Organisations allocate funds towards both indirect and direct materials, travel expenses, and external workforce. When these elements converge, they gain complete control over each spending category. The Intelligent Spend Management initiative aims to integrate the finest practices from finance, sourcing, and procurement.
We believe that four crucial aspects underscore the importance of intelligent spend management. These aspects include smart supplier management, ensuring supply chain resilience, embracing P2P process intelligence and digitalisation.
Smart Supplier Management
In ordinary situations, the conventional practice revolves around managing relationships with key suppliers. Nonetheless, the global pandemic has taught us that this approach falls short. When supplies are scarce and the supplier’s CEO must make critical decisions, a robust relationship with suppliers becomes indispensable.
As per SAP Performance Benchmarks, a staggering 75% of Consumer Products organisations deem it crucial to have real-time monitoring of the entire supply network to proactively identify and assess potential disruptions in the supply chain. Surprisingly, only 20% are able to achieve this level of capability.
The ability to effectively survey all suppliers on a large scale and extract valuable insights from their subjective feedback, regardless of the circumstances, plays a pivotal role in delivering an exceptional supplier experience. This capability allows for a comprehensive understanding of the supplier landscape and empowers organisations to make informed decisions based on timely and accurate information.
The focus must expand beyond key suppliers to encompass the entire supply network, emphasising real-time monitoring and proactive risk assessment. By embracing a smart approach to supplier management, organisations can enhance their resilience and adaptability in the face of unforeseen challenges, ensuring a seamless supply chain operation.
Building Supply Chain Resilience
Companies often face supply disruptions from natural disasters, geopolitical tensions, and other obstacles. However, the pandemic emphasised the importance of resilient and transparent supply chains.
In fact, it’s said that organisations that have shorter supply re-plan cycle times can mitigate the adverse effects of stock-outs and witness a significant 58% reduction in revenue loss.
The swift advancements in shared data platforms, collaboration tools, and digital technologies have laid a robust groundwork for constructing a dependable, adaptable, and agile network of suppliers. These include innovative solutions like digital signature management and other emerging technologies.
By leveraging these cutting-edge tools, companies can streamline their supply chain operations, enhance coordination and information sharing with suppliers, and ultimately achieve a higher level of resilience. Digital platforms enable efficient data exchange and collaboration, empowering organisations to respond swiftly and effectively to unforeseen disruptions.
The last few years have reinforced the urgency for businesses to prioritise the development of resilient supply chains. By embracing these technological advancements, companies can proactively safeguard against future disruptions, mitigate revenue loss and ensure a smooth and uninterrupted flow of goods and services.
P2P Process Intelligence
Business transformation is a vital aspect for enterprises, regardless of their size. It is crucial to comprehend the barriers that hinder this transformation. One area where significant value can be derived and further improvements can be made across different departments is the procure-to-pay (P2P) process. Research indicates that 63% of organisations recognise the importance of reducing cycle times and eliminating unnecessary buffers by incorporating real-time capabilities. Surprisingly, only 20% of these organisations are successful in accomplishing this objective.
To overcome these challenges and achieve successful transformations, companies can harness the power of process mining, analytics and machine learning. By leveraging these advanced technologies, businesses can rapidly investigate their existing processes, compare them against benchmarks, and identify areas for improvement. Furthermore, they can effectively transform their business processes to support new capabilities.
This approach enables organisations to gain valuable insights into their operations, uncover inefficiencies and implement optimised workflows. The integration of process mining, analytics and machine learning empowers companies to adapt to changing market dynamics, enhance operational efficiency and drive innovation. It enables them to stay competitive in the dynamic business landscape by continuously evolving and improving their processes.
Digitalisation
Business leaders anticipate that procurement will leverage digital technologies to provide improved services while keeping procurement costs in check. According to a survey, 74% of organisations believe it is essential to involve the CEO and Board as executive sponsors of digital innovation. This approach guarantees that digitalisation remains a top priority on the management agenda and aligns with a vision focused on customer satisfaction. Unfortunately, only 42% of organisations manage to accomplish this level of engagement.
To address these challenges, SAP’s Business Technology Platform offers a solution. By utilising this platform, customers can attain agility, business value, and continuous innovation through the seamless integration, effective utilisation of data, and extensibility of all SAP and third-party applications and data assets. This integration empowers businesses to optimise their operations, maximise the value of their investments, and stay ahead of the competition in a rapidly evolving digital landscape.
While managing spending is crucial, the key lies in managing spending “intelligently,” as it can make a significant difference in achieving desired outcomes.
Contact our experts to know more.
