • Online – Continuous (excl. enrichment) • Spend management leading to support streamlined and best in class sourcing and procurement • ID sourcing opportunities • Manage maverick spend / improve contract compliance • Increase spend under management • Reduce sourcing cycle times • Manage purchase price variance • Supplier rationalization • Manage supplier risk • Diversity management Key Metric Target Service hours 24 x 7 Spend Savings To be quantified quarterly on the basis of the sourcing projects Data Quality Minimum 90% Supplier accuracy Minimum 90% Commodity classification Total number of concurrent users: 200 Total number of users defined: 82 Total number of Super users: 8 Business Owner/Administrator: Corporate Analytics – Spend Analysis • Usage based costing based on total spend value • Cost of the service: xxxxx USD per annum for xxxx Billion USD Spend covered • OKTA (Single Sign On) • Data from Source Systems
  12. 12. SAP Ariba Spend Analysis – Enabler for Delivering Benefits Transparency • Top spend categories • Top suppliers in each category • Risk management - Judgement/ Bankruptcy indicator Consolidation • Visibility of total spent by Supplier up to Global Parent • Visibility of total Etihad Group Spend by Category/Supplier * Savings Opportunities • Improved Sourcing Pipeline • Economies of Scale • Analyze supply base diversity • Supplier and category optimization • Visibility into price indexes and discount leakages Reducing procurement Cycle Time • Current and detailed information available • Focus on analysis & planning, not hunting & gathering Contract Compliance • Highlights out of contract spend • Identify Maverick Spend Dashboard Standardized Reports by user type Customized Reports – Example Spend by Supplier Region , Country , City
  13. 13. SAP Ariba Spend Analysis Enrichment Process Data Extraction Data Consolidation Data Validation Data Upload Data Upload Validation EY data approval Supplier Enrichment Commodity Enrichment Enriched Data Published Dun & Bradstreet +230Mio Businesses SAP Ariba Supplier Network +500K Businesses - Supplier Normalization/ Rationalization - Parentage - Enrichment: Judgements , Bankruptcy, Diversity, Green
  14. 14. Supplier Parentage SAP Ariba Spend Analysis enables us to see how much the Etihad Group is spending with a particular Supplier Group. Example: There are more than 10 suppliers registered in the ERP Systems that are all part of the “United Technologies” Group.
  15. 15. Supplier Fragmentation SAP Ariba Spend Analysis allows for easy supplier fragmentation analysis. We can run a report to see how many suppliers are in each category of spend We can add alerts. Example: Any category above 20 suppliers highlight in yellow , any category above 50 suppliers highlight in Red
  16. 16. Commodity Enrichment Machinery & Equipment Freight & Handlings Pool Equipment Capital Accrual for Commission Unallocated Receivables Schenker Logistics LLC Schenker Deutschland AG HM-Schenker Logistics LLC Schenker AG Schenker Limited Kenya Supplier & Commodity Visibility in the financial system Supplier listed as multiple vendors in ERP Spend type presented by GL account SAP Ariba Spend Analysis – Providing Transparency on spend categories per supplier Spend Correctly classified as Cargo Transport All Schenker vendors grouped under one Global Parent
  17. 17. Category Analysis SAP Ariba Spend Analysis enables us to analyze categories to identify spend patterns, compare to benchmarks and identify top suppliers The Top 10 Legal Suppliers based on Spend make up 76% of total legal fees 56% of Total Legal Fees are for the Top Vendor xxxxxxxxxxxx Legal Fees Analysis
  18. 18. 2016 Top Spend Suppliers
  19. 19. Etihad is Embedding Spend Analytics in a continuous improvement Process  Spend Vis enrichment process is ongoing  We will continue to create enrichment rules to classify data better and more accurate  The accuracy to more granular spend category levels will improve over time  Active participation from Category buyers and managers is required to ensure maximum enrichment confidence  Super Users have the responsibility of submitting Enrichment Rules  But the Strategic Tool delivers immediate business value and insight, even on legacy data
  20. 20. 20PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Overview and Introductions Panel Presentations  Christoph Verschuere – Etihad Aviation Group  Alain Daigneault – Manager Spend Analysis, SAP Ariba (SAP) Open Q&A Agenda
  21. 21. 21PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ User Adoption  Let Super Users Lead the Way  Better Your Data on Your ERP  Enable Custom Taxonomies  Create Best-in-Class Dashboards and Reports  Leverage Best Practice Center Projects (Most of Them Free of Charge!) Open Q&A Agenda
  22. 22. 22PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ “Where is the data coming from?” “Can I trust the data?” “Why should I use this tool?” “How do I identify opportunities and areas for improvement?” “How do I build the reports I need?” “What are the data telling me?” “Why is this any better than my offline Excel spreadsheets?” Deploying spend analysis raises questions
  23. 23. 23PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ  Can articulate the business case for SAP Ariba Spend Analysis  Single point of contact for end users  Advanced user of analysis who can train your users  Coordinate with SAP Ariba deployment lead and internal stakeholders on – Custom reports and dashboard content – Announcements, recent successes – Communicate enrichment availability Make adoption work – let super users lead the way
  24. 24. 24PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ  Trust in data and classification is essential for user adoption!  Regularly review commodity classifications with predefined timeline  Create refinement report to focus enrichment review on newly loaded data  Consolidate approach of online enrichment change request (ECR) feature  Implement “in-house” source system data improvements to further enhance enrichment outcomes Make adoption work – data improvement at source
  25. 25. 25PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ  A custom taxonomy allows translation of SAP Ariba classification taxonomy to end-user language  Enable easier execution on initiatives such as strategic sourcing, maverick spend management, and rebate programs  Build taxonomy at a deeper level to support direct spend vs. indirect spend  Work toward a 1:1 mapping with SAP Ariba classification taxonomy to preserve granularity Make adoption work – custom taxonomies
  26. 26. 26PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ  Keep dashboards and reports focused on key user groups  Use predefined easily accessible content  Leverage announcement/news section for project successes, milestones, timeline  Integrate compound reports to give 360-degree view of suppliers and commodities  House relevant documents on dashboard (cheat sheets, presentations, …) Make adoption work – dashboards and reports
  27. 27. 27PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ * as of Q1 2017 * Make adoption work – leverage best practice center projects
  28. 28. 28PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Summary: 5 key points to take away 1. Enable super users to support your end users. 2. Benefit by trustworthy data thanks to ongoing refinement. 3. Implement custom taxonomies to support effective sourcing and spend management. 4. Make dashboard content easily accessible and group-relevant. 5. Take advantage of the best practice center!
  29. 29. 29PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ Please Complete Session Survey Locate Session Click Surveys Button Select Breakout Survey Rate Session
  30. 30. Thank you. Contact information: Alain Daigneault, MBA SAP Ariba (SAP), Spend Analysis +420 225 375 791 alain.daigneault@sap.com

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