MasterCard launches Purchase Logic tool

MasterCard launches Purchase Logic tool

The professional services division of MasterCard International, MasterCard Advisors, 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 suppliers, analyses the payment methodology, procurement methodology, and 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. 

Leslie Doty, senior vice-president and global practice lead for MasterCard Advisors, said 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, he said. 

"We worked with a Fortune 5 company and saved them over $30m through supplier consolidation, strategic sourcing, taking discounts and moving to the best method of payment," said Doty. 

About 90% 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 be tapping into a wealth of corporate ignorance about how they spend, who they spend with, and how they pay. Less than half of all companies have the ability to view spend data on a global basis, said 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. He pointed to Hackett Group statistics that say mid-sized companies have as many as 7,800 different suppliers per $1bn of spend and companies rated as world class still have about half of that. 

Evren Bayri, director for credit advisory service, the Mercator Advisor Group, said the MasterCard Advisors product is unique in that it aims to gather information from all types of payments, not just credit cards, cheques or cash. 

"It gives the purchasing manager a real overview of payments," said Bayri.

Ephraim Schwartz writes for InfoWorld 

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