FORM 2
THE PATENTS ACT, 1970 (39 ofl970)
COMPLETE SPECIFICATION (Section 10, rule 13)
A system and a method for spend analysis by providing strategies for mining spend information
Zycus Infotech Pvt. Ltd
an Indian Company registered under the provisions of the Companies Act, 1956,
with our Corporate office at GJ-07, SEEPZ++, SEEPZSEZ, Andheri (East), Mumbai -400096.,
Maharashtra, India.
THE FOLLOWING SPECIFICATION PARTICULARLY DESCRIBES THE INVENTION AND THE MANNER IN WHICH IT IS TO BE PERFORMED

FIELD OF THE INVENTION
The present invention relates to electronic procurement.
In particular, the invention relates to procurement performance.
In particular, the invention relates to a system and a method for spend analysis by providing strategies for mining spend information.
PRIOR ART
US patent application no. 20030139986 discloses a system and a method for tracking spend analysis. It determines spend associated with a particular supplier, type of good, or business unit. This analysis further identifies particular purchasing categories in which significant resources are being expended, in order to consolidate such purchases with a particular supplier, and/or negotiate a discounted unit price per item based upon the overall volume.
US patent application no. 20120232950 discloses a system and a method for spend analysis by identifying a spend category and associating one or more cost contributors to the spend category. It analyzes spend data based on market information associated with at least a subset of the one or more cost contributors; it further facilitate optimizing procurement costs, projecting future procurement costs, negotiation leverage with suppliers and so on.

US patent application no. 20090100017 discloses a system and a method for processing spend data by capturing data feeds from one or more clients and a service provider; spend data contained within the data feeds is normalized by mapping the spend data to a common universal taxonomy using a business rule set; this normalized spend data is stored within an aggregated spend database and report queries are run against total aggregated spend data within the aggregated spend database and results of the report queries are posted on a secure web portal for viewing by authorized users.
BACKGROUND OF THE INVENTION
Procurement professionals always look for opportunity to save money as well as to achieve compliance while purchasing goods/ services. Most of the time this saving and compliance opportunity lies within their organization and can be identified from their spend data. Major challenges in finding this opportunity are - huge volume of spend data and unavailability of standard strategy across organization.
Present invention discloses a system and a method for spend analysis by providing strategies for mining spend information. Present invention is based on standard category and supplier based saving strategies. It further creates business constraints for data analysis. It also helps in compliance based strategies.

OBJECTS OF THE INVENTION
An object of the present invention is to provide a system and a method for spend analysis by providing strategies for mining spend information.
Another object of the present invention is to provide a system and a method for analyzing classified spend data based on pre-determined strategies to find out saving and compliance opportunity across category and supplier.
Yet another object of the present invention is to provide a system and a method for analyzing classified spend data based on pre-determined saving and compliance strategies in relation to payment terms of the supplier.

SUMMARY OF THE INVENTION
The present invention introduces a system for spend analysis by providing strategies for mining spend information.
The system comprises of:
- a processor unit; and
- a computer readable medium storing instructions executable by the processor unit comprising:
- Input System adapted for entering pre-defined parameters, including but not restricted to information of spend data, category of spend data, information of supplier, payment term, type of contract, contract term, other parameters and business constraints;

- Strategy Selection System to select Spend Analysis Strategy from Spend Analysis Strategy System, adapted for analyzing classified spend data based on predetermined savings and compliance strategies;
- Category/ Supplier Display System to display categories/ suppliers for user-defined spend data which are matching the default/ user-defined business constraints; the Category/ Supplier Display System is integrated with Classification System adapted for classifying spend data based on pre-defined parameters;
- Output System adapted for displaying output for strategy being selected for a specific parameter.
Present system analyzes classified spend data based on pre-determined strategies to find out saving and compliance opportunity across category and supplier.

Present invention is based on standard category and supplier based saving strategies. It further creates business constraints for data analysis. It also helps in compliance based strategies.
These strategies are supplier payment based saving and compliance strategies i.e. Payment Term Rationalization and Supplier Payment Term Compliance.

