Companies big and small need all the help they can get when it comes to creating and preserving value in the course of doing business. After all, nobody wants to throw their money away—especially in uncertain times when every dollar makes a real difference. For both small businesses and corporate giants, competitive strength in the modern global economy increasingly relies on digital literacy, a commitment to continuous improvement, and optimized processes that boost savings, reduce waste, and prioritize proactive, rather than reactive, strategies.
One way to build such strength is to implement the right comprehensive spend management software solution as part of your overall business process management plan. It can be incredibly effective in boosting productivity, eliminating waste and needless expense, and generating value through digital transformation. But in order to reap these benefits, you must first understand what spend management software is and the many specific ways in which it makes these improvements possible.
What is Spend Management Software?
If you don’t have visibility into your spend, or control over it, you’ll probably find yourself scrambling to cover debts, tightening your belt, or even facing bankruptcy. The same is true for businesses, where procurement teams rely on spend management tools to keep company spending under control and ensure they’re getting maximum bang for each buck.
The overall goals of spend management are simple:
- Obtain goods and services for an organization.
- Maximize return on investment (ROI).
- Minimize waste and expense.
- Generate both direct cost savings and value for the organization in the form of process improvements and insights that can be used to further that organization’s goals.
Spend management software solutions like PurchaseControl support these goals through a blend of technologies—artificial intelligence; deep data analytics; process automation—designed to eliminate errors, waste, and expense while simultaneously maximizing productivity, strategic intelligence, and value creation throughout the procure-to-pay (P2P) process.
It is a key component in any company’s larger digital transformation strategy, and a foundational component of effective business process management through introduction of important concepts such as continuous improvement, data-driven strategic planning, and centralized, real-time collaboration and communication.
“Artificial intelligence and, more specifically, machine learning are used to streamline and automate a wide array of procurement processes, from generating requisitions and purchase orders to verifying invoices via automatic three-way matching.”
How Spend Management Software Benefits Your Business
As one of the primary technology tools companies can use to consolidate their spend management and integrate its improvements with their overall systems, spend management software supports a centralized and comprehensive approach to transforming procurement into a value generation hub.
Artificial intelligence (AI) and, more specifically, machine learning are used to streamline and automate a wide array of procurement processes, from generating requisitions and purchase orders to verifying invoices via automatic three-way matching. Paired with deep data analytics, they also provide more powerful and user-friendly tools for real-time management of more complex business processes such as supplier management, contract lifecycle management, and supply chain optimization.
Let’s take a closer look at some of the specific ways in which an eProcurement software solution like PurchaseControl can help you save time, improve user experience, and ensure company spending is focused on value as well as savings.
- Greater Overall Efficiency in Procurement Processes
Procurement software uses process automation, iterative improvement, and centralized data management and analysis to increase the speed and accuracy of routine processes throughout the P2P cycle, including:
- Spend control.
- Closed buying environment automatically suggests the best vendors and pricing for the goods and services your company purchases.
- Unnecessary purchases, maverick spend and invoice fraud are substantially reduced or eliminated.
- Increased accountability and more accurate and complete expense reports.
- Greater accuracy and spend visibility improve downstream processes like cashflow management, budgeting, and financial reporting/auditing.
- Fully automated processing of high-volume, time-consuming, and repetitive tasks.
- Purchase order creation (including automatic population of all relevant information, minimizing the need for data entry).
- Approval workflows (including contingencies and alerts to minimize bottlenecks and trim cycle times).
- Invoice processing (duplicate, erroneous, and lost invoices are eliminated).
- Cost savings captured through reduced invoice, purchase order, and administrative expenses.
- Strategic sourcing
- Automatic matching of potential suppliers for new and existing projects.
- Clear and complete information for higher-quality responses to requests for proposal (RFPs).
- Full spend visibility and access to historical data allows for strategic changes to capture greater savings, set better terms, and minimize risk exposure.
- Real-time, web-based spend analysis.
- On-demand advanced analysis of all spend data.
- Spend analytics reveal hidden patterns and opportunities for additional cost savings.
