Vendor Management

Calculating value

US 2008 Election Campaign Spend Data – Part 02

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The first thing you want to do when you get some spend data is look at it grouped into meaningful categories. I typically categorise data using a 5-stage process:

Standard spend categorisation

  1. First, categorise every row as “Other”. (This allows you to claim that you have categorised 100% of your data and you’re only on step 1!)
  2. Second, categorise each row according to a GL/Category mapping table. (This ensures you get the tail spend.)
  3. Third, categorise each row according to a vendor mapping table for your significant vendors. (This ensures you’re not embarrassed by a PA who has for reasons unknown placed a KPMG invoice into “Kitchen Supplies”.)
  4. Fourth, categorise each row according to a mapping table for vendor and GL. (This ensures that you split your Staples spend into stationery and office equipment etc.)
  5. And finally, categorise each row according to key phrases in the description. (This ensures you pull out PWC legal spend from the Audit category.)

Categorising Campaign Data

Fortunately for me, the OpenSecrets campaign data is expense coded and a mapping table was posted to the OpenSecrets Google Group yesterday.

16-04-2009-101559-pm1

This allows me to change my Qlikview load script to include a second table that I have called expensecodes.csv. I make sure that my expense code column label matches the label in my spend data csv file (expends08.csv) and Qlikview does the rest.

Viewing Categorised Data

Now, I want to get a quick view of spend by SectorName and DescripLong (the 2-level categorisation assigned by OpenSecrets.

My preferred way to view this type of data is as a tree map:

treemap1

Creating the Tree map takes only a couple of minutes in Qlikview. We can see that Administrative cost is the single largest cost category running at about 25% of expenditure with Contributions and Transfers together comprising another 25%.

Drilling into the data

Qlikview’s speed of drilling down  into data (filter) is its biggest drawcard. By default, every chart you create is linked to the filters you select on any other chart. For example, if we are interested in seeing our spend v number of suppliers chart above for Internet Media, we need only click on the Internet Media square above and then view the chart.internet-media-suppliers

Now let’s look at the same chart for Print Media. We remove the Internet Media filter and click on Print Media.

print-media

Interestingly, you can see that the Print Media supply base is much more fractured than Internet Media. This is probably because, as the candidates start travelling faster from state to state, they start dealing with local Print Media suppliers in each state; whereas they can continue to deal with the same Internet Media providers.

Qlikview’s speed is impressive. We are looking at 2.9 million rows of data on a three-year old laptop computer. Each drill-down completes in under a second.

Written by hudgeon

April 16, 2009 at 11:17 pm

Posted in Vendor Management

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US 2008 Election Campaign Spend Data – Part 01

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OpenSecrets.org cleans and posts unclassified US political data. There’s lots of great data here including 2.9 million rows of third-party supplier spend data from the 2008 US election campaign.

I’ll pass over just how amazing it is that anyone with an interest in this data can access it immediately and access it for free but I encourage you to pause and consider how much the world has changed in the past 15 years.  On to my purposes for accessing the data:

It is the perfect data set for testing Qlikview, the winning BI software in Aberdeen’s recent Axis report (Qlikview will send you the report – Registration required).

Over the next week, I’ll describe my experience with Qlikview and illustrate the results using the campaign spend data.

1. Loading the data

The first thing you need to do with a data set is get it into whatever tool you’re using to analyse it.

Qlikview is the best tool I’ve used for loading large data sets. In less than 4 minutes, Qlikview slurps in the 2.9 million rows of data and you’re ready to start analysing.

2. Running reports

The first report I’ve run is to look at the spend per month compared to the number of suppliers used per month. The chart below shows that both the spend and the number of suppliers increases dramatically in the 4 months leading up to the election. The convergence of the lines indicates that spend per supplier is increasing significantly as well which may indicate a fattening of margin in addition to an increase in transaction volumes. Unsurprisingly, this spend decreases quickly in November and December once the TV ads stop airing. Note that the chart below uses two axis with spend on the left and count of distinct suppliers on the right.

spendvdistinctsuppliers1

Tomorrow, I’ll discuss Qlikview’s real differentiator: drill down capability that replicates the speed of running queries against a spend cube without the pain (and forward planning) involved in building a cube.

