Cutting the Cost of Procurement

3 Challenges you need to meet to drive procurement transformation.

Picture1-resized-600In a recent blog post for procurementleaders.com, Tom Linton poses the question: “Can we cut the cost of procurement itself”? Tom writes: “The first point of call for many procurement organisations has been suppliers. The thinking often goes: ‘our hard time is your hard time’, and the upshot is not only several rounds of negotiations, but also a reversion to a familiar stereotype for the function”.

We certainly think Tom’s views have merit and, in a recent blog post, we talked about how technology is a great enabler in helping to reduce costs and drive efficiency across internal procurement administration. Tom’s view was also echoed by a number of Finance and Procurement leaders who contributed their thoughts at Invenio’s recent Thought Leaders Procurement dinner, held in London in September. They too suspected that some of the greatest opportunities may no longer lie in supplier cost reduction but in transforming the way the procurement function itself operates.

But, whilst the desire exists for procurement to change, there are many internal and cultural hurdles that stand in the way. Software solutions like Invenio’s Invenio’s P2P Solutions for SAP can cut millions from the cost of procurement – but these savings can only be realised by redefining the way procurement is managed. And change itself is difficult to manage. Here, for example, are three challenges our customers needed to address on the journey to redefining the way they approach procurement.

1. Resistance to Change

The “we’ve always done it this way…” attitude is something we’ve seen time and time again when it comes procurement transformation. In fact, this attitude can be found not just in procurement – but ANY system change. The first step is to recognise this attitude. The next? To change it… Below are a few specific steps that our customers have taken that have helped lessen the anxiety their people feel about impending change.

PARTICIPATION.
The most important aspect of all is to involve as many affected departments and users as possible – right from the project’s inception. By ensuring there is regular communication and participation in the process, users can feel like they are helping drive change for the greater good. This ensures users don’t become disenfranchised and that they feel more comfortable with impending change. It also gives the users a chance to contribute feedback and ask any questions. Typical tactics we’ve seen work well include drop-in sessions, roundtable discussions and regular email updates.

EDUCATION.office_workers1-resized-600
Educating affected users about the reasons driving transformation (and what they stand to gain from it) can serve to enlighten and inspire users to make changes more easily. Involving the users at the design and testing stages, giving short demos or even opportunities for hands-on experiences during the implementation is a great way of fostering involvement and building enthusiasm.

SET EXPECTATIONS.
By asking too much of users, you may find that they become overwhelmed with the additional workload, thereby making them more resistant to incoming changes. Make sure expectations are realistic and goals are achievable to help keep the users on side.

2. Board Level Clout

Research tells us that one of the most common challenges facing the procurement department is in gaining support for change from Board Level Executives. Many CPOs believe procurement functions are simply not seen as a value-added function by these executives and that they are therefore less likely to invest the time and money needed to drive change. A recent Proxima study showed that the overwhelming majority of CPOs do not have a seat on the Board –with some 46% reporting to the COO and another 52% either directly to the CFO, or even a level below. To successfully drive transformational change needs the buy-in of the Board. Therefore Procurement Executives who are proposing changes must be equipped with a sound business case that helps them demonstrate how they can cut costs, improve efficiencies and deliver tangible savings to the bottom line. In addition, as the project takes shape, the procurement function must be able to rely on the Board to help them drive through changes. Again, this requires a sound business case and strong executive sponsorship.

3. Tackling Organisational Complexity

As a company grows so does process complexity. And redefining process takes a lot of time and energy. Procurement in particular touches many parts of the organisation and so redefining a procurement strategy will often highlight many complex processes that require a major rethink. Driving through the changes necessary to eradicate this complexity and fix processes can be a challenge for even the most forward-thinking business executives.

But tackling this organisational complexity head-on can have very positive effects on the organisation as a whole. For example, research carried out by The European Business Review shows that most organisations have evolved to be too complex. This prevents people in these organisations from focusing on the important things, performing key activities efficiently, or making important decisions fast enough. One of the particular issues they highlight is the difficulties in making operational expenditure decisions. The report states “too many layers of management was a common complaint, highlighted as a major driver of additional, costly (non value-adding) complexity”. By tackling the complexity issue at source, procurement executives can bring real benefits to all those who are encumbered by these difficulties.

