Blueprinting for Spend Performance Management Part 1 (Gathering Requirements) Applies to: SAP Spend Performance Management 2.1, SAP BW, SAP SRM, Analytics, SAP esourcing, Enterprise Performance Management (EPM), Operational Performance Management (OPM). For more information, visit the Enterprise Performance Management homepage. Intended Audience: Customers of SAP Spend Performance Management Implementation Partners Summary This paper provides suggestions for the requirements gathering done during the blueprinting exercise for a SAP Spend Performance Management implementation. This is part one of a two part series. Author: Rajesh Prabhu Company: SAP AG Created on: 13 July 2010 Author Bio Rajesh Prabhu is a Development Architect for Enterprise Performance Management applications with a focus on Spend Performance Management 2010 SAP AG 1
Document History Document Version Description 1.00 First official release of this guide 2010 SAP AG 2
Table of Contents Document History... 2 Participants (suggested list)... 4 Data Extraction Considerations... 5 Number of Source Systems... 5 Timeframe of data to be extracted... 5 Objects for extraction... 5 Data Volumes... 5 Extraction Strategy (especially for non sap systems)... 6 Frequency of Data Extraction and Load... 6 Spend Data Enrichment... 6 Supplier Data Enrichment... 6 Spend Classification... 6 Additional Category Hierarchy... 6 Diversity information... 7 Supplier Risk information... 7 External feeds... 7 Customizations... 7 Extractors... 7 Data Mgmt... 7 Custom Measures and Dimensions... 7 Data Model Enhancements... 7 Analysis... 8 Boxed Reports... 8 Whether to use OOTB or to create own?... 8 Do all users get to see all data?... 8 Executive Briefing and Knowledge Share... 8 Linkbacks and related applications... 8 Embedded Business Actions... 8 Alerts... 8 Related Content... 9 Copyright... 10 2010 SAP AG 3
Introduction The first step after the implementation kickoff is blue printing. Blueprinting for Spend Performance Management This article is part one of the two part series for blue printing Spend Performance Management. The purpose of this very important exercise is to define the list of things you want to achieve with your spend performance mgmt implementation. What is it exactly that you want your spend performance mgmt application to do for you. In addition to getting a general visibility on Spend data what is it additionally that you want to accomplish with the application? Here are some examples: Do you want to consolidate your suppliers? Do you want to improve your savings and buying patterns? Do you want to have a normalized view of your supplier base? Do you want to negotiate better with your suppliers? Do you want to reduce your procurement life cycle time? Do you want a visibility on the potential Risks associated with your suppliers? What actions do you want to take, once you have identified an? Do you want to understand contract compliance and occurrences of off contract spend? Do you want to see how your diversity spend is faring? All of the above? Answering these questions will help you set the goals and expectations for the application. A comprehensive list can be found at this location. This is precisely what the blue printing exercise is all about. It is a critical step, when correctly executed, helps you achieve the most out of the application. Additionally it also ensures better Participants (suggested list) Here is a suggested list of people who are recommended for this phase of the blue printing Project Manager (driver of this exercise) CPO Sponsor of the project Procurement Director Key Buyers and Commodity Managers IT experts who would be involved in implementation Implementation Partner (if one is involved) 2010 SAP AG 4
Data Extraction Considerations Number of Source Systems Spend data is usually spread across a number of source systems. We have noticed that even customers who predominantly have a SAP stack, have additional sources of Spend data. Also even within SAP there can be multiple sources of this data, like ERP, SRM, esourcing. Examples of non SAP sources can be bank feeds for travel/expenses or pcards or other procurement sourcing systems that might be in place. Determining all of the source systems which would provide the information to answer the above questions is key. Once you have listed all of the systems out, it might suddenly seem like a daunting task, but don t worry, breaking down the workload into smaller chunks/phases, makes it a lot easier to understand and successfully implement. Timeframe of data to be extracted Depending on the industry segment and the type of analysis expected to be performed, how much data needs to be extracted needs to be determined. The answer could be in the form, last N years, last N quarters, last N fiscal periods etc Objects for extraction Based on the availability of data and the kind of analysis that needs to be performed, the right objects need to be extracted. Following is a list of transactional data: Invoices (Mandatory) T/E and pcard Contracts Scheduling Agreements Purchase Orders Delivery Lines Budgeting Data Forecasting Data Sourcing and Procurement Projects Data Volumes Figuring out the data volumes that would eventually get loaded into the application is necessary for the next step after blueprinting, hardware sizing. For additional information on hardware sizing refer to blog post. 2010 SAP AG 5
Extraction Strategy (especially for non sap systems) For SAP systems there are a few extraction options available including the very convenient starter kit, for more information visit the data extraction FAQ wiki. For non-sap systems, you would need to spend a moment discussing the strategy for extracting data for Spend. Frequency of Data Extraction and Load From a business perspective, the data needs to be refreshed as frequently as possible and from an IT perspective, managing the data loads can potentially take up a good amount of time. Striking the right balance is the key. Once a year might be too infrequent where hourly loads might be too taxing on IT and the systems and frankly might not add any additional value. There is a need to Strike the right balance and choose a realistic frequency of load which satisfies all the business scenarios and also takes into account IT constraints. One approach would be to start slow (in terms of data load frequency), especially because user training activities and analysis of the initial historical load will take up a significant amount of time right after the application is released for productive use. Once Business is more familiar with the application and IT is more comfortable dealing with the data load, the frequency could be gradually increased. Spend Data Enrichment Although majority of data comes from the procurement/sourcing source systems, this data can be enhance with additional information to add strategic value to the analytical capabilities of the offering. Here are some of the enrichment capabilities that are commonly used to enhance Spend data. Supplier Data Enrichment Supplier master information (especially if