Master the new challenges in strategic spend management
In many companies, a designated purchasing department is responsible for all purchases. Employees outside of this department are not allowed to make purchases on their own. In large companies or multinational corporations, purchasing is often a local task as well. This makes it extremely difficult for headquarters to get a clear overview of individual activities.
To counter these developments, many companies have implemented centralized strategic purchasing organizations. Within the management team, the Chief Purchasing Officer (CPO) is responsible for all purchases throughout the organization. In order to work effectively, therefore, CPOs require an enterprise reporting tool that supports purchasing activities and decisions as well as presenting the results in a clear, easy-to-analyze manner.
SpendControl supports CPOs with a flexible, professional system for spend visibility and management.
SpendControl helps you avoid these and other common mistakes. This system tightly integrates with the ERP and accounting systems in your subsidiaries or offices to automatically extract the data without needing manual interventions or manipulating source data.
The exemption from Excel
Without a common reporting system, most companies often turn to Excel-based solutions. Each month, the local units manually consolidate their data and send it to headquarters. This approach has many disadvantages like:
- Adding additional stress for employees outside of their everyday responsibilities.
- Bogging down the entire purchasing organization at the start of each month.
- Spending too much time consolidating Excel sheets manually due to the difficulty in creating a common structure.
- Increasing the risk of errors due to manual report processing.
- Requires IT support – which is already flooded with work as it is – to create basic analyses.
By far the biggest disadvantage is the subjectivity of the data as well as the different methodologies used to create it. All employees make many different decisions when compiling their data into reports, for example, to present themselves as well as their actions in the best-possible light.
As a result, CPOs need to evaluate their staff based on numbers that they have compiled themselves – a rather paradox situation. Since the information is hard to compare, it is also more difficult to create benchmarks to other business units.
With SpendControl you replace excel concerning this area and solve all these problems at a once.
Identify and leverage potential savings in strategic purchasing
SpendControl helps you identify and leverage potential savings in strategic purchasing. This unique ‘savings mining’ concept combines data mining technologies to help you search your own purchasing data to find the areas where you can save money.
Orpheus SpendControl is an advanced spend management system with specific methods for spend analysis - proven in many customer projects and almost fully automated. Your spend data will be extracted directly from your enterprise resource planning systems.
In a unique content management process, you can get the most of your source data and create the spend transparency you need to support your strategic purchasing decisions and your controlling.
Rules, accompanied by statistical methods and artificial intelligence methods, allow you to organize all spend data into a single point of access - tailored to your purchasing departments needs. Suppliers are normalized so that identical or related records will only appear once in your management reports.
Analyze your data using the wide choice of standard reports of this strategic pruchase information system or define own reports. Answer questions quickly right in between a meeting by using the powerful ad-hoc query functionality.
How to save 3 - 10% of your external purchasing volume through data transparency
Our vast experience with strategic purchasing projects shows that companies can typically save 3%-10% of their external purchasing volume by simply creating more transparency in their data. On top of that, sourcing initiatives that are supported by this additional transparency can help create an additional 7% savings on average! The diagram shows the average numbers for the projects we have implemented in the past few years.
CPOs expect dramatic cost savings. SpendControl can help you meet these expectations – for example, through bundling concepts that can lead to new price negotiations or a change in suppliers.
Without transparent data, CPOs cannot adequately organize and execute these tasks. In other words, besides having less bargaining power against their suppliers, CPOs cannot clearly measure actual savings or validate these numbers – or those of their staff – to the management board.
How CPOs optimize margins and gain control over their spend
SpendControl creates long-lasting data transparency by creating a detailed, common base of data across the enterprise. Since the system automatically categorizes data using a common standard (e.g. eClass or UNSPSC), companies can continuously improve the quality of their data.
The spend cube ensures the integrity and measurability of your data. The system directly extracts the data from your ERP systems. SpendControl takes care of the calculations and reduces the number of manual interfaces to a minimum. Users can check the plausibility of their data and even correct it if necessary. Since the system automatically generates the reports, there is little to no risk of subjective options or manipulated results.
This uniform, standardized categorization creates a common basis for all purchasing data which also helps promote common ‘wording’ across the enterprise. The system collects and processes all data using identical methods.
