Tag Archives: procurement software efficiency

Intelligent Spend Management – Your Next Smart Move

Photo by Val Vesa on Unsplash

Bringing it all together by bringing Intelligent Spend Management to the business.

If you’re just buying office supplies, you’ve probably got a good idea what you’re spending on paper and pens. But odds are your budget goes beyond a few reams of ultra-white printer stock. And while you are specifically tasked with procurement, you actually help hold the reins and hold influence on multiple categories of spend — from direct and indirect goods, to services, contingent labour — even T&E.

True, this spending is spread out across your organisation and, yes, in many of these categories, spending is more decentralised than ever with employees all over the company buying what they need when they need it. And, it’s true that all of this spending and all of these categories aren’t even in your charge.

However, the business needs you to help bring all that spend under control across all those categories, so you can not only reduce costs, but also help your company:

  • Manage supplier performance holistically
  • Diminish delivery and reputation risks across the board
  • Improve compliance and enforce purchasing policies equally in all categories
  • Increase productivity across procurement and throughout the entire company

Changing Expectations

Organisations are expecting this and more from procurement.

  • They want you to collaborate with finance and supply-chain leaders and address spend management across the business.
  • They’re expecting you to bring more spend categories under control, to unify how you manage suppliers across all categories, and to help bring direct and indirect spending together with services and T&E to increase visibility into all your spend.

They want more, and there’s an easy way to deliver and manage every source and every category of spend in delivering one, unified view.

Unfortunately, the systems most businesses use to manage all of these different spend processes can create barriers between spend categories and keep people from working together. Intelligent Spend Management, on the other hand, is a strategy designed to bring those barriers down, so you can get visibility into and control over each and every area of spend. In one place.

Why Intelligent Spend Management Matters

Intelligent Spend Management means comprehensive policy and supplier management. This gives you oversight over indirect and direct suppliers while bringing that same level of discipline to services/external workforce suppliers as well as key travel suppliers.

And, integrated with your ERP system, an Intelligent Spend Management solution creates a common set of spend data — a hub where you can unify and clarify the information. You’ll also be able to:

  • Capture and centralise once-invisible spend like p-card transactions, non-PO invoices and direct travel bookings that used to slip through the cracks in your systems
  • Apply sourcing best practices consistently to all of your suppliers across all categories
  • Centrally manage supplier risk as well as tax and other regulatory requirements

It brings you best-in-class control of each spend category. This means you can manage the entire procure-to-pay process for direct and indirect expenses from a single solution. Imagine being able to:

  • Deliver a guided user experience that makes it easy to follow policy
  • Give users a simple way to make procurement requests, plus tactical purchases directly from suppliers
  • Ensure the suppliers you source, the prices you negotiate and the terms you establish are pulled through right to the point of purchase, so policy compliance becomes everyday practice
  • Capture data from across the process and use AI and machine learning to automate mundane tasks and serve up insight-driven recommendations at critical decision points
  • Strengthen supplier relationships and, ultimately, get more innovation from suppliers to improve how you work and what you deliver

And you can bring that same level of precision, efficiency and user experience for services, your external workforce – and the same level of control.

Presenting a Unified View

You get a unified view of spend. The Intelligent Spend Management solution connects procurement spend data with data from across spend categories, giving you a single, near-real-time view — without having to piece together reports from disparate systems.

This means you, your friends in finance and your supply-chain peers can see where every bit of your budget is going, and help the organisation:

  • Ensure that all spending is in line with corporate policy and priorities
  • Get up-to-date views into your KPIs, so you can adapt accordingly
  • Manage discretionary employee spend before it gets away from you
  • Feed this spend data back into supplier management and fuel stronger negotiations

Intelligent Spend Management breaks down the silos, so companies can control spend across the board.

This is about procurement, but it isn’t simply for procurement. Intelligent Spend Management enables you to work across categories and bring all the data together — so you can bring confidence to your company by bringing certainty to your spending.

This article was written for Procurious by Drew Hofler, VP of Portfolio Marketing for SAP Ariba & SAP Fieldglass.

Procurement Software – Weighed Down by Unnecessary Ice?

Is the procurement software created to make jobs and lives easier actually doing the opposite? Is it all weighed down with a glut of unnecessary features?

Paul Blake leads the technology product marketing team at GEP, a leading global provider of procurement technology solutions.

Have you ever wondered how many power stations are needed to make all the ice that no one uses? Or how about this: what does the internet weigh?

These are the sort of questions that I have found coming to mind on long journeys. I know, it’s sad, isn’t it?

Another one was, what is the quickest way to transfer a really huge amount of data from one place to another?

Answering the Abstract

You’d be forgiven if such questions fall into the category of “things I never think about,” but increasingly the answers to seemingly abstract questions might indicate the kind of thinking we’ll have to do to solve more complex problems that really matter.

The journey that brought our opening question to mind was one homeward bound after a procurement conference, one where I had engaged in a fascinating conversation with some specialists in procuring energy. We all know that one firm’s indirect can be another’s direct category, and energy is a perfect example.

