Hoping to capitalize on the sorry state of the enterprise to view it own spend data, MasterCard Advisors the professional services division of MasterCard International Inc., will launch this week Purchase Logic, an enterprise spending analysis tool.
Following the initial data gathering phase which is entered into the Purchase Logic software, the second and third phases would use MasterCard Advisors professional services to create an implementation roadmap and in the final phase initiate the recommended changes.
The Purchase Logic Software aggregates purchases by vendors, analyzes the payment methodology, procurement methodology, and spots such low-hanging fruit as whether or not the company is taking advantage of available discounts and if they are using paper based systems when an electronic purchase or payment system would reduce costs.
According to Leslie Doty, senior vice president and global practice lead for MasterCard Advisors, what makes the Purchase Logic software unique is its ability to look across the entire enterprise. In a majority of companies spending data remains in separate silos within departments and divisions, Doty said.
"We worked with a Fortune 5 company and saved them over US$30 million through supplier consolidation, strategic sourcing, taking discounts and moving to the best method of payment," said Doty.
About 90 percent of the data comes from accounts payable files.
"We collect all the information and slice it and dice it however a company is structured from a division basis to ID opportunities," said Doty.
MasterCard Advisors may indeed be tapping into a wealth of corporate ignorance about how they spend, who they spend with, and how they pay. Less than 50 percent of all companies have the ability to view spend data on a global basis, according to Chris Sawchuk, senior business advisor with the Hackett Group.
"It is an area where there is not much difference between world class and median companies," Sawchuk said
"It's a real market opportunity for MasterCard," said Sawchuk, who pointed to Hackett Group statistics that say mid-sized companies have as many as 7,800 different suppliers per $1 billion of spend and companies rated as world class still have about half of that.
Evren Bayri, director for credit advisory service, at the Mercator Advisor Group said the MasterCard Advisors solution is unique in that it aims to gather information from all types of payments, not just credit cards, checks or cash.
"It gives the purchasing manager a real overview of payments," said Bayri.