BRIEF DESCRIPTION
The invention will now be described in relation to the accompanying drawings in which:
Figure 1 illustrates a schematic of Strategy Selection System to select PTR strategy.
Figure 2 illustrates a schematic of display of categories for user-defined spend data which are matching the default/ user-defined business constraints.
Figure 3 illustrates a schematic of output report for PTR strategy.
Figure 4 illustrates a schematic of Strategy Selection System to select SFTC strategy.
Figure 5 illustrates a schematic of output report for SPTC strategy.
Figures 6, 7, 8 and 9 illustrate a schematic, showing potential savings for SPTC Strategy System for both scenarios i.e. when discount is availed and when discount is not availed at different discount %.
DETAILED DESCRIPTION
According to an exemplary embodiment, a system for spend analysis by providing strategies for mining spend information; the system comprising: - a processor unit; and

- a computer readable medium storing instructions executable by the processor unit comprising:
- Input System adapted for entering pre-defined parameters, including but not restricted to information of spend data, category of spend data, information of supplier, payment term, type of contract, contract term, other parameters and business constraints;
- Strategy Selection System to select Spend Analysis Strategy from Spend Analysis Strategy System, adapted for analyzing classified spend data based on predetermined savings and compliance strategies;
- Category/ Supplier Display System to display categories/ suppliers for user-defined spend data which are matching the default/ user-defined business constraints; the Category/ Supplier Display System is integrated with Classification System adapted for classifying spend data based on pre-defined parameters;
- Output System adapted for displaying output for strategy being selected for a specific parameter.
According to another exemplary embodiment, the Spend Analysis Strategy System further comprised of:
- PTR Strategy System adapted for identifying savings by tracking the difference in payment terms for a commodity of a supplier;
- SPTC Strategy System adapted for identifying compliance with the supplier by comparing different payment terms with each other suggesting the best day of payment and thereby calculating potential savings for different payment terms.

According to yet another exemplary embodiment, the PTR Strategy System is adapted for rationalizing the payment term days to the best payment term, when payment terms are different for a commodity of a supplier.
The PTR Strategy System is further adapted for calculating savings potential for a category of commodity, matching the pre-defined business constraints, with different payment terms by the formula -
Savings Potential = (((Best Payment Term Days - Payment term Days of the Row)*Row spend/365)*saving % Parameter).
Payment to suppliers is usually done based on the contracted timelines such as advance payment, on delivery payment, net 30, net 45, net 60 etc. Payment terms rationalization is a strategy that suggests use of uniform payment terms, most beneficial to the organization across suppliers or spend categories. Payment terms, when rationalized effectively, can result in considerable gains. Consider the following case scenarios:
Case 1 - Multiple payment terms for different items with a single supplier
Suppose supplier X is supplying three items A, B and C. While the payment is made on
net 30 for items A and B, for item C the payment is done on net 45. Since the supplier is
same for all the items, there is a possible opportunity to negotiate for net 45 payment
term for all the items. This 15 days delay in the payment will help to keep more capital in
hand.
Case 2 - Multiple payment terms for single category with different suppliers

Suppose category X is being supplied by three different suppliers A, B and C. While the payment is made on net 30 days to suppliers A and B, payment to C is done on net 45. In this case, since supplier C supplies the same category items as the other two, there is possible opportunity to negotiate with suppliers A and B for net 45 payment term. Savings in both case scenarios will come for the extra working capital available for 15 additional days. Savings is calculated using above formula.
According to still another exemplary embodiment, the SPTC Strategy System adapted for comparing Actual Paid days, Contracted days, Discounted days and % Discount for a supplier of a commodity being selected and thereby calculating capital gain and discount, if discount is availed for a commodity.
The SPTC Strategy System is further adapted for calculating the savings potential and thus best payment day by taking into consideration difference in Actual Paid days, Contracted days and Discounted days, by following formula-
Case 1: When Discount is availed
A = Capital Gain Interest until the last Discounted period day + Discount Gain
B = Capital Interest Gain until the last Contracted period day
Potential Savings = difference between A and B
Best Payment Day = Day with higher potential savings

