1 Reply Latest reply on May 28, 2010 6:54 AM by Ryan Sammel

    Commodity Classification Improvement Process

    Gavin Pratt Journeyman

      We are just beginning an implementation of Spend Vis.  Learned some valuable information @ Ariba Live - specifically the first breakout session on Tuesday (Panelists from Bausch & Lomb, Heinz, & Rogers Communications).  I was interested to understand the classification improvement process in more detail.  When we open the doors to Spend Vis internally on day 1, I know the Ariba data enrichment process will get us off to a good start, but we discussed at a high level how future refresh cycles will improve classification.

       

      We have a spend analysis tool in place now, and classification is ok, but not great.  Users are quick to dismiss the credibility of the data if they see it miscategorized, but don't have the time/interest/ownership to provide line item corrections, and thus their satisfaction and trust in the data decrease. 

       

      First impressions are key. therefore I want to fully understand how the iterative improvement process will work.

      1) Is it the responsibility of the customer to identify line item changes?

      2) Does the automated enrichment process work better once more data is added?

      3) Are there spend thresholds that trigger more extensive automated DB crunching?

      4) Does Ariba dig deeper into the spend manually each cycle?

      5) Can an administrator modify classifications on the fly?

      6) I am sur eI could go on and on... so I'll just end with what else can you tell me? 

        • Re: Commodity Classification Improvement Process
          Ryan Sammel Apprentice

          Hi Gavin,

           

          I am the Product Manager for the Ariba Data Enrichment utility, that is used in classifications for Spend Visibility, sorry I missed you at Live. 

           

          1) Is it the responsibility of the customer to identify line item changes?  We don't recommend looking line by line to verify classifications, rather have the experts in certain commodities review the data in major suppliers, accounts, etc to validate classifications.  For one, you find people looking at very small invoices which in the big picture, will provide limited to no value.  Second, in most cases, you will find the data provided on the invoice supports the classification provided from Ariba, but the end-users may have a preference to see it as something else.  There may also be certain categories where you may need to assist on granularity due to your specific needs, so we recommend concentrating on those areas.

           

          2) Does the automated enrichment process work better once more data is added?  Our classification process does evolve as we see more of your data for refreshes, etc.  Your feedback is also valuable as it helps us gain insight into your preferences and needs. 

          3) Are there spend thresholds that trigger more extensive automated DB crunching?  Your contract will include an SLA on the amount of spend we will classify (typically at least 90%).  We concentrate on the top spend groups to meet the contracted SLA per customer. 

           

          4) Does Ariba dig deeper into the spend manually each cycle?  It is common that, as mentioned in #2 above, our automated tools will learn more about your data over refreshes, so we utilize them for consistency in the classifications.  We have also worked with customers in the past who have specific needs in certain areas to add granularity in the classifications.  If you find that this is a need, you can mention it to your Ariba Project Manager.

           

          5) Can an administrator modify classifications on the fly?  The Ariba Spend Visibility solution has an online classification feature that allows users to update classifications "on the fly" directly from the report that they are viewing.  The online feature is permission based, identifies conflicts, and has an approval process flow.

           

          6) I am sure I could go on and on... so I'll just end with what else can you tell me?  I recommend working with your Ariba Project Manager, as they are assigned to the customer for the life of the contract, they will get to know you and your data.  They are also experienced from working with many other customers who have similar concerns in the deployment phase, so they are a great source of knowledge.

           

           

          I would also be glad to talk to you directly if you would like, you can email me at rsammel@ariba.com and we can set-up some time.

           

          -Ryan