Simply being aware of these challenges can help mitigate many of the difficulties in the journey to greater procurement efficiency. Invenio’s P2P Solutions can deliver real benefits right across an organisation – from massively reduced costs, to increased process efficiency and greater insight into global spend. It’s clear from our customers that the benefits to be gained from implementation far outweigh the challenges.

If you’d like to learn more please email info@invenio-solutions.com or call our SAP Advisory Team on +44 (0)330 440 1800.

Can Western Media Brands Capitalise on the Digital Growth in India?

The global media landscape is subject to constant change, with savvy media brands seeking to adopt the latest technologies and trends to attract a wider audience. And, thanks in part to the growth of smartphone and tablet sales, it is now easier than ever for consumers to discover, share (and even publish) this media content.

These factors have been shaping the way the media industry engages with audiences in the western economies for some time now but, with improving communications infrastructure and an increase in disposable income, more and more consumers in the emerging economies look set to join the party. Take India, for example, where it is predicted that PC sales (comprising desktops, notebooks and netbooks) is expected to grow by 8 percent across 2013-14 – with the tablet being the preferred choice for consumers (source: Times of India). This figure may not seem particularly high but it takes on new meaning, when compared to the overall global figure which, says the IDC, has actually contracted by 11.4% in the last quarter from the same time last year. It is these kinds of developments that are prompting many media companies to explore new overseas markets in search of growth – and further research suggests that India in particular may provide a rich stream of new revenue opportunities for the media industry.

India’s digitisation developments The Indian market has a rapidly expanding middle class and an appetite for western brands. This has seen companies such as British high street retailers, Marks & Spencer, open 10 stores in recent years with joint venture partners Reliance Retail. Media looks set to follow in their footsteps, buoyed by a growing market of consumers who now have access to internet-enabled devices. This growing audience is having an effect on digital advertising too, which grew by nearly 41% last year – with revenues surging from 15.5 billion rupees in 2011 to 21.7billion rupees. And a recent Boston Consulting Group paper, Buzz to Bucks: “Capitalizing on India’s Digitally Influenced Consumers” suggests that the number of internet users in India is likely to triple from 125 million in 2011 to 330 million by 2016 and is likely to increase further as the digital services become more accessible. Digitisation is not restricted to the internet either. In December 2012, Parliament in India enacted a new Bill to make digitisation of cable TV mandatory. The initiative started with the key areas of Delhi, Mumbai, Kolkata and Chennai and is expected to be pan-India by 2014. Because of this initiative, Indian Broadcasters are experiencing phenomenal growth – a factor which has been quickly noted by western companies.

So how do western media brands capitalise on this growth? In India, many forms of digital advertising and content delivery are still considered to be in a nascent stage – giving Western media firms with experience in delivering a digital experience, the opportunity to break new ground at relatively little cost. In addition, there are opportunities to licence and/or syndicate Western media brands to experienced local partners so that the market can be tested, and a gradual local presence can be developed and explored. Joint-ventures, as in the case of Marks & Spencer, can provide firms with much needed local market knowledge, and local market acquisitions can also offer a platform to grow a brand into an established base.

External help Although this seems to be an intriguing and exciting prospect for media companies to accelerate growth, some may be rightly exercising caution when considering an expansion strategy into new markets. At Invenio, we continue to help media companies develop the right solutions to support growing a global brand. As a SAP media specialist, we understand the market challenges you face – from platform convergence and digitisation to shifting market dynamics, IP protection and content distribution and can help you explore the right solutions needed to support a growing, global media business. If you would like to know more about how we can help your media company grow and prosper contact us now.

Global Co-operation in Combatting Tax Avoidance Grows…

According to a report by British accountant, Richard Murphy, tax evasion equates to some 18 percent of global tax collections. And, says Reuters correspondent David Cay Johnston in his blog post Where’s the fraud Mr President “Murphy’s $3 trillion estimate, 5 percent of the global economy, shows how a combination of weak rules on accounting and disclosure combined with inadequate budgets to enforce tax laws impose a terrible cost on honest taxpayers and the beneficiaries of government service”.

