Increasing Visibility of Indirect Spend For Global Savings Opportunities

Opportunity

Global procurement within an international sports apparel company knew they needed to increase visibility of their indirect spend. Their current process provided limited granularity, allowing data reporting at the vendor level but not at the transaction level. Moreover, the category structure used to bucket the goods and services; which support their business, differed between the company’s geographies. The company knew that aligning the category hierarchy down to the lowest level and then applying discrete transactional data would allow greater spend reporting and elucidate savings opportunities globally. 

To standardize and adopt best practices, the client wanted to leverage the United Nations Standard Products and Services Code (UNSPSC), an open, global, multi-sector taxonomy that utilizes an 8-digit code. However, successful implementation needed high stakeholder engagement across several groups. Stakeholders included: 

• Strategic Sourcing Managers who relied on the accuracy of category data in order to make informed decisions about vendor partnerships. 
• Technical Product Managers who relied on accurate data mapping tables in order to implement the solution across each procurement system. 
• Procurement Analysts who relied on valid transactional tags in order to provide accurate spend insights in real-time. 

Solution

To implement the new category data and unlock analytics and reporting value, Pepper Foster led and program managed a global team across procurement. Representatives from each of the geographies plus primary procurement categories met weekly during a 4-month intensive project. Altogether, the initiative carried three primary objectives: 

• Drive alignment of global procurements 3-level taxonomy
• Map the lowest level of UNSPSCs to the lowest taxonomy level to prepare for the future state
• Map existing vendor data to the lowest taxonomy level to bridge the gap from the current state

Outcome

The global procurement team aligned on their new category taxonomy with 95% confidence. Through weekly team meetings and workshops, Pepper Foster revealed that the remaining 5% was left unaligned due to significant dependencies on alternative parts of the business outside of procurement’s scope. Additionally, Pepper Foster was able to successfully map 19,500 UNSPSCs to global procurement’s lowest taxonomy level and 333 active vendors to the lowest taxonomy level. Collectively, this created a digital blueprint that was shared with the procurement technical product managers. Moving forward, global procurement now possesses critical information for prioritizing the implementation of transactional category data across each of the 13 procurement invoicing systems and unlocking crucial data insights to support strategic decision-making.