According to still another exemplary embodiment, the SPTC Strategy System adapted for comparing Actual Paid days and Contracted days for a supplier of a commodity being selected and thereby calculating capital gain, if discount is not availed for a commodity.
The SPTC Strategy System is further adapted for calculating the savings potential and thus best payment day by taking into consideration difference in Actual Paid days and Contracted days by following formula -
Case 2: When Discount is not availed
C = Discount Amount Gain - Capital Interest Loss due to early payment
D = Capita] Interest Gain until the last Contracted period day
Potential Savings = difference between C and D
Best Payment Day = Day with higher potential savings
Thus the SPTC Strategy System analyzes pros and cons of utilization of entire credit period or paying early by availing the discount.
The PTR Strategy System and the SPTC Strategy System are also adapted for application of interest rate.
Examples

There are two situations - if discount is availed i.e. payment is made within discounted period and if discount is not availed i.e. payment is not made within discounted period. These two situations at different discount % are explained in figures 6, 7, 8 and 9.
Benefits of present invention:
- It starts with actionable opportunities not just static spend reports.
- It simplifies the process of creating opportunity reports.
- It isolates and analyzes datasets with high savings potential which also gives
compliance results.

We Claim:
1. A system for spend analysis by providing strategies for mining spend information;
the system comprising:
- a processor unit; and
- a computer readable medium storing instructions executable by the processor unit comprising:
- Input System adapted for entering pre-defined parameters, including but not restricted to information of spend data, category of spend data, information of supplier, payment term, type of contract, contract term, other parameters and business constraints;

- Strategy Selection System to select Spend Analysis Strategy from Spend Analysis Strategy System, adapted for analyzing classified spend data based on predetermined savings and compliance strategies;
- Category/ Supplier Display System to display categories/ suppliers for user-defined spend data which are matching the default/ user-defined business constraints; the Category/ Supplier Display System is integrated with Classification System, adapted for classifying spend data based on pre-defined parameters;
- Output System adapted for displaying output for strategy being selected for a specific parameter.
2. The system as claimed in claim 1, wherein, the Spend Analysis Strategy System
further comprised of:
- PTR Strategy System adapted for identifying savings by tracking the difference
in payment terms for a commodity of a supplier;

- SPTC Strategy System adapted for identifying compliance with the supplier by comparing different payment terms with each other suggesting the best day of payment and thereby calculating potential savings for different payment terms.
3. The system as claimed in claim 2, wherein, the PTR Strategy System is adapted for rationalizing the payment term days to the best payment term, when payment terms are different for a commodity of a supplier.
4. The system as claimed in claim 2, wherein, the PTR Strategy System is further adapted for calculating savings potential for a category of commodity, matching the predefined business constraints, with different payment terms by the formula -
Savings Potential = (((Best Payment Term Days - Payment term Days of the Row)*Row spend/365)*saving % Parameter).
5. The system as claimed in claim 2, wherein, the SPTC Strategy System adapted for comparing Actual Paid days, Contracted days, Discounted days and % Discount for a supplier of a commodity being selected and thereby calculating capital gain and discount, if discount is availed for a commodity.
6. The system as claimed in claim 5, wherein, The SPTC Strategy System is further adapted for calculating the savings potential and thus best payment day by taking into consideration difference in Actual Paid days, Contracted days and Discounted days, by following formula -

A = Capital Gain Interest until the last Discounted period day + Discount Gain
B = Capital Interest Gain until the last Contracted period day
Potential Savings = difference between A and B
Best Payment Day = Day with higher potential savings
7. The system as claimed in claim 2, wherein, the SPTC Strategy System adapted for comparing Actual Paid days and Contracted days for a supplier of a commodity being selected and thereby calculating capital gain, if discount is not availed for a commodity.
8. The system as claimed in claim 7, wherein, the SPTC Strategy System is further adapted for calculating the savings potential and thus best payment day by taking into consideration difference in Actual Paid days and Contracted days, by following formula -
C = Discount Amount Gain - Capital Interest Loss due to early payment
D = Capital Interest Gain until the last Contracted period day
Potential Savings = difference between C and D
Best Payment Day = Day with higher potential savings
9. The system as claimed in claim 1, wherein, the SPTC Strategy System is further adapted for application of interest rate.
10. The system as claimed in claim 1, wherein, the Output System adapted for displaying output in a report form containing potential savings for different payment