There are many types of tax avoidance that make up this estimate – some legal, many illegal – and, if recent reports are anything to go by, Governments are committed to increasing international cooperation to tackle the issue on a global scale…

China recently announced it has agreed to join the international effort by the Group of 20 leading economies (G20) to combat tax evasion by signing an agreement to share tax records. China’s decision means that all G20 countries now have agreed to cooperate on tax avoidance, a priority set by global leaders to address the causes of the 2007-2009 financial crisis and to help combat corruption.

The move follows the announcement in July 2013 which saw Finance Ministers from the G20 formally back plans to tackle international tax avoidance and evasion. The G20 has asked the OECD to come up with a plan to improve tax cooperation, with the Finance Ministers saying they “fully endorse the OECD proposal for a truly global model” of information sharing. The statement called on all countries to make automatic information sharing a reality “without further delay”, adding that “capacity-building support” would be provided for poorer nations.

One driver for this increased cooperation is the recent string of news headlines that allege many multinational firms are legally avoiding tax through the use of loopholes and tax havens. Recent high profile cases in the UK include firms such as Apple, Google, Amazon and Starbucks who have all been heavily criticised for the amount of tax they pay in the UK. Although these companies are at pains to point out that these schemes are legal and they have a duty to shareholders to minimise their tax bills, the proposed new rules, and improved cooperation between nations could see global giants paying more in the countries where they do business.

Tackling Fraud with SAP

A problem that’s just as difficult to address for Tax Agencies is that of individual or small-scale illegal fraud that can be difficult to detect. A recent article in Bloomberg’s Business Week about the world’s largest shadow economies (defined as “parts of the economy involving goods and services which are paid for in cash and not declared for tax”) said: “…in 2007, in 162 countries, an average of 35.5 percent of official gross domestic product slipped through the cracks—not counting any fruits from such illegal activities as drug dealing or organized crime”.

This kind of tax evasion not only damages the reputation of government agencies, but it also contributes heavily to ever-increasing budget deficits. Paying taxes is a cornerstone of a healthy economy and a “shadow economy” means Governments often lack the revenue they need to provide adequate public services.

With more and more citizens avoiding taxes by operating their businesses “off the grid”, advanced fraud detection technologies are becoming an increasingly popular method used by Tax Agencies to help combat the problem. SAP Fraud Management, for example, was announced by SAP in March 2013. In its announcement SAP said: “The solution can help Tax Agencies to reduce fraud and non-compliance by cross-checking tax returns or social service applications against millions of related data records in real time – giving tax officers increased capability to spot whether submitted applications match information from other data sources. By further applying predictive algorithms from SAP HANA on a large number of transactions, Revenue authorities can uncover hidden fraud patterns and produce alerts on suspicious transactions that might be missed by conventional fraud and compliance rules”.

The development of technologies that can assist Governments in analysing data on such a huge scale will be welcome news for those struggling to manage the deluge of data brought about by digitisation. John Schweitzer, senior vice president and general manager, Analytics, SAP said. “SAP Fraud Management powered by SAP HANA will enable enterprises to detect, investigate, prevent and monitor irregularities or fraud in environments with ultra-high volumes of data, from both SAP and non-SAP systems. With SAP HANA as its backbone, SAP Fraud Management aims to bring unprecedented processing capabilities.”

Improving the Collection Process with SAP Tax and Revenue Management

Invenio’s Public Sector practice is uniquely placed to offer a rapid, efficient and cost effective deployment of SAP Tax and Revenue Management solutions. Invenio helps Tax Agencies to create a stable foundation for the entire management of the tax and revenue management life-cycle across all tax types to aid efficiency of the entire collection process.

Invenio Climb 27 Places to Number 24 in The Sunday Times Tech Track 100

2013_TechtrackREADING, UK – 16 September 2013. Invenio today announced a leap of 27 places in the newly announced Sunday Times TechTrack 100, a league table which ranks Britain’s top performing private technology companies. The ranking is based on sales performance over a period of three years in order to give a true measure of a company’s ability to meet sustained, organic growth. Invenio is now positioned in 24th place compared to last year’s rank of 51.