Written by hudgeon

April 15, 2009 at 11:42 pm

Business quote of the week » 20 Years of GameBoy

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After the big GameBoy success there was an era, that did not felt really Nintendo. Namely GameCube and early N64. It seems that also lead developer, senior managing director and legend Shigera Miyamoto felt somehow unfamiliar during the “GameCube era”. He said:

“There was an era when Nintendo was going in the direction of doing the same things other companies did. The more we competed with new companies entering the market, the more we started acting similar to them. But is being number one in that competition the same as being number one with the general public? That’s the question we had.”

via » 20 Years of GameBoy Digital Tools – Game Design, Computer Art, Homebrew and Colorful Entertainment..

Written by hudgeon

April 6, 2009 at 9:51 pm

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E-Sourcing: Destroyer or Doyen of Value

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Tim Cummins from the IACCM has questioned a recent Supply Excellence article on “E-Sourcing Activities & Supplier Relationships: A Match Made in Purchasing Heaven” asking “E-Sourcing: Does it destroy value?

Tim’s objection is that buyers use auctions to impose terms on suppliers rather than engage in dialogue.

As a data guy, I’m a big fan of auctions because they provide a controlled environment to collect and disseminate information – sellers see what their competition is willing to do and buyers get an overview of the market.

Nevertheless, I agree with a lot of what Tim says because auctions create information flow in only 2 of the 3 possible directions. Data flows from supplier to supplier and from supplier to buyer but it does not flow from buyer to supplier.

This can create a situation that I will call the Incumbent’s Curse. It’s the other side of the coin from the Winner’s Curse. In the winner’s curse, the winning respondent in a tender finds that, in the heat of the auction, they have paid way too much. In the Incumbent’s Curse, the incumbent supplier cannot win the tender because they know how damn expensive this buyer is to service.

Imagine a supplier who delivers products to offices. In the spec in the tender, the buyer has not mentioned that it takes 30 minutes to get through security and that deliveries can only take place between 7:30am and 8:00am. The incumbent knows this and knows that this adds 1.5% to the cost of servicing the contract. The other respondents do not know this and have a 1.5% “advantage” in the auction. The incumbent loses the contract. The winner unwittingly shaves 1.5% from their margin.

Perhaps we need an auction facility that encourages a three-way dialogue.

Written by hudgeon

April 2, 2009 at 9:49 pm

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Chinese BPO capability, shadow banking and climate change

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  • 13:12:30: Secret weapon of the Chinese BPO industry “Because their customers are Chinese they [have no] labor cost differential.” http://bit.ly/TIHuP
  • 13:17:26: reportonbusiness.com: Reviving the shadow banking system “I highly recommend we put brakes on it” http://bit.ly/r4n06 Yep.
  • 23:01:18: Dyson on climate change: “inductive science is of limited utility when the object of study is an extremely rare event” http://bit.ly/oYGlD

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Written by hudgeon

March 30, 2009 at 1:01 am

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Startups, global sourcing and supply chain ownership

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Near sourcing startups

  • 20:15:27: The Pros of Planting Startups in Smaller Cities – BusinessWeek This will be a long term trend, I bet. http://bit.ly/yX5K

The important factors in supplier selection

  • 20:27:54: The…fall of global sourcing “market prices, expected quality and supply chain flexibility [matter]“. Location does not http://bit.ly/un7H

Supply chain ownership

  • 21:12:04: Fabindia Weaves in Artisan Shareholders – BusinessWeek http://bit.ly/DAl7T Joint supply chain ownership – great to see this implemented!

