Rethinking Business Spend Management for Today
Business Spend Management (BSM) was never just about reducing the bottom line. And just as the purview of today’s procurement function has expanded, so has the purpose and value of BSM in driving new levels of supply chain efficiencies, ethical sourcing, responsible growth and sustainable business transformation.
Here David Wolstencroft, SVP EMEA Alliances, Coupa, explores this expanding scope and how rethinking your approach will drive exciting new opportunities to create value through the enterprise and beyond.
The past 18 months has seen enterprises navigate through incredibly turbulent market conditions. For many, BSM has played a key role — not only in providing greater visibility and control over spend and liquidity, but in helping adapt spending priorities and save money.
While cost efficiency, balance sheets and shareholder value remain ongoing critical, enterprises have a key role to play in driving a fairer and more socially responsible world. These are not, of course, incompatible objectives.
Transitioning to cleaner energy, reducing food and product miles, extending the use of recycled materials, onboarding more diverse and inclusive suppliers all speak to the issues that matter to consumers (and shareholders) and can therefore boost brand and drive revenue. At the same time, a more informed and sustainable approach through the entire supply chain tackles issues of dependency and can reduce commercial risk.
Ultimately, enterprises have never operated in isolation. We are all part of an extended and interdependent ecosystem. Which is why Coupa has worked so hard to develop its global community, and why Accenture and Coupa have come together to extend the value of BSM beyond the purview of the procurement function, throughout the business and into socially responsible supply chains.
Spend trends and smarter procurement
Let’s start with the bottom line.
It’s important to deliver ample cost savings, accelerate digital transformation, and to tackle organisational silos to collectively achieve better results. It’s urgent to gain greater visibility and control over spend and liquidity, to mitigate third party risks and increase agility to adapt as spending priorities change.
All of which requires a re-think in terms of how enterprises surface and control their spend.
It’s not just about what organisations are spending, of course. Where they’re spending matters too. During the pandemic, nearly 75% of organisations faced supply chain problems — and many remain highly vulnerable to sudden shifts in how they operate.
This is unlikely to be a quick fix but enterprises need to find ways to make their supply chains far more customer centric to drive growth and sustainability, while at the same time continuing to reduce overall supply chain operating costs and risks. For many, BSM offers a way to do it all.
BSM steps into the spotlight
Rather than a collection of disparate point solutions, BSM is a critical process area that leverages the value of shared data across related business processes. All types of business spend and related processes come together in a single platform — from indirect and direct materials, travel and expenses, contingent labour, treasury, supply chain finance, etc. — with a single, common data model across all customers and suppliers.
This single version of the truth — also referred to as Closed Loop Spend Management (CLSM) — gives enterprises the ability to identify excess spend right across the enterprise and reinvest it back across the business. But there’s more.
In a BSM system, for example, information about suppliers and other third parties is shared across Procurement, Accounts Payable, Treasury, Sourcing, Legal, HR, IT, and end users across the organisation. To the benefit of all.
This ability to create a single version of the truth means, of course, that not only can enterprises gain the spend visibility and control they need to adapt spending priorities, but the supply chain insights also generated can tackle disruption and help the enterprise embed and deliver sustainable by design principles to mitigate risk.
The benefits speak for themselves:
- 10–15% sourcing reduction across direct and indirect spend
- 20–25% reduction in operating costs
- >15% reduction in selling, general and administrative (SG&A) expenses
Enabling integration and driving adoption
But change can be viewed with scepticism — particularly from IT organisations tasked with implementation, who may question the need to move away from existing ERP P2P applications. That’s only natural. But procurement teams know that while ERP systems are great for some applications, they’re not always perfect for their purpose.
So it’s important to stress that BSM systems such as Coupa add value to, rather than aim to replace, ERP systems. Much like other SaaS platforms in the stack do — Salesforce for Customer Relationship Management (CRM), ServiceNow for IT Service Management, etc.
There’s an adoption advantage for those outside the specialist procurement function as well. Today’s digital natives expect simple to use applications that require little or no user training. If they don’t find it, they won’t use it. This has been the Achilles heel of ERP P2P modules and contributes to their typical 30–40% user adoption rates. To deliver the 360º value that characterises the BSM approach, adoption needs to extend across the enterprise. And that means delivering the kind of user experience offered by Coupa.
Responsibilities beyond the enterprise
At a time when being a good corporate citizen is high on shareholder and boardroom agendas, the reputational and economic impacts of taking an environmental or social stance can and should be considerable.
Responsibility is key, as Accenture’s Kathryn Mouton highlights in her blog, it’s easy to bake to bake responsibility into procurement.
By embedding governance, controls, and visibility within the procurement process, it becomes simple to buy responsibly. Tags can be added to every product a company buys so it’s clear, for instance, whether a product is from an indigenous supplier, made from recycled materials, or contributes to social good.
Responsible-minded goods can automatically appear at the top of search results, and sustainability managers can be required approvers for certain categories of products. This is a behavioural change — but it’s an easy one to make as it’s enabled in Coupa. There are other opportunities too: allowing users to see a supplier’s overall sustainability score, as well as specific scores on the environment, labour and human rights, and company ethics.
All of which has an impact way beyond the bottom line.
Delivering 360° value with Coupa and Accenture
Ultimately, visibility of spend is just the beginning. The bold new ways of working offered by BSM have the potential to deliver great experiences and increased value right across the organisation. This is saving enterprises money which can be reinvested back into business change programmes. But it’s doing something more — influencing cultural change within supplier bases and helping to drive a more ethical and sustainable approach to doing business across the world. This is a truly strategic shift that is as much about reputation and corporate social responsibility as it is operational excellence and shareholder value. And procurement is the catalyst for it all.
As a Coupa Global Elite Partner, Accenture harnesses Coupa’s BSM platform to help optimise spend, while gaining a wider view of the supply chain and combining live market data and community insights from more than 2000 Coupa customers to determine more cost-effective operational paths forward. Fusing Accenture’s competitive insights, peer-to-peer benchmarking, robust analytical toolset, and new digital-first ways of working alongside Coupa’s transactional controls, process automation, and real-time analytics empowers enterprises to spend smarter and more responsibly.
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