terms of a supplier of a specific category, when the PTR Strategy System is being selected.
11. The system as claimed in claim 1, wherein, the Output System adapted for displaying output in a report form containing potential savings by comparing payment on Actual days, Contracted days and Discounted days across suppliers, when t he SPTC Strategy System is being selected.
12. A method for spend analysis by providing strategies for mining spend information; the system comprising:

- Method of entering pre-defined parameters, including but not restricted to information of spend data, category of spend data, information of supplier, payment term, type of contract, contract term, other parameters and business constraints;
- Method of selecting Spend Analysis Strategy from Spend Analysis Strategy System, adapted for analyzing classified spend data based on pre-determined savings and compliance strategies;
- Category/ Supplier Display method to display categories/ suppliers for user-defined spend data which are matching the default/ user-defined business constraints; the Category/ Supplier Display method is integrated with Classification method, adapted for classifying spend data based on pre-defined parameters;
- Method of displaying output for strategy being selected for a specific parameter.
13. The method as claimed in claim 12, wherein, the Spend Analysis Strategy method
further comprised of:

- PTR Strategy method adapted for identifying savings by tracking the difference in payment terms for a commodity of a supplier;
- SPTC Strategy method adapted for identifying compliance with the supplier by comparing different payment terms with each other suggesting the best day of payment and thereby calculating potential savings for different payment terms.

14. The method as claimed in claim 13, wherein, the PTR Strategy method is adapted for rationalizing the payment term days to the best payment term, when payment terms are different for a commodity of a supplier.
15. The method as claimed in claim 13, wherein, the PTR Strategy method is further adapted for calculating savings potential for a category of commodity, matching the predefined business constraints, with different payment terms by the formula -
Savings Potential = (((Best Payment Term Days - Payment term Days of the Row)*Row spend/365)*saving % Parameter).
16. The method as claimed in claim 13, wherein, the SPTC Strategy method adapted for comparing Actual Paid days, Contracted days, Discounted days and % Discount for a supplier of a commodity being selected and thereby calculating capital gain and discount, if discount is availed for a commodity.
17. The method as claimed in claim 16, wherein, the SPTC Strategy method is further adapted for calculating the savings potential and thus best payment day by taking into consideration difference in Actual Paid days and Contracted days, by following formula -

C = Discount Amount Gain - Capital Interest Loss due to early payment
D = Capital Interest Gain until the last Contracted period day
Potential Savings = difference between C and D
Best Payment Day = Day with Mgheir potential savings
18. The method as claimed in claim 13, wherein, the SPTC Strategy method adapted for comparing Actual Paid days and Contracted days for a supplier of a commodity being selected and thereby calculating capital gain, if discount is not availed for a commodity.
19. The method as claimed in claim 18, wherein, the SPTC Strategy method is further adapted for calculating the savings potential and thus best payment day by taking into consideration difference in Actual Paid days and Contracted days, by following formula -
C = Discount Amount Gain - Capital Interest Loss due to early payment
D = Capital Interest Gain until the last Contracted period day
Potential Savings = difference between C and D
Best Payment Day = Day with higher potential savings
20. The method as claimed in claim 12, wherein, the SPTC Strategy method is further
adapted for application of interest rate.

21. The method as claimed in claim 12, wherein, for the PTR Strategy method, the method of displaying output adapted for displaying output in a report form containing potential savings for different payment terms of a supplier of a specific category.
22. The method as claimed in claim 12, wherein, for the SPTC Strategy method, the method of displaying output adapted for displaying output in a report form containing potential savings by comparing payment on Actual days, Contracted days and Discounted days across suppliers.