Over three years Invenio’s annual sales have grown by an average 117% year on year. The company’s commitment to delivering innovative SAP solutions to a growing customer base, combined with a continued focus on service excellence are key factors contributing to this growth. Over the past year, Invenio have also intensified the investment in emerging technologies including those that support the growing requirement to exploit Big Data, improve analytics and incorporate mobility. In addition, the company is ramping up in other areas including the delivery of high performance SAP Tax and Revenue Management solutions to Central Governments, together with innovations to improve customers’ core business processes including Invenio’s P2P Solutions, the P2P self-service supplier portal based on SAP NetWeaver technology.

Partho Bhattacharya, Invenio’s Managing Director said “We are really proud of this achievement. Not only is this the second year we have featured in the Tech Track 100, but we have also seen the company improve its position by a significant margin. The Invenio team has once again risen to the challenge of growing our business admirably. Their focus and commitment to solving our customers’ biggest business challenges has helped Invenio thrive in this competitive market, and it is a testament to their commitment that has seen us being recognised again this year”.

Download Invenio’s official press release here.

To view The Sunday Times feature, and explore the full list of this year’s constituents please click here.

Media Contact:
Laura Coles
+44 (0)20 7993 5086

laura.coles@invenio-solutions.com

3 Ways to Improve Advertising Inventory Management with Business Intelligence

eMarketer’s latest estimates on digital ad spend in the US suggests that it is set to grow to $42.26bn in 2013 – accounting for 24.7% of all total media ad spending in 2013. The research also found that mobile spend is expected to grow by a healthy 95 per cent – accounting for a fifth of all digital ad spending, and 5% of total media ad spending. Meanwhile, in the UK, the Internet Advertising Bureau reported that in 2012, UK digital ad spend rose by 12.5% to a record high of almost £5.5bn. Just as digital spend crossed the £5 billion threshold, mobile ad spend reached its own milestone as surpassed the £½ billion mark in 2012 – representing an increase of 148% on the 2011 figure of £203.2 million.

The increase may help many media companies for whom advertising is a key revenue stream to offset the decline in ad spend across “traditional” offline business models – and particular in the beleaguered newspaper industry where a hefty fall in circulation for six national UK newspapers has recently been announced. But maximising revenues from online advertising inventory brings its own unique set of challenges.

Forecasting and pricing of advertising inventory – digital or otherwise – is complex. The challenges of selling perishable inventory at the right time and for the right price means publishers need to deploy sophisticated, insightful analytic applications to be successful. But when you take into account the deluge of data that’s being generated from any company’s online activities you begin to see the issue that media firms are faced with in turning this data into timely – and meaningful – business insight. Fortunately analytical technologies have moved with the times and there are a range of solutions that can help media companies to make sense of the vast repository of data produced in today’s digital economy.

Below are three ways in which media firms can deploy analytical platforms like SAP Business Objects to transform raw digital data into the meaningful business information that’s needed to inform digital advertising sales strategies:

1. Optimise Pricing Strategies.

Pricing and business analysts can spend much of their time cleaning and checking data – meaning they spend less time on analysing the information that’s needed to make optimal pricing decisions. What’s more, the amount of data that is available for analysis is increasing. Digital data has the potential to offer much deeper insight into various performance metrics (e.g. video v banner), across a variety of placement options and across differing delivery platforms (e.g mobile v tablet). Analytical tools like SAP BusinessObjects can take raw data and help organisations to create insight into the possibilities and potential of inventory, and help to inform cross-selling and up-selling strategies.

2. Improve Demand Forecasting.

A new breed of predictive analytical applications is helping organisations to identify patterns in past data to inform future business strategy. This is particularly pertinent for media companies who need to optimise demand forecasting to sell inventory. These technologies allow organisations to analyse current data and historical facts helping to better identify potential future demand for inventory.

