The definition of spend management seems to be fairly obvious ⎼ it’s the management of enterprise spend, right? On the contrary, the practice of spend management involves more than just the simple tracking and monitoring of how much money is going out of an organization. Much more.
The true definition of spend management encompasses integrating and automating source-to-pay activities like sourcing events, contract and supplier management, and spend analysis to holistically monitor and control spend while cutting costs and improving operational efficiencies.
When done right, spend management can deliver enormous value to an organization in a multitude of ways. Let’s take a look at some of the benefits of spend management technology, aside from savings.
Improves Process Efficiency
The true practice of spend management requires an organization to take a deep dive into its business processes ⎼ analyzing the efficiency of each one to better manage overall costs of operation (a perpetual top issue for CPOs as shown in Ardent Partners’ annual CPO Rising reports). In fixing process inefficiencies, an organization will benefit from cost savings that they can then allocate elsewhere or put toward the bottom line.
Spend management is a comprehensive process for managing all suppliers and company purchasing while maximizing the value of every dollar being spent. Integrating and automating spend-related activities reduces risk by helping to monitor supplier performance and compliance as well as ensuring suppliers are paid in compliance with their contracts.
Gives Time Back to Procurement
Through the automation of spend-related activities, procurement is able to get some time back to work on other things. This increased leverage, along with having better visibility and control over purchase-to-pay data, empowers the expansion of procurement’s impact, influence, and value within the organization.
Probably a more obvious observation is that of the reduced costs and savings that would occur from proper spend management. Having the needed visibility into enterprise spend is requisite for improving spend compliance by helping to eliminate rogue purchases, capture discounts, and prevent any spend from slipping through the cracks.
Impacts the Entire Enterprise
Implementing a spend management technology provides extensive, sustainable results that echo throughout the entire enterprise. Having a holistic and transparent view of all spend-related activities allows executives to benefit from increased productivity, agility, and financial control; empowering better buying decisions and a long-lasting impact to the bottom line.
If you’re ready to unlock the value that a holistic spend management platform can bring to your organization, schedule a no-obligation personalized demonstration of the Corcentric Platform today.