Discussing Analytics in Procurement

When a user chooses a KPI tile, an evaluation is launched. It is possible to break down the information shown for the individual KPI into more details by using the drill-down capabilities and the appropriate actions that the tile offers. This is often referred to as Insight to Action. These KPI tiles use the SAP Smart Business Runtime environment, which is enhanced with smart controls such as smart filters and smart charts.

When a user executes a Smart Business KPI app, the default input parameters for the smart filter for the KPI are displayed in the filter bar. An example is display currency EUR and the relative date function showing today's date plus two weeks. It is possible to show or hide the filter bar itself using the option Expand Header or Collapse Header. More filters can be added using the Adapt Filters button. The smart filter functionality then provides the user with a list of all possible filters for the Smart Business KPI in question.

The Add Filter button provides the user with the possibility of adding an additional restriction (filter) on top of the filter already used for the current evaluation.

An example based on the Purchase Order Value and Scheduling Agreement Value KPI: A user wants to evaluate the purchase order value for the previous year until today's date for purchasing organization 101C. They have added the purchasing organization as a smart filter and entered the value 101C. The resulting evaluation shows purchase orders from three purchasing groups (Group 1, Group 2, and Group 3). If the user now adds the Purchasing Group filter, exactly these three purchasing group values are proposed and the user can choose which one to use as an additional filter for the current evaluation.

The option Show/Hide Mini Charts allows a user to view the configured mini charts for the current evaluation. The visualization of these mini charts depends on the format selected. If numeric, the mini charts display the defined threshold values and the relevant details. If the mini chart is related to an associated KPI, the relevant page is displayed. There’s no impact on the mini charts if the user changes one of the filters.

The option Smart Chart allows a user to display the dimensions and measures selected in the chart view or tabular view. It allows a user to select a chart type and change the dimensions and measures of the chart. The charts are then rendered instantly. The toolbar on the chart offers a user the following functions:

• Drill-down/drill-up

• Show or hide legends on the chart

• Zoom in and out of a chart

• Settings: This screen allows a user to select a different chart type for the defined dimensions and measures. It is also possible to select a different dimension. The Show Selected/All button enables a user to view the defined dimensions or all of the dimensions available in the data source.

  The Sort column allows sorting by ascending or descending data values. When the data is analyzed in the tabular view, the columns will be sorted accordingly. The chart rendered changes immediately when settings are changed.

• Select various chart types

• Display in full screen mode

• Export to a spreadsheet

• Switch from Chart View to Tabular View and vice versa

All of this helps a user to easily identify exceptions. If a KPI turns red when certain defined thresholds are exceeded, the user can act instantly and try and resolve the related business issues by seamlessly navigating from the analytical application to the relevant transactional application and back again.

Below are some examples of more general SAP Fiori apps available in the area of procurement analytics:

• Purchasing Group Activities:

  This app displays all purchase orders, contracts, goods receipts, scheduling agreements, and invoiced amounts for a particular (selection of) purchasing group(s) for a given time frame. Only those business documents that are completed and items not released are considered. Deleted items are not considered. Besides the total invoice amount, the purchase order net amount is also shown.

• Off-Contract Spend:

  You can use the Off-Contract Spend app to analyze the total spend amount in relation to purchase orders that do not have a contract reference over the previous year to date. For some items, no negotiated pricing or blanket purchase agreement is in place when they are purchased. These items are defined as non-contract purchases. You can use this app to measure the percentage of purchases made without any contract.

• Non-Managed Spend:

  With the Non-Managed Spend app, you can determine the amount (without taxes) paid to the suppliers without a purchase order reference in relation to the total spend for suppliers. The calculation is based on the accounting documents.

• Purchasing Spend:

  With the Purchasing Spend app, you can compare the spend for a given set of comparison filters to the total spend. Filters include supplier, material group, purchasing group, supplier country, and purchasing organization. This app can be used to compare the purchasing spend between the total spend of a data set with a sub-set of that data set by using the comparison filters.