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Written by hudgeon

March 29, 2009 at 1:01 am

Time management, crowdsourcing and patents

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Time management

  • 22:27:42: Review:The Age of Speed http://bit.ly/Py7eu Don’t read books on time management. Just stop doing anything that doesn’t lead to your goal.

Patents v. markets

Crowdsourcing

  • 22:42:02: Jeff Howe on Crowdsourcing http://bit.ly/cWsiH The fickleness of the crowd is the biggest hurdle to cross in crowdsourcing.

Entrepreneurship

  • 22:44:29: MIT Sloan Mgmt Review “notes the importance of … testing ideas rather than becoming attached to them from the start.” http://bit.ly/NSsiI
  • 22:51:55: Startup “rather than…trying to overcome all obstacles…think about the entrepreneurial path as…testing hypotheses” http://bit.ly/WhLz8

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Written by hudgeon

March 25, 2009 at 1:01 am

Trade wars and infographics

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Global Financial Crisis creating Trade War

  • 21:37:45: GFC Trade War? “… G-20 nations have collectively enacted 47 trade-restricting measures” http://bit.ly/14uthF Surprised? Not at all.

Great infographic

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Written by hudgeon

March 24, 2009 at 1:01 am

Open source procurement, housing and the optimisation bake-off

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Open source procurement

  • 21:36:06: “The Strategic Sourceror: Government Goes Open Source – the Wrong Way.” http://bit.ly/3IbTn
    I disagree with this article.
  • 21:37:57: SS says “US Government could [not] be … the poster child for best practices … so I am not very excited about seeing the final products.”
  • 21:39:56: But why couldn’t they be? There’s a lot of people in the US govt. Surely some must be doing something right! Why write them off so glibly?
  • 21:45:12: SS contrite comment: “Perhaps I was being a bit rough … a step in the right direction is better than nothing at all.” http://bit.ly/7vUI6

US Housing Crisis

  • 22:04:19: Solving the US Housing Crisis “give foreigners who…come to the US and buy a home … a [green card]” http://bit.ly/14cRew Why not?

Risk v. Stability

  • 22:08:59: Taking Risks Is More Important than Stability Right Now – BusinessWeek http://bit.ly/GoSdE Are these opposite business states? I think not.

Divvying up Equity in startups

  • 22:13:18: Seth’s Blog: Advice on equity “A friend asked me to help him … split the equity in a [startup] company.” http://bit.ly/ubiIj Great advice

Cloud computing: Making technology available to the masses

  • 22:29:54: HowTo: EC2 for Poets “The easier it gets, for more people, the more interesting things we’ll be able to do, together.” http://bit.ly/r7S0e

Importance of incentives

  • 22:36:08: Thank you netbooks! Microsoft placed in an environment where they are motivated to deliver what we need. http://bit.ly/6EUoL

Spend optimisation bake-off

  • 22:51:37: SpendMatters: Let the Optimization Bake-Off Begin! http://bit.ly/Fofta This is the best use of the new media I’ve seen in Procurement!

AMEX and Harbour Payments

  • 22:57:43: SpendMatters: Amex: No Safe Harbor http://bit.ly/cKVk This seemed like such a good idea two years ago. Why can’t AMEX make this work?

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Written by hudgeon

March 23, 2009 at 1:01 am

Marketing, Procurement and Sustainability

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Marketing and procurement

  • 21:28:49: Finextra: ING launches pension peer comparison Web tool: http://bit.ly/lKc7w
  • 21:26:00: There’s unacknowledged cross-over between marketing and procurement. INGs app shares common features with supplier comparison apps.

Corporate sustainability reporting

  • 22:01:14: Corporate Sustainability Reporting: The Executive Disconnect But there’s a major gap between understanding and action, according to a survey released this week. http://bit.ly/3Y55HP
  • 22:03:28: Survey says 90% executives say sustainability reporting is important. 50% say they do it. My bet: 10% actually do it. http://bit.ly/3Y55HP

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Written by hudgeon

March 20, 2009 at 1:01 am