The power appetite of some businesses is simply staggering and the strategising and planning effort that go into managing what, for us, is such a trivial everyday concern is equally impressive.  More on energy in a moment but…

How DO you transfer a vast amount of data in the quickest way possible? The answer may surprise you. FedEx. (Other global courier firms are available.)

100 terabytes of data is a large, but not unimaginable, amount. Given that you can buy a card today for your camera that can store 960GB, then you’re pushing a terabyte (more or less) into something the size of a thumbnail. Stick a hundred of those in a padded envelope and you can have it anywhere within a 25 mile radius within the hour or anywhere on the planet within 24.

A 500-megabit broadband connection would take you the best part of three weeks to send that much data to your neighbour, let alone to your colleagues 7 time zones away.

As the complexity of business information increases and subsequent data volumes explode will we begin to see a hybrid solution to data transfer? SneakerNet 2.0?

Combatting Waste

Equally, as energy becomes more of a limiting factor, businesses may look for novel methods to combine traditional and emerging technologies into a solution that works for a new era. Some years ago I was surprised to find, in my local DIY store, a display of low energy compact fluorescent light bulbs on sale for, if I recall correctly 30p (50¢) each.

As I puzzled at how they could be sold so cheaply, a fellow shopper pointed out that they were branded with the logo of a major utility and his comment was, “which is cheaper, give these away at 30p each or build another power station?”

When you do a bit of scratch mathematics on the back of an envelope, and realise how much energy is spent putting ice in places where it doesn’t need to be (a couple of kilos, for example in every hotel room in the place I’ve just stayed as part of their “turn down” service), then you start to think about a whole host of other seemingly trivial things, which add up to huge profligate waste.

Cocktail umbrellas? Sachets of salt and pepper served with in-flight meals that nobody ever opens but which all get discarded? The printing of the words “allergy advice: contains mustard” on jars of mustard (it’s true).

Makes you think doesn’t it?  All that energy adds up to a vast amount of fuel burned for no really compelling reason whatsoever. In solving one small apparent problem (like the inability to get through a night without some ice nearby), we can create another that is much trickier to solve, and they require us to be creative and develop different, perhaps non-obvious solutions.

Perhaps nobody would immediately think of using a traditional parcel service to move data about, or giving away energy saving devices instead of producing more energy.

The Foibles of Features

When it comes to developing procurement software the obvious path is to develop features and functions. Capabilities if you like.  The tools to let you do stuff.  This is natural for developers, it’s what they do.

What they may actually be doing is attempting to solve small problems that aren’t necessarily real in any significant sense (the operational equivalent of running out of ice while you sleep), and at the same time creating a much bigger, more intractable issue.

In trying to deliver every bell and whistle in order to reach feature parity with a competitor, technologists end up building monstrously complex systems that actually hinder the very process they were intended to facilitate.

But perhaps there is a different approach. How about, instead of developing an ever more elaborate set of features in some kind of arms race, we look at developing processes; processes and the means to shape them to suit a business?

What would that mean in real terms? Perhaps the future of business and procurement software is about making connections between people and groups work better, instead of creating more and more levels of complexity in the tools they use.

Shifting Thinking

My contention is that one way to dramatically improve productivity in the modern work place would be to outlaw email. Heretical, perhaps, and probably impossible to implement. But I bet most of you reading this are both shuddering in horror at the thought and, at the same time, recognising the truth of the situation – that email is the static that swamps our day, the noise that is disrupting the signal, so to speak.

Technology has the capability to drive improvements in business but it has also the capability to tie us down in thrall to evermore complex tasks and activities. When looking to what we might develop next, we should not lose sight of the human aspect that is central to what procurement is all about – establishing and managing relationships across an entire supply chain for mutual benefit.

Whilst not proposing a sudden panacea to cure all ills, this approach might start to move us towards better, more natural productivity, and away from being weighed down by increasing complexities.

But that new idea would require a shift in thinking in the customer too. The process of procurement software selection has for too long been dominated by an almost obsessive compulsion to assess suitability by ticking boxes against features and functions, instead of an examination of how a company’s problems might be solved.

Enlightened procurement pros are starting to “get” this idea. They are looking to their own operations to see what the really big problems are, and getting to grips with how to solve them using procurement software as an enabler, rather than as an end in itself.

Time to Lighten the Load

So how much does the internet weigh? Not the server farms or storage devices, or drives or memory chips involved, but the data itself? It might seem like an utterly meaningless question. Surely an acre-sized data centre weighs the same whether it is full, or as empty as the day it came on-line? Well, apparently not. Data requires energy to exist. And every megabyte of data you add to your cloud corpus, adds just a little more energy.

The world’s most famous equation tells us E=mc2. Therefore, every unit of energy you require to store a unit of data, equates to a corresponding unit of mass. A full data centre really does weigh more than an empty one, but of course only by a tiny, tiny amount.

Correspondingly, every email we receive, and every feature we add to our already complex systems, adds just a little bit more mass, literally. We’ll never notice it, of course, but every time we feel weighed down by an information overload, or stymied by ridiculously complex procurement software, at least we can comfort ourselves in the knowledge that we’re not imagining ALL of it. And one day we might work together to lighten the load.

For more high-energy thinking on procurement software, visit the Smart by GEP website.