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Executive Summary

When the 42nd largest US Corporation seeks spend visibility across all its worldwide business units, one of the most crucial steps is to have a supplier intelligence system in place. ITWorx implemented UTC Data Management System; a robust, automated ETL solution that unifies the format of spend data files from different source systems across UTC business units; enriches and classifies the data of suppliers and commodities; and then represents output KPIs on an advanced dashboard for spend monitoring and control. The results? Enterprise agility, cost control, and higher profitability.

The Customer

United Technologies Corporation (UTC) is one of the world’s leading high‐tech companies with a long history of pioneering innovation in aerospace, aviation, helicopter design, climate control, elevator design and hydrogen fuel cells. UTC is composed of a number of major business units ‐ Pratt & Whitney aircraft engines, Carrier heating and air‐conditioning systems, Otis elevators and escalators, Hamilton Sundstrand aerospace and industrial systems, Sikorsky Helicopters, UTC Power, and UTC Fire and Security. UTC employs over 225,600 people, operates in more than 180 different countries and is the 42nd largest U.S. Corporation. In 2007, UTC revenues were in excess of $54.8billion.

The Challenge

A very busy and continuously growing global player like UTC is basically concerned with keeping its costs under stringent control. A crucial part of this is where the money is spent, for what reason, to whom, and how much. With so many lines of business, product groups, and suppliers, there were multiple hurdles that blocked accurate spend visibility.

UTC had a number of spend visibility systems in place. However, they were not centralized and they didn’t cover data across all UTC business units. The format of existing spend data files themselves was inconsistent, and the time consumed by IT staff in conforming data files formats and uploading them into the spend visibility systems was humongous.

An equally serious issue was the lack of accuracy in suppliers data. With UTC worldwide business units and sites, one supplier could be logged as more than one entity, just because its name was recorded differently in each transaction. Moreover, the categorization of commodities in the supply chain was not clear or properly classified.

UTC needed a central spend visibility system to cover, monitor, and manage spend across all its business unites. The system would automate and accelerate spend analysis life cycle, reduce the dependency on IT staff, establish ownership of spend data, and provides actual size of spend per supplier and commodity.

The Solution

ITWorx implements UTC Data Management System, a robust, automated ETL solution that streamlines UTC organization‐wide spend data. The system automatically handles and unifies extracted data from multiple file formats; consolidates and uploads files; analyzes and corrects suppliers and commodities data; and finally represents the output on a central unified dashboard for spend monitor and control.

Receiving submitted spend data files from different source systems across UTC business units, the system uses a robust ETL to extract and unify data from multiple file formats according to preset file specifications. Being scalable, the system then automatically extracts and uploads the data from an unlimited number of files regardless of their size or format.

To create supplier intelligence, a major step is to enrich suppliers data by cleansing and refining. UTC Data Management System integrates with “Correct Address”, a third party system, to verify and standardize the once manual and erroneous process of gathering supplier address and information. The solution starts by matching and mapping supplier information with the ones existing in master files. In case of inaccurate results, supplier information is further verified, standardized, and normalized using fuzzy logic techniques of SQL Server 2005.

Accurate categorization and classification of commodities exchanged is another factor in a successful supplier intelligence equation. ITWorx integrates its solution with “Zycus AutoClass”, another third party system, to automatically classify and categorize products within the spend data files extracted from source systems. With each item in the system having a unique commodity code, calculated spend is more accurate and generated reports are richer. The design of ITWorx solution is open and can integrate with other third party systems of more expandability and profitability.

Over an advanced dashboard, the system provides color coded KPIs to monitor, track, and manage the accuracy and coverage of the data collected at each stage of system activity, such as: loading, validation, address correction, supplier matching, commodity classification, and an overall KPI.

The solution uses LDAP to assign an IT responsible person as well as a functional owner to each data feed. From the dashboard, authorized users can drill down the records with questionable KPIs. To resolve, they either upload the files causing errors for fix‐up or approve the files and held accountable accordingly. From the dashboard, data can be exported to reporting and further data analysis.

The Benefits

Enterprise agility
With the hurdles of inaccurate, incomplete data; manual intervention for error checking and validation by IT staff; and stringent conditions for spend files handling; the on boarding process of spend data for a new business unit becomes lengthy and consumes up to months. With UTC Data Management System, the onboarding process is drastically accelerated. ITWorx robust ELT solution automatically uploads, extracts, unifies, analyzes, and verifies spend data. Using preset KPI thresholds, the spend data analysis output is represented on a central dashboard for monitoring and control purposes.

Spend visibility
A sound supplier intelligence solution like UTC Data Management System revamps the process of filtering and standardizing supplier information as well as commodities classification. The cleaned up data along with the accurate mapping between suppliers and commodities provide a crystal view of actual business size with each supplier. Management can identify the real value add of a supplier by comparing their service quality to what they are paid. Management can use the supplier intelligence findings to negotiate better contracts or sign‐in new suppliers.

Cost control
With streamlined on boarding process, measurable spend data from different systems across UTC business unites, cost control is seamless. IT staff time is no longer wasted in consolidating dispersed, inaccurate, and messy data. Accelerated and automated life cycles of spend ensure that UTC leverages the demands of its dynamic business environment; building on accurate and up‐to‐the‐minute spend information. Management can detect questionable spend data patterns and hold the responsible accountable.

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