Category Archives: Spend Analysis

Spend Rappin’ (3rd Repost)

It’s Boxing Day! And you know what that means … at Sourcing Innovation, it’s Spend Rappin’ time! (It’s a holiday tradition!)


To the Tune of “Christmas Rappin'” by Kurtis Blow

Don’t you get me all that JIVE about code you used before I’s alive,
Cause this ain’t 1965 – ain’t even 1999!
Now I’m the guy named Lamoureux and Spend is one thing that I know.
So every year, just about this time, I celebrate it with a rhyme!

Gonna save it, gonna shave it, gonna make it good,
Gonna take it all down through your neighborhood.
Gonna wring it, gonna sling it till it’s understood.
My rap’s about to happen, like the knee you was slappin;
Or the toe you been tappin’ on a hunk of wood.
‘Bout a two fisted dude, with a friendly attitude
and a sack full of savings for the people on the block.
He’s an old grey beard, maybe looks kind of weird,
and if you ever seen him he could give you quite a shock.

Now people let me tell ya about last year
when the dude came slicing spend through here.
Well the wit was out, the gloves on the ground,
folks stayed to watch him cut it down.
The beat was thumping on the block,
and they were glued to just one spot,
as the master cubed at a solid pace,
…
got a taste of the waste thrown in your face.
…
And this old spend slayer laid down a heavy layer
of his slicing dicing rhythm to a tree-mapped beat.
And the guy with the database started to participate,
and I could sure appreciate the spend roll up neat.

We were all in the mood so we had a little brood,
not a sound did abound, as he plowed through the mound,
then I thought I heard a gasp as he sliced through the past,
and laid our mav’rick spend bare, as I flopped into a chair.
So I went to the attic where I thought about the static
that our last spending tool was programmed to always give.
And I threw up my arms at the industry yarns,
Just a trick, a nick, and I’d let the suckers in.

He was quick, he was sharp and always on the mark,
he had a lot of success on his chinny, chin, chin.
He avowed, he was proud of the savings he allowed
from the tip of the ‘burg he found the savings within.
He’s cool for a fool throwin’ out every rule
every hour of the day when the cold winds blow.
Though the beard was-a cleared, I still have never cheered
like I did in the storm when I was in the know.

I said you’re right, my spend’s a fright,
Can you stop for a drop before you have to go?
He said “Sure, Bill, if the wine is chilled
and I’ll stake a steak down at the Monaco”.
So we went out back and discussed the stack
of invoices that had all been over-paid
and every dollar spent off of the contract
and then we laid it all bare till we made the grade.

And before he went this fine old gent,
finding gifts went to sift through his spend reports.
From the top to the bottom he reached in and got ’em,
spend trends for me, and variances from torts.

And the higher-ups got presents too,
Banned suppliers and a stale contract.
A bloated pie ’bout as clear as the sky,
the best that money couldn’t buy.
Cause money could never ever buy the feelin,
the one that comes when there’s no concealin’
of your spend by a tool that’s new
and that’s what Strovink‘s does for you.

The dude ya read’s back at the keys,
up late till all’s where it should be.
But if he were right here tonight,
he’d say Truthful Spending and to all a good night!

For my new readers, this cheerful verse is the result of a sly comment by Eric over on e-Sourcing Forum back in 2007 on How Not to Get a Job.

P.S. Those of you who have been around for a while might remember his groundbreaking and visionary series on e-Sourcing Forum and here on Sourcing Innovation in 2006 and 2007, and his new visionary series that launched this year, indexed below.

e-Sourcing Forum

  • “Web 2.0″ Spend Analysis – Introduction
  • Data, Data Everywhere
  • How Clean is Clean?
  • “Change” Does NOT Equal “Refresh”

Sourcing Innovation

Christmas Rappin’


by Curtis Blow
Youtube
 and YouTube

(Since it’s difficult to find complete and well-formatted lyrics on the web.)

