Ariba Releases 2008 Spend Management Priorities and Challenges
Managing Global Supply Base, Extending Reach of Spend Management Emerge as Key Objectives in Annual Survey of Procurement Executives
SUNNYVALE, Calif.--As spend management has become increasingly global, so too have the priorities of those responsible for driving it. According to the 2008 Priorities and Challenges in Spend Management, an annual survey conducted by Ariba, Inc. (Nasdaq:ARBA), the leading spend management solutions provider, what used to be mostly about cost reductions and process efficiencies is now focused squarely on managing a global supply base to minimize risk and extending the reach of spend management to accelerate and increase bottom-line results.
“Ten years ago, spend management was a procurement function aimed solely at saving money,” said Hari Candadai, Director, Solutions Marketing, Ariba and author of the research. “Today, it is a strategic business imperative that companies of all sizes are leveraging to enhance corporate value, improve competitive advantage, and mitigate the risks of doing business in a global economy.”
The 2008 Spend Management Priorities and Challenges
Leveraging its global roster of more than 600 customers, Ariba polled procurement, finance, and business executives across a range of industries to understand their goals for the coming year. What emerged from the research was a growing sense of urgency among companies to make spend management a truly global function.
For the first time in the five year history of the Ariba Priorities and Challenges in Spend Management survey, cultivating and managing a global supply base and extending the reach of spend management both functionally and geographically ranked among the top ten priorities of respondents.
The Top Ten Spend Management Priorities
1. Deliver measurable results that correlate to financial metrics
2. Access and analyze spend data
3. Identify savings opportunities faster
4. Increase visibility into spend across categories
5. Support multiple business units and geographies
6. Complete projects on time and within budget
7. Recruit, audit and measure the performance of a global supply base
8. Build internal commitment for spend management programs
9. Drive adoption and use of spend management solutions across the enterprise
10. Extend reach of spend management without adding resources
The Top Ten Spend Management Challenges
1. Access and analyze spend data
2. Extend reach of spend management without adding resources
3. Deliver measurable results that correlate to financial metrics
4. Automate, optimize and standardize procurement processes
5. Drive adoption and use of spend management solutions across the enterprise
6. Increase visibility into spend across categories
7. Identify savings opportunities faster
8. Ensure compliance with established processes
9. Recruit, audit and measure the performance of a global supply base
10. Support multiple business units and geographies
“Identifying savings and driving them to the bottom line are still the chief objectives of today’s spend management professionals,” Candadai said. “But to deliver on these goals, many are realizing they need to implement solutions and processes that enable them to extend the reach of spend management and to collaborate with the global supply base for joint value and competitive advantage.”
Across the board, respondents to the 2008 Ariba survey ranked extending the reach of spend management to support additional business units and geographies as a top priority. But they admit they are constrained by limited resources, skills and budgets.
“Although they understand the value of spend management, many companies fail to invest in the internal resources required to drive programs on a global scale,” Candadai said. “As a result, an increasing number of spend management executives and professionals find themselves looking to external sources of category expertise and market intelligence in order to meet the objectives that have been set for them.”
Implementing solutions and processes to develop, audit and measure the performance of a global supply base also rated as a key objective for the coming year. Yet, in the face of tight budgets, those polled say they struggle to prioritize this against other investments.
As Candadai notes, spend management professionals still rank driving cost reductions as their top priority in the year ahead. But they are challenged to translate these savings into bottom-line profitability measurements that correlate to financial metrics.
“Controlling costs is a struggle for all companies, and spend management is often seen as a silver bullet solution,” Candadai said. “The reality is, procurement can identify savings, but finance must ultimately get them to the bottom line. And this requires a strong partnership between the two functions which the majority of the executives surveyed struggle to create.”
Similarly, respondents indicated that although spend management is viewed as a strategic initiative and critical driver of future success by their companies, they are challenged to enlist the support of key executives and users at the cross-functional level necessary to drive broad adoption.
“Spend management is a journey. And companies will inevitably encounter challenges as they move along the path,” Candadai said. “But with the right priorities and solutions in place to drive them, they can enable the people, processes and technology needed to achieve their goals.”
To hear more about what’s top of mind for spend management executives and professionals, tune in to the Ariba 2008 Spend Management Priorities and Challenges podcast available on Supply & Demand Chain Executive at www.sdcexec.com
About Ariba, Inc.
Ariba, Inc. is the leading provider of spend management solutions to help companies realize rapid and sustainable bottom line results. Successful companies around the world in every industry use Ariba Spend Management™ software and services. Ariba can be contacted in the U.S. at 1.650.390.1000 or at www.ariba.com.
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