As a result, you can easily compare all analyses and results throughout your company. This creates a solid foundation for creating long-lasting purchasing decisions that also lead to significant savings.
SpendControl allows you to calculate these savings as well as separately analyze the effects of prices, volumes, raw materials or even currency fluctuations. As a result, all stakeholders in this process can clearly influence, measure and validate the success of these purchasing policies.
Effective reporting tools play a major role in supporting the spend management process. With SpendControl, you can leverage predefined, standard templates or even create your own reports. You can automatically update all of these reports on a regular basis and distribute them to various people in different formats. SpendControl also offers powerful features to help business users create ad hoc queries on their own and without needing technical skills.
What’s more, SpendControl can also help you to manage local purchasing processes because business units can see the quality of the master data.
Optimization of Working Capital and Supply Chain
The working capital of a company gets more and more into focus of the general management.
What binds large amounts of capital:
- long stock turnover periods
- long processing times,
- lack of utilization of payment terms and payment durations
SpendControl makes it easy to see where to manage your capital more efficiently. p>
Your profit: More liquidity
The most important aspects of strategic purchasing
Orpheus SpendControl offers custom support to help you to:
- reduce costs
- manage your purchasing organization
- optimize working capital
By fulfilling your basic needs for creating more transparency as well as finding answers to complex strategic questions, the software also helps you create a stronger connection between your purchasing and management accounting departments. SpendControl offers six different types of analyses with a wide range of built-in measures which you can supplement as desired.
Various kinds of reporting analysis are powered by strong technical features ranging from basic to advanced.
- Spend per company
- Spend per category
- Spend per region/county
- spend trends and variations
- price vs. market index
- plans vs. actuals
- raw material effects
- exchange rate effects
- solvency and risk KPIs
- range of goods
- top supplier per category
- payment terms, contract terms
- maverick buying
- payment behavoiur analysis
- contract compliance
- supplier compliance
- material price changes
- budget savings
- cost driver anaylsis
- negotiation successes
- % invoices without order reference
- % invoices without material reference
- data gap
- missing and faulty prone text information
Highly informative reports and solid, long-lasting insight on purchasing costs
SpendControl unites everything you need to optimize strategic purchasing and spend visibility in a single solution.
SpendControl automatically extracts the required data directly from the source systems. Coached by our experts, your IT specialists simply develop the necessary interfaces based on an exact specification.
The unique content management process cleans, enriches and assigns your data to strategic categories that are custom fit to your business needs. Afterwards, you can use this data in reporting.
Quickly create lasting transparency for your strategic purchasing data
For the content management functionality, SpendControl provides two separate modules:
- Data Consolidation (supplier, material, etc.)
- Categorization of master data and transactional data (invoices, orders, etc.)
In particular, the current categorization module offers unparalleled capabilities in comparison to other spend management systems on the market. Very few vendors can offer this breadth of functionality.
Because spend management solutions always need to be deployed as quickly as possible, the modules are logically set up based on real-world project requirements. The software is easy to use and has no features or functions that you won’t need.
Both modules have been tried and tested in various projects as well as everyday use and have successfully met a wide range of user requirements. This also shows that its functionality has reached a certain level of maturity.
Use the hard- and software of your choice
SpendControl is not a proprietary software tool. At Orpheus, we only use standard technologies and components that have established themselves on the market and have been tried and tested for years. The advantage for you is that you can stay flexible with regards to your hardware and software requirements. Even if you change systems, you can still use your SpendControl solution.
You can set up your reporting on many different platforms such Oracle, SAP BW or Microsoft SQL Server. What’s more, you can use any relational database you choose.
SpendControl has stood up to the test of real-world business needs. This software, which was developed based on extensive project experience, was designed for and is used by midsized organizations as well as large corporations. The software has proven its worth in one-time projects as well as dynamic, long-term implementations. Since the knowledge of our international consultants and IT experts flows back into the solution itself, your company directly profits from our immense knowledge and experience.
Best Practices Consulting
We support you in all aspects of procurement controlling solutions.
Expert knowledge about procurement controlling, initiative and data management.
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