Part 2: Catalysts Driving Adoption of Spend Management Initiatives & Solutions

Charlotte Sutton
Charlotte Sutton,
In part 1, we explored some of the core fundamental growth drivers that are influencing the uptake of Spend Management initiatives and solutions. Below are three additional core drivers:
  • Global Total Cost of Ownership (TCO). Global competitiveness, new entrants to already competitive markets, low-cost labour in developing nations, as well as outsourcing initiatives are forcing organisations to optimise their cost structures on a global total cost of ownership (TCO) basis. Many organisations are proactively adopting a global Spend Management perspective as it has been shown to improve operational productivity and performance, allowing organisations to do “more for less” on a global basis rather than in isolation. Spend Management is providing the necessary means for procurement processes to be enacted enterprise-wide on a global TCO basis.
  • Fiscally Responsible with Corporate Governance/Regulatory and Budgetary Compliance. With increasing spotlight on regulatory compliance, organisations and C-Level executives are more than ever concerned with maintaining proper corporate governance. Due to the negative implications that improper governance has caused, and the devastating impact it can have on market valuations, this issue has become relevant to organisations worldwide. While in the public sector, Spend Management is becoming a practical choice for delivering immediate, multi-million cash savings for budget-constrained government agencies confronted with the unpopular alternatives of raising taxes, eliminating programs, or making staff reductions. Spend Management allows greater visibility and control over corporate or budgetary spending that C-level executives or administrators desire and can be viewed at the most granular and category-specific level to enact better spend controls and compliance.
  • Technology Automation. Organisations have been enabled by improving software technology, like that of PROACTIS, that allows them to analyse, organise and act upon spend data to eliminate unnecessary costs. Spend Management tools have evolved first from spreadsheets to licensed software packages to today’s “on-demand” cloud solutions. The costs associated with purchasing and implementing a Spend Management program have decreased over time, in part due to changes in delivery model and now has been lowered to allow not only large organisations but many SMBs to participate in and deploy Spend Management initiatives. Additionally, PROACTIS can ensure the ROI achieved from the initial small-scale Spend Management projects can provide a self-funding mechanism for more comprehensive, enterprise-wide Spend Management solutions.
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