- Improved user experience with web-based dashboards accessible from mobile and desktop devices, across platforms.
- Contract management
- Automated population of vendor data from a centralized database
- Templates include pre-approved legal copy.
- Analysis of vendor performance and compliance data as well as spend data strengthens your team’s negotiation position.
- Supplier relationship management (including, for example, vendor onboarding through the use of automated vendor portals).
- Improved Risk Management
Avoiding needless expense is as important as keeping track of what you’re actually spending. Implementing a spend management platform helps reduce risk in a number of ways:
- Comprehensive analysis of spend data, as well as market trends, social media and news feeds, customer buying habits, and supplier performance and compliance metrics.
- Key performance indicators (KPIs) can be established to measure internal process efficiency and overall spend control against firm benchmarks.
- KPIs can also be used to track and evaluate vendor performance and compliance.
- Removing or rehabilitating underperforming or non-compliant vendors from your supply chain helps insulate the company against expense, as well as compliance and reputational issues.
- More complete and accurate data simplifies not just financial forecasting and reporting, but internal and external audits.
- With role-specific access for all stakeholders, communication and collaboration improve, simplifying supplier relationship management, encouraging strategic partnerships, and reducing the risk of costly misunderstandings and reputational damage.
- Process optimization reduces this risk further by ensuring invoices are matched, approved, and paid on time. More discounts are captured, strong vendor relationships are built and maintained, and additional savings opportunities emerge over time.
- Lower Overall Costs for Goods and Services
The overlapping impact of centralized data management, customizable process automation, and powerful analytics rapidly generates savings for your procurement team and your business as a whole.
For example, beyond the value and savings generated by automating your P2P workflows, the elimination of physical materials in favor of web-based procurement software supports sustainable procurement and generates substantial savings by reducing your company’s environmental footprint. Working with environmentally-minded suppliers can increase the savings further if you negotiate discounts based on volume or exclusivity.
And it will be much easier to negotiate those kinds of savings, thanks to the additional contract management strength created by having total spend visibility and KPIs for vendor performance and compliance.
The more well-developed your supplier relationships are, and the clearer your vision of your upcoming needs and expenses, the more effectively you can secure lower prices at the negotiation table.
- A Fully Integrated Software Environment
The best spend management platforms don’t just centralize your spend data and automate your purchasing processes. They integrate with your existing enterprise resource planning (ERP) solutions, accounting applications, and customer resource management (CRM) packages, as well as your office suites and communication software, to create a central hub where everyone has level-appropriate access to all the information they need for:
- Cost-effective purchasing of goods and services.
- Collaborative initiatives supporting overall organizational goals.
- Implementation of digital transformation and best practices across the entire organization.
- Stronger Business Intelligence
Smarter spending and sourcing are a natural byproduct of having control over your processes, insights supported by advanced analytics, and a procurement team that’s free to focus on valuable strategic planning and relationship building instead of data entry or chasing exceptions.
But management benefits, too, as they can leverage those insights to make smarter investment and innovation decisions. They can review internal practices, vendor performance, and overall spend patterns, combined with data drawn from a multitude of other sources, to make decisions and implement policies that improve not just efficiency and profits but the competitive agility of the organization and the resilience of its supply chain, ensuring business continuity is protected when unexpected business disruptions—whether natural disasters, pandemics, cyberattacks, or international conflict—come to call.
Capture More Savings and Boost Productivity with Spend Management Software
Procurement pros around the world know it’s not just what you’re spending, but how you spend it that affects your company’s ability to generate value and compete effectively. Expense management is much more effective, intuitive, and, well, manageable when you invest in a spend management solution.
From your P2P workflow to supplier management to contract lifecycle management, every aspect of the purchasing process benefits from automation, analytics, and AI. By taking control of not just company spend, but all of the financial activity and data flowing in and out of your company, you can make continuous improvement, process optimization, and more strategic decision making and relationship management part of your standard operating procedures—and generate a stronger bottom line along with lasting value for your business.
PurchaseControl Helps You Streamline All Your Procurement Workflows for Value and SavingsFind Out How