© 2015 IBM Corporation

Most Innovative use of Technology

Supplier IQ

Barry Ward, FCIPS

Global Procurement Brand Manager

21st January 2016

© 2015 IBM Corporation

Most Innovative use of Technology - Supplier IQ

� Who made the decision to submit the entry and why?

– Ultimately it was IBM’s CPO, Bob Murphy, but this followed recommendations from our

solution development and transformation team

– The team felt it was a strong contender

� What is it you think you did specifically that made your entry successful?

– …” showing how technology can bring together disparate data effectively in an enviable

toolset”

– … “Innovative use of Agile methodology..”

– …” A good insight around how to solve a critical issue around supplier data, very good clear objective”

– …” I like the fact you can aggregate external and internal data, also the simplicity of use based on clear data which are gathered : the scope is narrow which makes it

simple”

– “ very well written, very well thought out and executed”

– “ very good example of technology use to deal with big data challenge and not only

streamline data but translate it into information.”

– “Great idea - to design an application to gather and sort data on suppliers that existed

internally and externally to make judgments about using them “

2

© 2015 IBM Corporation

The challenge faced in procurement…

� Procurement departments are being

asked to do more with less

� Multiple types of data in numerous

different systems means users must

run multiple reports to get a overall

view of required information

� Ad hoc approach to market analysis

and relevant news insights

� No common approach to gain

knowledge across the supply chain

organization, leading to inconsistent leveraging of information

� Routine tasks and lookup of

information can be cumbersome

� Low usage of advanced analytics in most procurement organizations

Industry Data

Invoice Data

Pricing Data

Market Data

Inventory Data

Financial Data

Sales Data

Performance Data

People Data

Types of Data

� Fatigue & overly busy work days compel

some procurement employees to not

repeat or update analysis as frequently

as needed, increasing supplier related

risk

� Broad scope perspective on suppliers is

missed because fusion of data sources

can be overly time intensive

Common current state…

3

The big challenges…

CONFIDENTIAL

Add internal data sources, Emptoris and others

Incorporate valuable external data sources to build supplier profiles

Align with internal procurement and risk management practices

Business Vision1

Vision Components2

Supplier IQ: Solution Overview

Objective3Demonstrate the ability to perform in-depth supplier assessment ensuring viability and strategic direction as a continued source of supply

A B C

Solution Components

Data Sources Triggers

User Interface User Population

Reporting

Create a Supplier 360 tool to target new/existing supplier opportunities based on information from news, analyst and financial reports, and internal data sources.

$

$

$

Supply Base

4

© 2015 IBM Corporation

What is Supplier IQ (aka Watson Corporate Intelligence?)

5

A big data and analytics cloud solution to improve employee productivity and decision making

� Real-time data aggregation into a single dashboard

� Internal & external disparate data sources

� Structured & unstructured data regardless of format

� Applies analytics and derives intelligence from hidden trends

� Mobile

� Comprehensive company profile assessment

� Competitive KPI financial benchmarking assessment

� Unstructured news classification into strategic themes� Cognitive: Machine learning, Natural Language Processing

Fundamentally changing how Sourcing Professionals consume and exploit data

Deliverables:

We establish a detailed 360° view of a company to perform an in-depth company assessment

6

Company Overview

� Firmographics

� External / internal data sources

Company Financial Performance (5 yrs)

� Key Performance Indicators

� Infographics to view trending

IBM Revenue

� Overall Revenue and Services subset for trending (Sell-Side)

IBM Spend

� Overall supplier spend with multiple filtering capabilities (Buy-Side)

IBM Contracts

� 20+ data elements to the Buy-Side contracts

IBM Contacts

� IBMers sourced from internal data sources

Supplier Contacts

� Sourced from internal and external data sources

We apply automated analytics to instantly yield competitive financial benchmarking and a cognitive solution for strategic news themes

7

Auto Peer Group creation

� Creation based on upon the profile of the targeted company

Peer Benchmarking

� Five scoring categories based on industry specific KPIs

Relationship Bubble Map

� X axis = KPI categories

� Y axis = Size & Growth

Performance Gaps

� Easy visualization of gaps between selected companies to each KPI

History of Financials

� Ability to view KPI information of the targeted Company’s peers without having to perform their full assessment

Strategic Intent

� Cognitive machine learning capability, utilizing natural language processing, to filter unstructured news into specific strategic news themes

We’ve implemented multiple customization options giving End Users significant flexibility to their individual assessments

8

Financial Performance KPIs

� Selection of 46 KPIs to chose from

Filtering capabilities

� Multiple opportunities for detailed filtering (e.g. IBM Spend)

Personalized Alerts

� User selected criteria

� Based on single or group of companies

� Based on a single or multiple Strategic Intent categories

Supplier Books (pdf)

� Entire company assessment downloadable (tailored to the Users specific output)

S&P Financial Statements download

� Key statistics� Income statement� Balance sheet� Cash flow

My Lists

� Personalized Lists of companies - easy to create, modify, and share

� Utilized to perform benchmarking analysis anytime

� Utilized to create personalized alerts

© 2015 IBM Corporation

Voice of the customer: - some endorsements from key stakeholders & procurement users

“..this is amazing. It is a very helpful tool in analyzing the supplier and will help immensely the process of supplier selection.”

“..great tool, something that will elevate our ability to provide quick supplier data, briefings, and financials.. This has been

done manually for decades.”

“..excellent. This great tool helps increase productivity and enable us to act with speed.”

“Wonderful.. the beauty is one-stop shopping for supplier info.”

“..fabulous.. the right tool for the challenging times we are facing… helps us be more efficient and productive.”

“..a significant accomplishment, in that it removes a great deal of the pain in compilation of information.”

“..state or the art tool, greatly simplifies our tasks.”

“..great initiative, uses Big Data analytics to drive a strategic view of our suppliers..

Fantastic!”

9

Note: 1,300+ users at IBM as of Q4 2015

“.. Supplier IQ is a game changer there is no doubt about it. The improvements it brings to procurement to enable a full and virtually instantaneous supply base understanding and management are incredible. The

buyers of today's generation in IBM will wonder how their predecessors coped before Supplier IQ !"

Bob Murphy, IBM CPO and Vice President

“..Supplier IQ has instantly enabled IBM to have a significantly improved view of its' current and potential supply base. This gives our sourcing teams much improved assurance in their supplier selection and management activities which combined with our social listening, and business continuity algorithms will help to predict risk of supplier failures impacting the supply chain of IBM and that of our customers."

Katherine Eason, CFO, IBM Global Procurement

© 2015 IBM Corporation

What winning the Award has done for you/your team ?

� Helped spotlight this tool and enabled the development

team to receive further recognition internally

� Boost to procurement morale

� It has given IBM Procurement renewed focus to look at

other parts of our Source to Pay process framework to

see if we can utilise this technology elsewhere

� Our Watson team have commercialised the product, so

it is now available to customers

10