Don’t you get me all that JIVE about things you wrote before I’s alive,
Cause this ain’t 1823 – ain’t even 1970!
Now I’m the guy named Kurtis Blow and Christmas is one thing I know,
So every year, just about this time, I celebrate it with a rhyme!

Gonna shake it, gonna bake it, gonna make it good,
Gonna rock shock rock you through your neighborhood.
Gonna ring it, gonna sing it till it’s understood.
My rap’s about to happen, like the knee you was slappin;
Or the toe you been tappin’ on a hunk of wood.
‘Bout a red suited dude, with a friendly attitude
and a sleigh full of goodies for the people on the block.
Got a long white beard, maybe looks kind of weird,
and if you ever seen him he could give you quite a shock.

Now people let me tell ya about last year
when the dude came flying over here.
Well the hawk was out, the snow’s on the ground,
folks stayed in to party down.
The beat was thumping on the block,
and I was dancing in my sock,
and the drummer played at a solid pace,
…
and a taste of the base was in my face.
…
And the guitar player laid down a heavy layer
of the funky junky rhythm of the disco Beat.
And the guy with the 88 started to participate,
and I could sure appreciate it sound so sweet.

We were all in the mood so we had a little food,
and a joke, and a smoke, and a little bit of wine,
when I thought I heard a hoof on the top of the roof.
Could it be or was it me, I was feeling super fine.
So I went to the attic where I thought I heard the static
on a chance that the prance was somebody breaking in.
But the noise on the top was a reindeer clop,
Just a trick St. Nick, and I let the sucker in.

He was roly, he was poly and not the holy moly,
you got a lot of whiskers on your chinny, chin, chin.
He allowed, he was proud of the hairy little crowd
on the point of the door where the skin should’ve been.
Get’s cool for a fool throwin’ out every yule
for a day on the sleigh where the cold winds blow.
So the beard maybe cleared, but I never have a-cheered
’cause it’s warm in the storm when it’s ten below.

I said you’re right it’s cold tonight,
Can you stop for a drop before you go?
He said “Why not if the music’s hot
and I’ll chance a dance beneath the mistletoe”.
So he went downstairs and forgot his cares
and he rocked the spot and danced like a pro.
And every young girl tried to rock his world,
but he boogie oogie oogied till he had to go.

And before he went this fine old gent,
finding gifts went to sift through his big red bags.
In the top for the bottom he reached in and got ’em,
toys for the boys, and for the girls flat rag.

And the grown-ups got some presents too.
A new TV and a stere-u.
A new Seville ’bout as blue as the sky,
the best that money couldn’t buy.
Cause money could never ever buy the feelin,
the one that comes from not concealin’
the way you feel about your friends
and this is how the story ends.

The dude ya read’s back at the pole,
up north where everything is cold.
But if he were right here tonight,
he’d say Merry Christmas and to all a good night!

Analytics is for Industrial Manufacturers Too

I’ve written dozens, sorry, dozens upon dozens of posts on Analysis and why every organization should be using it. So I’m not going to go into the details again in this post, but make it crystal clear for you business types who have yet to sign the cheque:

High-performance businesses — those that substantially outperform competitors over the long-term and across economic cycles — are five times more likely to use analytics strategically compared to their peers.
“Using More Analytics Can Help Industrial Manufacturers”, Industry Week.

Now, it’s true that correlation is not causation, as Pinky and the Brain skillfully informed you in their lesson in statistics, but a multiplier of five is very significant. It means that the use of advanced analytics tools is definitely a common trait of industry leaders and if you’re not sure how to become an industry leader, the best way to start is to emulate what the leaders do.

