Blog of SAP Business Intelligence Insights & Information - Lonnie Ayers, CEO and SAP Certified Consultant

8 Secrets to SAP Enabled Spend Performance Management

  

 Email Article  

Tweet  

  

  

Just about every organization spends a large proportion of their money on external parts and services. For example, a typical major airplane manufacturer will procure up to 80% of the parts that go into one of their airplanes from external sources.  With global supply chains being the norm, manufacturers must be, and indeed, are critically concerned with getting the best deal on every dollar spent anywhere along the supply chain.  You need Best Tools and Best Practices, along with time to walk down the learning curve to achieve this.  Here are those best practices.

1. Enable the tracking of performance and critical success factors at all echelons of the supply chain, both internally and externally.
2. Provide quality data directly to business users who need to make better sourcing decisions.
3. Integrate sourcing processes from spend analytics to e-sourcing and contract management.  E-Procurement should be your norm.
4. Enable monitoring of contract compliance to ensure limited contract leakage.  Did you know most companies fail to enforce contract penalties?
5. Enable the identification of gaps within the supply base to minimize risk within the supply chain process.  For example, what happens if the straight of hormuz is closed?
6. Leverage world-class Data Services to classify, enrich and normalize spend data.  Data quality is reported to cost the U.S. economy approximately $600,000,000,000.00 annually.  Roughly speaking, that is equivalent to the economic stimulus package and data quality issues represent one of the greatest economic loss spots to the global economy.
7. Establish processes for periodic refreshes of spend data to ensure data quality and optimal decision-making.
8. Provide a consolidated view of  all spend data regardless of the source system, and for users  to extract that data in an intuitive way.

This list is deceptively short.  Accomplishing all of them requires concerted effort to achieve optimum levels of Spend Performance Management.  Ready to get started?

Thanks

Lonnie D. Ayers, PMP

President, SAP BW Consulting, inc.

E-Mail: Lonnie.Ayers@SAPBWConsulting.com