3. Reduce Unsold Inventory.

Because of the perishable nature of advertising inventory, Media sales reps need fast, unambiguous recommendations on how to price ad inventory to maximize sales – without having to sift through large amounts of data or reading through long-winded reports. Business Intelligence solutions can equip them with this information while, at the same time, allowing them to analyse high volumes of pipeline data at any level of granularity to help inform their pricing decisions. This visibility means advertising sales professionals can react more quickly to changing sales conditions, with real-time information and accelerate deals through the pipeline to reduce the occurrence of unsold inventory.

These are just a few of the ways that business intelligence solutions like SAP BusinessObjects can help media executives to sell more space for the best price. Invenio are specialists in delivering cutting edge SAP solutions for their media customers. Contact us directly for more information.

Top Ten Verticals Adopting Big Data

In the last two posts from this IDC research series, we spoke about the IT challenges when implementing a Big Data solution and, the top ten business areas driving Big Data growth. In our final post, we look at the findings that some industries are becoming clear adopters of Big Data and Analytics. This can be due to a number of reasons but we believe this is mainly down to how organisations in these industries perceive the value of their data in not only responding to the demands of their customers, but for forward business planning and continuous improvement.

The top ten verticals:

1. Discrete Manufacturing and 2. Process Manufacturing
At the top of the adopters list are two manufacturing sectors. According to a recent study from the Aberdeen Group: on complex decision making and big data, top manufacturing performers are building up their Big Data and advanced analytics activities to help them take control of manufacturing complexity.

Manufacturing, especially in the UK, has had a rough ride over the past few years but a recent survey from the SMMT showed UK car manufacturing grew 7% in July, and year-to-date volumes are up 1.9%. Although this is only one area from the manufacturing sector, it is a great to see that after a number of rough years – through a double dip recession, UK manufacturers are seeing this uptick in the economy as a good time to invest in technology which can help them achieve many process improvements.

3. Government
Government organisations are well known for their huge volumes of data and, according to the Policy Exchange, the UK government could save up to £33 billion a year by using public Big Data more effectively. Governments are investing heavily in this new technology and in the many different areas they cover, such as; Tax and Revenue collections, Security, Fraud, Healthcare, Citizen Management and many others. Technology innovation adoption within the Public Sector normally lags behind the private sector so it is refreshing to see Government as number 3 on this list.

4. Communications and Media
While the digital age has been hard on almost every segment of the media, it also offers significant opportunities for forward-thinking organisations to harness the masses of online data to help uncover new revenue streams and improve the utilisation of existing assets. With Big Data, media companies are embracing a culture of data-driven decision-making to make the most of their digital assets. For a more in-depth view of how analytics can support media companies in an ever-changing digital world please click here.

5. Banking and 6. Professional Services 7. Insurances
We group these three verticals together under the banner of “Financial Services” owing to the similarities in the ways that these sectors use Big Data. A survey published in June 2013 by the University of Oxford revealed that 71% of financial services organisations already use Big Data and Analytics – almost double the number of just two years ago. For these firms, Big Data delivers much needed competitive advantage in an industry that’s still feeling the effects of the worldwide financial crises. For example, Big Data can help improve profit margins using insights extracted from many disparate sources including daily transactions, market feeds, customer account and service information, location data and click streams. The result is real-time intelligence and insight that can be used to transform go to market strategies and to create new business models and services.

8. Retail
With the vast amounts of data gathered by retailers every day, Big Data opens up new opportunities for organisations to improve operations in almost every area of the business. Large retailers can use Big Data to streamline operations, improve the customer experience, analyse marketing campaigns, increase sales and maximise profitability. According to a report by Mckinsey, a retailer using Big Data and Analytics to the fullest extent could increase its operating margin by more than 60 percent.

9. Healthcare
As healthcare costs continue to rise, private hospitals and healthcare organisations are looking to apply Big Data to help improve care, reduce readmissions and increase the effectiveness of treatments. Data in the healthcare industry resides in multiple places like individual EMRs, lab and imaging systems, physician notes, medical correspondence, claims, CRM and finance systems. Improving access to this data and using it for advanced analytics can help healthcare organisations to improve patient care and outcomes, incentivise the right behaviour for staff and clinicians and drive internal operating efficiencies. Not only will this benefit the healthcare organisations financially, but the benefits to the patients’ health should also rise.

