Spend Management Software: 5 Reasons Why Your Procurement Team Can’t Do Without It
Managing spend in large global enterprises – with hundreds of categories and thousands of line items – can be complex and difficult. Many enterprises still have manual processes and legacy systems that require a lot of time and effort to execute routine transactions. All this not only makes spend management more difficult, but also leads to several other challenges, such as low spend visibility, poor spend compliance, higher transaction costs and longer cycle times.
Increasingly, it is possible to automate all these transactional processes using spend management software. Automating spend management offers a number of strategic, operational and financial benefits. Here are five reasons why you should consider spend management software for your procurement team.
1. Greater Process Efficiency
Spend management software helps reduce the time and effort required to perform routine spend management activities. An end-to-end spend management system can help you optimize all source-to-pay (S2P) processes, such as spend analysis, strategic sourcing, contract management and supplier relationship management, etc., and allows your procurement team to focus on driving strategic initiatives and achieving organizational goals.
2. Higher Spend Compliance
Spend management software allows you to bring more spend under management and ensure that all the purchases are made using approved contracts with proper approvals. Users can make purchases using pre-approved online catalogs without any paperwork or lengthy approval processes. With all source-to-pay processes digitized and automated, everything can be easily tracked and reported. This prevents off-contract or maverick spend and boosts spend compliance.
3. Improved Spend Visibility
To make the right business decisions, procurement professionals depend on accurate and timely data. Spend management systems help increase the amount of spend under management and enable access to spend information for users at all levels across the enterprise. These capabilities enable increase spend visibility, accountability and facilitate cross-functional collaboration.
4. Better Risk Management
The best way to mitigate risk is to identify it in advance and take pre-emptive action before the risk occurs. Spend management systems enable the identification of risks through detailed analysis of supply market trends, contracts and supplier performance scorecards. With a comprehensive spend management platform like SMART by GEP, enterprises can monitor performance against SLAs in supplier agreements; get automated supply-market related alerts and receive regular contract status updates to identify and limit risk.
5. Increased Mobility
PaaS-based spend management platforms allow users anytime, anywhere access to business data on any device. These systems enables users to access customized spend dashboards, pull up ad hoc reports or even approve purchase orders on the move, facilitating greater flexibility, improved and faster decision-making and shorter cycle times.