Embedded Analytics – Making the Right Decision

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Think back to the last big purchase you made. Maybe you bought or rented a home, purchased a car, or chose a new computer or mobile provider. If you’re a smart shopper, you considered your decision from many angles: Does the product or service meet my needs simply and elegantly? Is the manufacturer solid and reliable? Will my choice serve me well into the future?

We face similar questions when we decide on a third-party vendor to embed technology in the apps we build: Is the technology powerful enough? Is it easy to embed? Will the vendor be around in the future? Will the technology evolve and improve as my needs – and those of my customers – change over time?

Elcom International faced such a decision almost a decade ago. Elcom’s software product, PECOS, digitizes the procurement process; Kevin Larnach, the company’s Executive Vice President of Operations, describes PECOS as “Amazon for business,” with extensive controls and business process integrations required by leading governments, utilities, businesses and healthcare providers. More than 120,000 suppliers provide products in PECOS through Elcom’s global supplier network, and PECOS is used by more than 200 organizations worldwide to manage more than $15 billion in total spending annually.

Elcom decided on Actuate to provide the analytics for PECOS. Thanks to embedded analytics, PECOS  users avoid and reduce costs, get visibility into all aspects of the procurement process for oversight and audits, and reduce risks from rogue purchasing, off-contract purchasing, and slow, manual record-keeping. Larnach says embedded analytics has helped one PECOS user, the Scottish Government, accrue more than $1 billion in audited savings over the past seven years.

Larnach told Elcom’s embedded analytics story in a recent free Actuate-sponsored webinar. He shared the virtual stage with Howard Dresner (@howarddresner), Chief Research Officer at Dresner Advisory Services and author of the Embedded Business Intelligence Market Study, published in late 2014. An on-demand replay of the webinar is now available.

Dramatically Changing Requirements

As Elcom added features and capabilities to PECOS over the last decade, and as its user base grew, the decision to embed Actuate’s analytics technology has been vindicated. “We’ve been able to work with [Actuate] as a sole vendor,” Lernach says. Actuate “satisfies all of our embedded BI requirements, which have changed dramatically over the years.” Larnach used this graphic to show how the capabilities in PECOS and Actuate’s analytics capabilities grew and evolved together.

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At the base of the pyramid we find basic transactional reporting. “Most of the embedded reporting and embedded analysis that we offered in early stages of our relationship [with Actuate] centered around transactional reporting,” Lernach says. This reporting isn’t limited to summary information; it includes line detail for each and every purchase. Accommodating user requests, Elcom built an extensive library of templates, forms and business documents with embedded analytics into PECOS.

The ability to provide consistent, repeatable analysis led Elcom’s customers to want more; specifically, they wanted to perform periodic analysis of their procurement data. (That’s the second layer up on the pyramid.) The request made good sense; after all, PECOS tracks details of every transaction, and therefore creates an audit trail that begs for analysis. “Embedded BI provides analysis against those audit trails,” Lernach says, which both helps organizations uncover waste, fraud and abuse and also drives improved user behavior that locks in savings and efficient business processes.

This ability to provide ongoing analysis has led to Elcom adding trend analysis and key performance indicators (KPIs) to PECOS – the third layer on the pyramid. Demand for those capabilities is growing among PECOS users, Lernach says. “We’re starting to do [dashboards and charting] as a standard feature of our software,” he explains, which leads to the tip of the pyramid: one-off analysis.

“I see [one-off analysis] as a huge growth area for our organization, especially for customers who have been with us for many years,” Lernach says. Those customers have large volumes of transactional data to analyze – a full terabyte of data, in the case of the Scottish Government – and they want to eke out every bit of savings from that data that they can find.

“When you take on a solution like ours, there are big savings areas up front because it’s a dramatic change from manual business processes to electronic ones,” Lernach explains. “But over the years, as you use [PECOS] and look for continuous improvement, it becomes more and more difficult” to find savings. But that’s exactly where one-off analysis capabilities now in PECOS help uncover “hidden gems,” Lernach says – such as a hospital system that saved hundreds of thousands of dollars by consolidating procurement from 11 types of latex gloves to three. “That could only be uncovered by the type of analysis that’s available through advanced BI tools – and some smart people, obviously,” Lernach says.

Check out our free webinar to hear more about how Elcom uses embedded analytics in PECOS, and learn more about the powerful e-Procurement solution on the Elcom website. It’s the right decision.

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“Decide” image by Matt Wilson.

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