INTELLIGENT SPEND MANAGEMENT:
the key to accelerating business performance
In today’s global economy, business leaders are constantly under pressure to drive optimal levels of performance across their entire organisational value chain. This is partly due to the increasing complexity of the modern business world, in addition to the growing expectations of always-connected customers. Today more than ever, business leaders need the ability to respond to a growing set of challenges with agility and accuracy. The balancing act of managing spend – particularly balancing growth and spend control – is a major tussle for modern C-suite executives. By Rudeon Snell, Director: Intelligent Enterprise Solutions – EMEA South at SAP
4TH QUARTER 2019
REMAINING RESPONSIVE to business needs while focusing on optimising performance, especially when it comes to organisational spend, is key. Growth, innovation and new business capabilities are continually pressured by risk appetite. In today’s unpredictable world, one of the key approaches to helping leaders balance and drive higher levels of business value, is to adopt a real-time Intelligent Spend Management strategy.
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The evolving world of Intelligent Spend Management The task of spend management is expanding in scope and complexity. Increased data volumes, decentralisation and overall spend are giving rise to spend solutions, processes and data that gravitate toward the formation of organisational spend silos. Often this leaves CFOs blind, with no clear visibility over spend across the total organisational ecosystem. What’s more, organisations are under pressure to optimise their spend and invest in areas of growth. This has created the need for a new mandate, especially for finance functions withi global organisations. CEOs nowadays mandate that Finance, Procurement, IT and Supply Chain leaders collaboratively explore new ways of optimising spend management across the enterprise. What is clear is that how an organisation spends its money matters, now more than ever before. The pace of change, the need for adaptability, and the requirement to constantly evolve in order to meet customer expectations means that making the best strategic decisions around spend is an absolute necessity for survival. And making those decisions effectively is onl possible when connecting all sources of spend, with full visibility and insight of that spend, across the entire enterprise. Realising value from Intelligent Spend Management Most organisations have spend functions concentrated within certain spend silos. This creates a challenge for CFOs, who have to ensure optimal spend management regardless of which silos are under-performing. Employees are making organisational
spend decisions with less and less oversight, using a wide range of payment methods, which often poses a risk to total spend visibility, governance and compliance, efficiency a controls. For example, travel and expenses are generally one of the largest areas of spend for a company, outside of capital expenses, and often this category of spend is entirely left to individual employees. Employees traveling to a new location creates logistical challenges for businesses. Companies have to plan for how many days a foreigner can work in the country before paying local income taxes. They must make sure all spend is aligned to company policy, especially when policy and local customs are at odds, or when the receipt is in another language. The sad reality is that most technology vendor solutions are ill-equipped to address spend management across the various spend silos. This lack of effective spend managemen through technology solutions often result in fragmented spend visibility, incorrect financial reporting, failin governance and compliance and many other challenges CFOs battle with on a daily basis. With Intelligent Spend Management, SAP focused on harnessing the collective categories of spend within an organisation, which are often extremely diverse, centralising all spend across all sources. This enables the organisation to manage all spend regardless of category or silo in one place and allows them to capture and apply spend policies consistently to invisible or visible spend. Managing tax and other regulatory requirements becomes easier, and by virtue of having all spend in a centralised location, sourcing best practices can be applied across spend categories, risk management is optimised, and saving negotiation is amplified This leads to better rates and terms within contracts for the organisation. The key philosophy powering this approach is that when CFOs have full visibility over an organisation’s total spend, they can control costs better, can authorise investment better and make more accurate strategic decisions regarding organisational spend.
