Catalysts Driving Adoption of Spend Management Initiatives & Solutions (Part 1)
In this article, we explore some of the core fundamental growth drivers that are influencing uptake of Spend Management initiatives and solutions:
- ROI Opportunity. The Spend Management sector has consistently ranked as one of the top ROI value propositions in the entire technology industry. With return on investment for properly implemented Spend Management initiatives often exceeding ten times the initial investment, organisations are quickly realising the benefit of dedicated enterprise-wide Spend Management programs. Additionally, while many other technology sectors require 6 to 18 months for deployment before measurable savings become realised, certain sectors within Spend Management have generated very meaningful savings in a matter of a few months.
- Elevated Strategic View within the Organisation. The ramp up in expected demand for Spend Management products and services, like those of PROACTIS, is occurring as corporations and organisations view the procurement and sourcing aspects of their business much more strategically, and increasingly aligned to their core financial processes. Historically, the Spend Management has been viewed as a back-office, transactional, support function and is now becoming viewed more strategically within the executive suite and board room. While the market is poised for robust growth, the speed at which this occurs is due mainly in part to the education of the market to the benefits of Spend Management. This educational process is well underway as people, organisations, and governmental bodies have realised the merits of the business process and the profitability improvements it provides. The tremendous growth PROACTIS has seen in Spend Management over the past few years emphasises this point. Three major trends have helped catapult PROACTIS solutions to a more prominent and strategic role within organisations:
- Refinement of tools, processes, and technologies that empower organisations with more in-depth spend visibility and transparency into specific business issues (i.e. gaining valuable insight into off-contract or “maverick spending”);
- Rapid expansion of global markets as sources of supply, manufacturing, services, and demand extend beyond the boundaries of any organisation serves; thus heightening an executive’s interest in procurement and cost efficiencies;
- Internet connectivity and commerce has provided companies with new and innovative ways to identify, negotiate, analyse and engage suppliers and partners on an ongoing interactive basis.
- Movement from Opportunistic Point-based Solutions to Perpetual Programs. Many organisations are moving from being opportunistic players in Spend Management to becoming more proactive and strategic participants. As a result, a shift has occurred in the way that organisations view long-term procurement programs. Organisations are moving away from identifying point-based approaches whereby immediate savings are realised from “low-hanging fruit” to a complete organisational realignment with best practices, including integrated organisational and group coordination that bring forth a more automated best-in-class procurement process. This paradigm shift has brought about a more influential type of Spend Management doctrine.
In Part 2
, we will explore three other growth drivers: Global Total Cost of Ownership (TCO), Fiscally Responsibility with Corporate Governance/ Regulatory and Budgetary Compliance, and Technology Automation.