SAS INSTITUTE, DUN. & BRADSTREET EXPAND SUPPLIER RELATIONSHIP MANAGEMENT SOLUTION

SAS Institute Inc., and Dun & Bradstreet, have expanded the SA Solution for Supplier Relationship Management (SRM).

This solution can help organizations significantly reduce procurement costs and gain leverage over suppliers. SRM now includes enhanced analytic functionality, Web-enabled reporting, consulting services, and IBM hardware support, as well as an important element called Supplier Portfolio Optimization.

By consolidating and classifying purchasing data, SRM allows organizations to get a clearer picture of their supplier relationships. "Often, companies struggle with understanding their supplier landscape," said Henry Morris, Research Vice President for Data Warehousing and Information Access at International Data Corporation, located in Framingham, Mass, "They spend an enormous amount of time and money to get a handle on how much and what they buy. SRM helps companies identify their top suppliers, see how much they are spending with each supplier, determine how much a particular supplier depends on them for business, and figure out ways companies can leverage their buying power so as to improve business performance."

"Knowing these answers could result in savings of 5 to 15 percent of a company's total procurement spend," said Christine Kelly, SAS Institute's Program Manager for SRM. "This can translate into millions of dollars in savings for large companies. In this competitive environment, companies need all the help they can get to make the most informed business decisions."

SRM is based on an intelligent data warehouse that extracts, cleanses and transforms data from disparate procurement systems in preparation for analysis. The solution then identifies all suppliers with a Dun & Bradstreet's D-U-N-S Number, the globally recognized business identification standard that identifies every supplier in a company's database. This critical process permits companies to aggregate spend dollars across a corporate family to allow consolidation of buying power. It also identifies duplicate vendor entries.

Products and services are classified through the United Nations Standard Product and Service Classification (UN/SPSC), the recognized global standard for classifying goods and services for corporate and government purchasers. UN/SPSC is already accepted by leading corporate purchasing-card providers. These two universally accepted identification and classification standards provide companies with a clear picture of what they are buying and from which suppliers.

Using the cleansed and standardized data, SRM consolidates how much a company spends with a particular supplier and what it buys. It also determines a company's risk with a supplier and how its buying practices change over time. These simple questions are often difficult or impossible for large organizations to answer because the data is typically scattered across multiple systems. In addition, the data may be isolated in back-office systems of their subsidiaries or divisions.

A new component of SRM, Supplier Portfolio Optimization (SPO), uses this information to build a portfolio of suppliers. This portfolio is optimized to increase purchasing leverage by consolidating suppliers, while meeting constraints on supplier quality, demographics, diversification, and budget. The optimized portfolio and detailed purchase plans created by SPO support strategic decisions such as "How much should a company spend with a supplier? Who should it buy from? How should its buying practices change to achieve its strategic goals?"

Finally, SRM measures a company's procurement practices by scoring suppliers on the basis of type of service, quality, and turnaround time, and feeds that information directly into a supplier balanced scorecard.

"To realize the greatest profitability and efficiency, a company must understand and manage its relationships with suppliers," said Larry Barth, Vice President of Supply Chain Solutions for D&B. "The SAS Solution for Supplier Relationship Management allows a company to transform raw procurement data into strategic business intelligence in order to manage those relationships more effectively. Adding D&B's business information to this procurement tool is an important advantage."

Successful deployment of an enterprise solution depends on selecting a hardware vendor to provide the optimal platform. SAS Institute chose the award-winning IBM Netfinity server as the first platform on which to test the SRM solution.

"We are delighted that SAS Institute - and its powerful SRM solution - has completed validation and officially become a member of the IBM Netfinity ServerProven program," said Sandy Carter, director, PartnerWorld for Developers, IBM Netfinity brand. "With ServerProven solutions, customers can focus on running their businesses. ServerProven helps take the complexity out of configuring, installing and maintaining systems, and can improve reliability and availability." In addition, IBM offers SmoothStart services for the entire line of Netfinity servers to enable smooth installations and reliable implementations.

The companies are celebrating these enhancements with two customer events in October. The first is today at the Four Seasons Hotel in Boston; the second will be held Oct. 26 at the Paris Las Vegas Resort and Casino in Las Vegas.