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You Cannot Overlook SSDO And Optimize Your Supply Chain

I was taken aback at this recent article in SupplyChainBrain on Supply Chain Optimization in the New Analytics Economy which outlined five analytics-enabled objectives which did not include strategic sourcing decision optimization, which is the next logical step in the sequence. Consider the objectives:

  • Supply Chain Visibility
    Step one is to understand how much the supply chain is costing you.
  • Demand Forecasting and Inventory Optimization
    Step two is to segment the supply chain, forecast demand, and then optimize inventory for each segment.
  • Network Optimization
    Step three is to periodically perform TCO assessments on the different segments of the existing supply chain network to identify the optimal performance configuration.
  • Predictive Asset Maintenance
    Step four is to perform preventative maintenance to minimize downtime and maximize uptime.
  • Spend Analytics
    Step five is to understand how much is being spent on each procurement category and identify those with the most savings opportunities.

The next natural step is:

  • Strategic Sourcing Decision Optimization
    Once the categories with the biggest savings opportunities are identified, it’s time to optimally source them so the overall TCO is minimized and the utilization of the current networks, optimized in step three, is maximized.

How could you possibly stop at step five?

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Analytics VI: Conclusion

Today’s post is by Eric Strovink of BIQ.

I’ve suggested previously in this series that analysis doesn’t have to be done by an applied mathematician; the key is to get insights about data. Sometimes those insights do require rigorous statistical analysis or modeling, to be sure. Much more often, though, one simply needs to examine the laundry, and the dirty socks stand out without any mathematical legerdemain.

Examining the laundry requires data manipulation. This usually takes the form of data warehousing, i.e. classic database management technology, extended in the case of transactional data to OLAP (“Online Analytical Processing”), SQL and or MDX, and reporting languages and tools. Problem is, business data analysts typically have insufficient IT skills to wield these tools effectively; and when they do have the skill, they seldom have the time. Thus, ad hoc analysis of data remains largely aspirational.

Custom data warehouses have value for organizations. ERP systems are a good example. But the data warehouse is a dangerous partner. It is not the source of all wisdom. It cannot possibly contain all the useful data in the enterprise. Warehouse vendors have trouble admitting this. For example, for years ERP sales types claimed that all spending was already tracked and controlled by the ERP system, so there was no need for a specialized third-party “spend analysis” system. These days all the major ERP vendors offer bolt-on spend analysis.

Spend analysis has the same issue. It introduces another static data warehouse, an OLAP data warehouse, along with data mapping tools that are typically not provided to the end user. As above, the data warehouse is a dangerous partner. It is not the source of all wisdom. It cannot possibly contain all the useful spend data in the enterprise. Spend analysis is not just A/P analysis; it can’t be done with just one dataset; and it’s not a set of static reports.

Once an opportunity is identified, more analysis is required to decide how to award business optimally. The Holy Grail of sourcing optimization has been a tool that is approachable for business users; but this goal has proved to be elusive. The good news is that “guided optimization” is now available from multiple vendors at reasonable price points. Although optimists (mostly experts at optimization) have argued for several years now that optimization is easy enough for end users without guidance, I take the practical view that it doesn’t really matter whether that’s true or not. As long as optimization is available at a reasonable price, whether it has a services component or not, the savings it delivers are worthwhile.

By no means is this series an exhaustive review of data analysis. For example, interesting technical advances such as Predictive Model Markup Language (PMML) are enabling predictive analytics to be bundled into everyday business processes. Scenario analysis is also a powerful tool for painting a picture of potential futures based on changes in behavior. But the vendors of these technologies either must make them accessible to end users, or offer affordable services around them. Otherwise they will remain exotic and inaccessible.

The bottom line is that analysis tools must be accessible to end users. It must be easy and fast to build datasets and gain insight from them. Optimization software should automatically perform sensitivity analysis for you, as the doctor has advocated. Ad hoc analysis should be the rule, not the exception. Analysis should not require vendor or IT support; if it does, it likely won’t happen.

The more you look, the more savings you will find; and when you walk into the CFO’s office waving a check, you will get attention as well as the resources to find even more.

Previous: Analytics V: Spend “Analysis”

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