10. Utilities
Big Data can offer dramatic business improvements to companies in the utilities industry. Advanced metering infrastructure (AMI), commonly known as “smart metres” are now replacing aging, traditional meters that require manual readings. With years of historical customer data combined with smart metre data, a utility company is in possession of the data that’s needed to improve efficiencies, reduce downtime and improve customer service. Big Data and Analytics will offer utilities companies a way to intelligently exploit masses of smart metre data to better monitor and forecast energy consumption patterns, identify inefficient energy use and improve customer segmentation to tailor service offerings based on customer behaviour.

As the story of Big Data transformation continues to grow we’ll no doubt see other industriesAnalytics and Big Data embracing the benefits of this new technology too. Mathematician Lord Kelvin was famously quoted “If you cannot measure it, you cannot improve it.” Which is exactly the premise of Big Data. Without a doubt, Big Data will improve the customer experience and will provide richer, more informative analysis instantly. The only question that remains, is when will you embrace it?

The IDC is a global provider of market intelligence and advisory services for the IT and telecoms industries. These three blog posts represent research from the IDC, sponsored by SAP.

5 ways to cut the cost of procurement with Invenio P2P Solution for SAP

Money-resized-600For years Finance Directors have asked their procurement teams to do one thing – cut cost. But after spending the past few years with an acute focus on cost reduction, many FD’s are now asking… “where do we go from here?”. After all, costs can only be cut so far. And, once your procurement people have renegotiated every contract with every supplier for the best possible deal, what’s left to cut?

Recent surveys have shown that FD’s today are a little less preoccupied with cost cutting measures and a little more focussed on growth. A recent article from Financial Director magazine suggests that growing optimism in the economy is spurring FD’s from big business to pursue more expansionary strategies. But whilst cutting costs may no longer be right at the top of an FD’s to-do list, a degree of uncertainty over the economy both at home, and in the wider Eurozone means that FD’s still want – and need – to keep a tight rein on expenditure.

With such an intense focus during the past few years on cost-cutting it can be difficult to see how much more cost an FD can cut. After all, if you cut too much, you risk negatively impacting top line growth. But there are still substantial savings that FD’s can gain by asking their Procurement Departments to explore how they can re-engineer the actual process of procurement itself to save money.

Below are 5 ways that Invenio customers have done exactly that, by deploying Invenio’s Invenio’s P2P Solutions solution for SAP:

1. Self-Service Supplier Portal.
Suppliers are able to manage the relationship with your business through a self-serve online portal across a variety of activities – from supplier registration to quote submission, PO acceptance to invoicing. And moving the workload to the supplier base of course means a very substantial reduction in administration and accounts payable for your team.

2. Automated everything.
Automate, automate, automate. Everything from budget management through requisitions, purchase authorisations, PO matching, approval processes and payment is fully automated – meaning less labour cost and a big increase in overall efficiency.

3. No budget. No spend.
If an employee has no budget, then they cannot place orders on your suppliers. It’s that simple.

4. Mobile-enabled.
Approvals can be made and orders can be transacted while your employees are away from their desks – increasing the availability, speed and efficiency of their entire process.

5. Platform Standardisation for Global Availability. business-meeting_12lajosrepasi_i21-resized-600
There are many hidden costs in using third-party procurement products – from the expense of integration to the headaches of increased manual data-entry, cross-checking and reconciliation. By integrating P2P functions directly into your SAP system you deploy it to every employee with purchasing authority globally – meaning you can eliminate all of these third party costs in one go.

As you can see, Invenio’s P2P Solutions offers you the opportunity to do more than just shave a few more pounds from your supplier contracts – which is something most off the shelf P2P systems can help with. Invenio’s P2P Solutions actually re-engineers the way in which the process happens – so you can save in areas that you perhaps hadn’t even considered before.

Want to know more?

If this has sparked your interest and you would like to find out more about how Invenio’s P2P Solutions can help YOUR company save time and money, please email info@invenio-solutions.com or call our SAP Advisory Team on +44 (0)330 440 1800.