According to research firm IDC, the digital economy is changing business resource allocation and business processes significantly.
“Organisations are turning to innovative technology to bring more autonomy into the workflows of spend management, buyer/supplier interactions, procurement governance processes, and supply base management,” said IDC in a white paper entitled “The Future of Spend Management: Approaches, Opportunities, and Challenges in a Digital World”.
IDC added that, the more automated and integrated the workflows, the more the spend management professional increases productivity, achieves real-time visibility, and can improve business outcomes.
The white paper concluded that:
- On average, 40–45% of a company’s revenue goes to procurement spend (products, people, and services), which represents the biggest spend category for most product-centric industries.
- Among spend management professionals, there is deep-seated dissatisfaction at the current state of spend management. This dissatisfaction grows more acute in less developed regions of the world.
- As spend management becomes an area of focus for many organisations to control costs and become agile, the mindset of spend management professionals is shifting away from the legacy approach and legacy technology to embrace an approach that is infused with intelligence.
- Intelligent spend management is where the traditional processes of spend management are augmented with artificial intelligence and machine learning algorithms. The added intelligence is essential to maximising both the cost-saving potential of a unified spend management approach and the agility gains inherent in an intelligent spend management solution.
IDC concluded: “Analysing both the supplier data and the spend data continues to be the most time-challenging aspect for spend management teams. Unfortunately, most spend management application vendors are not focused on solving the data challenges for procurement, finance, supply chain, and accounts payable processes.
“Its time technology starts solving the business challenges. The discussion of intelligent spend management is gaining urgency, with 60% of survey respondents already in the discussion with a technology vendor on an intelligent spend management platform. This suggests that to remain competitive in highly dynamic markets, organizations must take action to begin the journey toward intelligent spend management.”
The white paper was sponsored by SAP Concur, which is said to be the world’s leading brand for integrated travel, expense, and invoice management solutions.
Clients in Malaysia include Sarawak Energy which had embraced SAP Concur in an effort to gain more visibility into spend management while providing employees with user-friendly experiences through an integrated management solution.
SAP Concur is renowned for its completely connected spend management solution encompassing travel, expense, invoice, compliance and risk.
To learn more about the business value of intelligent spend management, the link to the white paper and other resources is available here.