While CIOs decide which projects are most important and urgent, the question often arises, “How do we avoid speculative or unproven technology?”
Today the budgets are in flux. Operations are pending. Some of the investments that were planned yesterday are now out of the question, and there is a greater need to limit expenses and risks. Still, CIOs still have a hard time answering the speculative question because to solve the problem they would need to know what their organization is spending money on in its many isolated businesses and departments – and many still do not.
The financial history of how a company buys technology and services often requires a detective to work together. The same applies to the risk profile. The main components are spread across dozen of core systems and workflows and thousands of suppliers.
To understand what is happening and achieve all of this in a world determined to move to the cloud, there is Business Spend Management (BSM). With it, you not only illuminate and manage the expenses of your own company, but also get a rare insight
your colleagues’ spending patterns. This gives CIOs the data they need to control
Business – and a sense of what is speculative and what is not.
BSM is a comprehensive approach and software category for managing all the ways employees spend money – through procurement, invoicing, spending, and payments – and the associated processes for initiating, controlling, and optimizing those spending.
BSM is necessary because this data is distributed over many systems. Virtually nothing about how companies spend is designed for efficiency, and as IT organizations around the world are being asked to cut budgets and wonder where it’s coming from, it pays to have a data-driven answer.
With BSM, your organization can:
- See what it’s spending in silos
- Reduce bloated budgets and free up capital
- Reduce the risk to partners and third parties
- Compare yourself to your peers by using AI
How BSM came about
The challenge with fragmented data has always been that organizations need to balance flexibility with complexity. When you buy best-of-breed products, you get many systems, tons of connectors, and fragmented data. However, when you buy a large system like a monolithic ERP, you gain simplicity, but you sacrifice the flexibility of the best providers, each of whom are very good at one.
The ideal state for most businesses is somewhere in between. After the last three decades of technological advancement, most companies have ended up there.
ERP was the first example of integrating related business processes. ERPs were seen as a big step forward, but not seen as urgent, until the year 2000 saw sudden mass adoption.
CRM was developed to systematize front office work and to close ERP gaps. Companies like Siebel Systems first turned an ecosystem of contact databases into a comprehensive source of customer data. CRMs are then integrated with ERPs for financial reporting.
Following the CRM template, HCM was designed to consolidate HR point solutions into a single source of employee data. It also got tied into the ERP, and it became clear that each line of business needed a fair balance between flexibility and complexity in order to have its own data truth source.
BSM emerged to fill the last void no other system can – a source of primary supplier records. Following the same pattern, this time it offers a new, critical source of financial truth. Like ERPs and Y2K, BSM gained prominence during the pandemic that exposed separate and manual processes. To reduce spending, control third party risk, and increase liquidity, companies need to understand and digitize this data.
In contrast to its predecessors, BSM also does something unique: It can quickly achieve a demonstrable return on investment. As a place of financial control for the company, financial inefficiencies are quickly resolved.
Harnessing the power of community intelligence
And the best part about it? Community intelligence powered by AI. For over a decade, Coupa has been securely collecting anonymized and normalized data on how companies are spending. With nearly $ 2 trillion in spending on the platform, Coupa can benchmark your spending against similar organizations. Or look for suppliers based on trusted and verified reviews.
This is just the beginning of the depth of the insights you can get from community intelligence.
The combination of BSM and Community Intelligence is enough to help medium-sized to large companies reduce waste and discover hidden budgets that they can either save or use for other purposes. In today’s environment, such savings are welcome and necessary.
Coupa, Head of Business Spend Management, gives organizations the visibility, control, and insights they need to better manage their expenses, making it easier for IT to partner with business. For more information on the Coupa platform, please visit https://www.coupa.com/.
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