• Spend Variance:

  With the Spend Variance app, you can determine the sum of the purchase order value, goods receipt value, and invoice value by supplier or material. The app then calculates the relation between the purchase orders, good receipts, and invoice value for a given filter.

Apps in Procurement Analytics specific for contracts include the following:

• Contract Expiry:

  You can use this app to identify purchase contracts that expire within the specific time frame. You can also use the app to find the number of expiring contracts, the target amount, and the released amount of the expiring contracts.

• Unused Contracts:

  You use this app to identify the number of contracts not used over the previous year to date. You can also find the target and released amount of the unused contracts.

• Contract Leakage/Last 365 Days:

  With the Contract Leakage app, you can identity the spend of purchase orders that do not have a contract reference, although an existing contract could have been used. As a purchaser, you want to find the related net value. You can use the Contract Leakage app to determine the amount of purchases made without considering existing contracts.

• Quantity Contract Consumption:

  This KPI displays the consumption percentage of quantity type contracts from the previous year to date. Using this KPI, you can find the target and released quantity of the contracts.

• Value Contract Consumption:

  This KPI displays the consumption percentage of value-type contracts from the previous year to date. Using this KPI, you can find the target and released amount of the contracts.

Apps in Procurement Analytics specific for purchase requisitions include the following:

• Purchase Requisition Average Approval Time:

  This app is used to identify the time (in days) from shopping cart creation to purchase order creation, over the time period from the previous year to the current date.

• Purchase Requisition Item Changes:

  This KPI calculates the absolute number of item changes from the previous year to the current date. It also shows the number of price changes, quantity changes, purchasing group changes, and supplier changes, and the total number of purchase requisition item changes.

• Purchase Requisition Item Types/Central Purchase Requisition Item Types:

  This app is used to identify the number of free-text items created in the time period from the previous year to the current date. The requisitions for which a material was specified are shown as number of material items created at the time of creation. Similarly, the number of material items, free-text items, and catalog items created using the SAP Fiori app are also shown in the application.

• Purchase Requisition To Order Cycle Time:

  This app is used to identify the average cycle time in days from shopping cart creation to when the purchase order is sent to the supplier, from the previous year to the current date.

• Purchase Requisition No Touch Rate:

  This KPI displays the percentage of purchase requisition items which are processed automatically from the shopping cart. This is called the No Touch rate. It is displayed as a percentage and covers the time period from the previous year to the current date. The KPI also calculates the High Touch and the Low Touch rates. The Low Touch rate refers to those items for which approval is required, but no changes are made in either the purchase order or the purchase requisition after creation. The High Touch rate refers to items that require manual changes to the purchase order or the purchase requisition after creation. The rates are calculated as a percentage of all items.

Apps in Procurement Analytics specific for purchase orders include the following:

• Overdue Purchase Order Items:

  With this app, the number of purchase order items with delivery dates in the past and those yet to be delivered are calculated. It is also possible to use this app to analyze the delivery dates of purchase order items sent to a supplier.

• Purchase Order Value:

  This app can be used to determine the current value for all purchase orders within a stipulated time period. The app also helps to determine the KPI value of the purchase orders for a given set of filter criteria, such as materials, supplier, and plant.

• Purchase Order Average Delivery Time Weighted (in Days):

  The app is used to analyze the average delivery time of suppliers based on the delivery times of the previous purchase orders (weighted).

All KPIs are delivered with predefined date functions. If a company requires additional date functions, then these can be created using the Manage Date Functions app.

Date functions can be defined using single values or using date ranges. Date functions use a base date and can be calculated using a free number of days, weeks, months, quarters, or years. These can be either in the past or in the future.

After saving a date function, it can be used in a KPI analysis. If a user wants to use a certain date function as the default date function, they can save their evaluation with that date function as a new tile and add this tile to one of the tile groups present on their SAP Fiori launchpad home page.