PROACTIS Blog

World-Class Spend Control: Taking Action (Part 2)

Charlotte Sutton
Charlotte Sutton,
PROACTIS
At any given point in time (and it changes over time), your organization has two dynamics.
  • Breadth of vision: this is the GOAL that is set at a point in time in terms of things like the subset of Source-to-Contract (S2C) and/or Purchase-to-Pay (P2P) business processes and spend categories you are aiming to tackle, and maybe the technology tools you're putting in place to help do so.
  • Environment (organised for success): That is the combination of resources, executive mandate, project team and relationships with other operational managers.
Looking at those dynamics, we can place all spend control projects in one of four quadrants.
  1. Best-in-class (high ‘breadth of vision’ & high ‘organised for success’): This is some level of perfect. Projects in this quartile are targeting the complete picture. They have all the technology tools in place, the resources, mandate, project team to get it done, and the buy-in from all operational departments.
  2. Visionaries (high ‘breadth of vision’ & low ‘organised for success’): Probably where the most ambitious of you may be today. You see the big picture and are after it and you have many of the tools you need in place or already planned. But the reality is you are trying to get the mandate or resources, and you may not have gotten everyone in organization that needs to play a part to see the same vision as you see.
  3. Quick Return (low ‘breadth of vision’ & low ‘organised for success’): This is where most pragmatists start out e.g. a project to address specific process, where there is a specific problem or payback (e.g. eSourcing in procurement or eInvoicing in AP). As CPO you can change from RFX to eRFX as long as you can show a business case. As CFO, you don’t need buy-in from everyone, everywhere to outsource invoice scanning to turn all paper invoices into electronic. The ‘bang for buck’ is good. But overall impact on the bottom line is limited of what full Spend Control can do.
  4. Deep Dive (low ‘breadth of vision’ & high ‘organised for success’): This is kind of like a ‘quick return’ but on steroids! Projects & initiatives in this quadrant are targeting a fairly limited scope (e.g. one specific spend category or business process). The difference is you are focusing efforts (budget, project teams and tools) to ensure everything that needs to be done, gets done. Since the scope is something short of enterprise wide, you are able to get the buy in much easier.
We are seeing great results from PROACTIS customers operating in every one of these quadrants. Not everyone has a dream of going full world-class spend control, and that’s fine. But most of you today aspire to do more than what you've already achieved, so it’s good to have a clear understanding of what it takes to move from where you are to ‘more’.

In other words, either squeeze more value from what you are doing today or expand the scope of business processes and/or categories to apply what you've learned to a bigger piece of the ‘spend pie’.