2022 in Review: The Top BSM Stories of the Year

Read time: 5 mins
2022 in Review: The Top BSM Stories of the Year

Futureproof. That’s the word Coupa is naming as the Business Spend Management (BSM) word of the year. From climate change to Covid to climbing costs, instability brought the need for BSM leaders to futureproof their organizations. The BSM community found new ways to do just that — despite these mounting challenges. As we enter 2023, check out the major BSM stories of the year and learn how their threads will continue to make major impacts.

1. Procurement: Is the CPO the next CEO?

Rising inflation and the sourcing challenges left by the pandemic urged Chief Procurement Officers (CPOs) to rise to the task of ensuring consistent cash flow, maintaining dependable supplier relationships, and navigating trade restrictions. Thanks to agility and strategy employed by CPOs this year, businesses across various industries operated efficiently despite potentially fatal setbacks. The value of procurement became apparent, and CPOs — in essence — earned and secured their seat at the executive table. Read more

2. Mitigating ESG risk in supply chains

A typical supply chain generates far greater social and environmental costs than a company’s own operations, accounting for more than 80% of greenhouse gas emissions, according to a McKinsey Sustainability report. It’s no wonder Environmental, Social, and Corporate Governance (ESG) requirements objectives are becoming stricter around the world. So how can companies mitigate ESG risk in their supply chain? It starts with collecting data on suppliers’ ESG credentials, scaling this data collection, and getting that data to company decision-makers quickly. No easy feat. But a community data-sharing approach (like Coupa’s Community.ai) harnesses supply chain information from thousands of companies to provide more accurate and actionable insights. Read more

3. Achieving sustainable finance

Every transaction a company makes carries the potential for exponential impact on its business and the world. What a company spends on, where, and with whom reflects its priorities when it comes to protecting the environment. And companies that harness the power of spend through the wider practice of BSM can transform ad-hoc environmental initiatives into strategic sustainable finance programs. To do that, companies should commit to measuring environmental data, find quick wins when setting environmental goals, and team up with procurement to source sustainable suppliers. Doing well and doing good can, and should, go hand in hand. Read more

4. What new electric car laws mean for global supply chains

California and New York’s new electric car laws have the potential to significantly reduce planet-warming greenhouse gas emissions — stopping up to 915 million barrels of oil from being burned by 2040! They may impact electric vehicle (EV) supply chains worldwide, too. For one, it’s likely raw material and semiconductor shortages will occur. This means EV supply chains will need to put flexibility and optionality at the front of their priority list, along with balancing new oversight in their supply chain as a whole. Moving to EVs is an essential part of slowing the worst effects of climate change, but there is a long way to go, with much depending on resilient and effective supply chain operations globally. Read more

5. Supply chain: Tackling excess inventory challenges

Retail was among the biggest industries to experience excess inventory challenges this year. But it wasn’t alone. Across industries and geographies, the world saw a slowdown in demand as inventory grew. Traditionally, organizations turned to Multi-Echelon Inventory Optimization (MEIO) to set the right stocking levels, but this approach is limited today. To comprehensively right-size inventory, organizations need to bring in external data around macroeconomic indicators and harness SKU data to set the right service strategies. It’s also important to review and tune supply chain policies so both procurement and manufacturing objectives align. Then, organizations can implement scenario planning to stress test those policies. Read more

6. Finance and procurement are containing costs in uncertain times

Market conditions became difficult and unpredictable this year, forcing many organizations to look at cost reduction as a way to maintain profitability and business continuity. But instead of cutting costs broadly for the quickest impact, some organizations asked themselves: How can we differentiate value from waste? How do we maintain our ESG policies? Which investments will position us for growth later on? Although it may seem counterintuitive, smart investing (in tools like BSM technology) can actually position organizations to build resiliency for years to come. Read more

7. Improving working capital efficiency to battle inflation

In 2022, inflation reached a 40-year high. Capital costs rapidly increased. Supply and labor constraints continued. This year’s macroeconomic conditions meant every dollar and dime spent by an organization held a significant impact — and came with increased scrutiny. In response, organizations looked to improve working capital efficiency to make every dollar go further. But was that even possible? Ensuring finance teams have visibility to risk exposure, reconsidering cost versus cash trade-off, and taking advantage of credit extension and rebate opportunities for tail spend were some of the tactics that proved beneficial. Read more

8. Treasury: Increasing visibility on cash, debt, and investment management to build resilience

Corporate treasurers were in a tough spot in 2022. Tasked with futureproofing their organizations for uncertain times, they required full source-to-settle cash visibility to make timely and informed decisions about business growth, investments, funding, and cash forecasting. Coupa helps treasures do just that, according to Aite-Novarica Group’s annual evaluation. The Aite Matrix Evaluation on Treasury Management Systems explores key trends within a region’s treasury management system market and ranks which technology is evolving to address and meet market needs. Coupa’s BSM approach is a lead contender in this arena, helping companies futureproof for whatever comes their way. Read more

Learn how to futureproof your business — no matter what 2023 brings.

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