multiple source systems are involved, or because there has been acquisition activity) can be enhanced with normalization services provided by SAP and other third party Supplier normalization data providers. With this enrichment, not only is it possible to analyze spend based on original supplier master information, but additionally, also on the Normalized supplier information. This improves the capability for negotiations with the Supplier base. This data can be further enriched with additional content such as line-of-business, corporate linkages, sales, trade styles etc. Spend Classification Duplication of category information, not only across multiple systems, but also within a single system can occur, leading to a fragmented view of Spend by Category. Category is one of the most popular analysis dimensions and to achieve a strategic view, a true aggregated data set needs to be considered. The Category master information can be enhanced by services provided by SAP and other third party providers. Additional Category Hierarchy Categorization hierarchy has multiple flavors like UNSPSC, eclass, internal and custom hierarchies. Bringing these hierarchies can help view Spend data in a different light. 2010 SAP AG 6
Diversity information Supplier Diversity based analysis of Spend can help verification of the compliance scenarios where certain levels of diversity spend is a necessity. If this information is not already part of the Source systems, then this can be brought in to the Spend data by SAP or other third party providers. Supplier Risk information Analyzing risk associated with your Supplier base can strategically enable you to differentiate yourself and help avoid pitfalls like missed deliveries/opportunities and be proactive about managing the potential situations that might arise. The application not enables you to enrich the Supplier master with this risk based information but also allows for building custom virtual hierarchies which are based on this information. External feeds It is possible to Analyze of Commodity/Market feeds linked up with Spend data at an Item or a Category/Commodity level. Example of these feeds could be Crude Oil prices, Gold/Precious Metal prices, Cotton commodity rates, Mint commodity pricing rates. Associating this market information with all of the potentially hundreds of thousands of items can be a daunting task. It might also not necessarily add a whole lot of value. Instead focusing on the top N categories/items and bringing that information into the application could provide for really good results for the effort investments. Examples of how enabling the application with this external information can help: Analyze Purchasing patterns against market fluctuations Compare budget/forecasts with external data Compare internal procurement data with Market Trends Customizations Although this application has been designed with a top down, scenario driven design, and major modifications are an exception rather than the norm. There can always be scenarios where customizations are required.here are some customizations to consider. Extractors Customizations are often made to the extractor starter kits. This is the area where, because of the vastly different ERP configurations and differences on business practices between different customers, the possibility of more modifications exist. Data Mgmt Data Column headers, data properties, error/warning flags are examples of within the application enhancements that can be at the data management tool level. Custom Measures and Dimensions Based on the goals of the analysis, if there are additional fields (dimensions or measures) that need to be brought into the application, there are custom fields available just for this exact purpose and can be leveraged without any additional costs of customization and maintenance. Data Model Enhancements In the exceptional event that business requirements dictate customizations to the existing data model (content of the application), it s easy to carry this out since it is the standard BW content. 2010 SAP AG 7
Analysis Boxed Reports Spend Performance Management comes with a comprehensive list of 120 + out of the box (OOTB) reports. Refer to the Spend official documentation for details. These reports cover majority of the analytical scenarios required for analyzing procurement data. Whether to use OOTB or to create own? It is really a customer choice, whether you want to use these boxed reports or create your own. One reason for creating your own reports would be because you might have chosen a sub set of Spend objects for which data will be brought into the application. In case you do want to create your own set of standard reports, one recommended best practice is to copy over the SAP report closest to your target and then modify it. Do all users get to see all data? Depending on the flow of information within your organization and the restrictions to that flow, you might want to setup BW analysis authorizations within the application. Executive Briefing and Knowledge Share Create a plan to share the findings post go live with executives and other colleagues. There are multiple tools available in the application to enable that. Examples are Briefing Books, PDF and excel Files. Linkbacks and related applications You can configure the application to link back to other source systems using the Related Application functionality. Embedded Business Actions Spend Performance Management is integrated with SAP esourcing suite. If there is need for insight to action based on the analysis of the Spend data, then this integration should be considered. Alerts Alerting based on variables (changes after delta data load or with the passage of time) can help catch the changes in business data and proactively take action. The above information is at a very high level and pretty generic. A detailed requirements questionnaire can be found at the following location in Service Market Place: https://websmp109.sap-ag.de/instguidesssa Document name is Requirements Scoping Questionnaire.xls 2010 SAP AG 8
Related Content http://www.sdn.sap.com/irj/scn/weblogs?blog=/pub/wlg/19765 http://wiki.sdn.sap.com/wiki/display/cpm/faq+- +Data+Extraction+for+Spend+Performance+Management http://weblogs.sdn.sap.com/pub/wlg/19833 http://www.sdn.sap.com/irj/scn/index?rid=/library/uuid/d0e51ed5-ee3e-2d10-53b8-f2ef66032843 For more information, visit the Enterprise Performance Management homepage. 2010 SAP AG 9
Copyright Copyright 2010 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iseries, pseries, xseries, zseries, eserver, z/vm, z/os, i5/os, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Adobe, the Adobe logo, Acrobat, PostScript, and Reader are either trademarks or registered trademarks of Adobe Systems Incorporated in the United States and/or other countries. Oracle is a registered trademark of Oracle Corporation. UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group. Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this docume nt serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. 2010 SAP AG 10