PROACTIS Blog

Spend Control: How do you avoid getting tangled up in a long, expensive project?

Charlotte Sutton
Charlotte Sutton,
PROACTIS
Rolling-out a Spend Control program need not be anything like the arduous and costly project you experienced when you implemented your ERP system.
From a business process perspective
 
There is no need for a ‘big bang’ approach where you ‘go live’ with everything and everyone one sunny Monday morning (which almost always turns stormy that afternoon!). Although your ultimate goal is to have your Spend Control program ‘firing on all cylinders’ by covering all aspects of the Source-to-Contract and Purchase-to-Pay processes, those processes are not completely interdependent, nor are the spend categories you address.
 
Spend Control roll-outs are easily segmented into manageable mini-projects that have ROI associated with each step. Deployment phases are usually organised around three key dimensions:
 
  • Spend categories to be addressed e.g. start with a single category such as IT spend or a grouping of categories that are similar; move through all your categories and associated suppliers in sequence of expected savings.
  • Business processes to be implemented. e.g. start with the purchase-to-pay process to get a foundation of solid purchase authorisation controls and AP efficiency gains, then move on to tackle each element of the Source-to-Contract process to incrementally expand the range of suppliers with whom you have competitively negotiated cost-saving agreements, and to improve the supplier and catalogue information integrated into the purchasing process.
  • Organisational entities to use the new capabilities e.g. start with your headquarters operation or a particular business unit to gain experience and refine your processes, then expand to all your branch locations and business units around the world one step at a time. 
By making each phase a manageable combination of spend categories, business processes and organisational entities, you can closely control the scope of each mini-project, measuring results and making refinements as you go. Using this approach, you will find that you realise increased savings on a steady basis with little organisational trauma or business risk.
 
From an IT perspective
 

You have many technical options for deployment of eProcurement. A modern eProcurement system can be deployed:
  • In the Cloud, but managed by you
  • In the Cloud as a managed service
  • On-premise in the traditional manner
  • A combination of the two – e.g. transaction oriented Purchase-to-Pay functions hosted on-premise and collaboration-oriented Source-to-Contract functions in the Cloud
Regardless of your approach to technical deployment, most Spend Control solution providers offer the option to license the eProcurement software in multiple ways as well:
Subscription or transaction-based licensing where you essentially pay-as-you-go with no significant up-front licensing cost; ongoing support is usually bundled in with the fee
A traditional one-time perpetual license with the option to include ongoing maintenance and support services with an annual fee
 
The combination of these technical deployment and software licensing options can take away much of the up-front cost of your Spend Control initiative and align eProcurement solution costs with your step-by-step deployment and resulting savings.
 
To learn more visit proactis.com
 
 
 
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