Following the global decline in economic activity due to the COVID-19 pandemic, a recession is imminent – take action, implement a proactive spend management strategy to ensure that you’re better prepared and have the systems in place to maintain business operations and protect working capital.
Published by Fraxion
Organizations that have already optimized their business models or adopted digital technologies such as cloud spend management solutions, might be more prepared to mitigate risks during a crisis than those that have not.
Cloud-based digital technology automates various business functions without dependency on office-based servers; early adopters of such technology may prove to have a greater advantage over competitors once the global economic climate has stabilized. Being able to adapt and shift focus without hesitation can be challenging, but having efficient risk management tools in place to alert businesses and offer solutions in the form of spend visibility and analytics may provide some relief and the opportunity to mitigate business risks.
Companies worldwide have been negatively impacted by the COVID-19 pandemic, especially under imposed lockdowns and trading restrictions and will find it difficult to operate and recover.
When the ability to control revenue is reduced, cost reduction is often the only leverage that businesses can use to manage profitability, and, in some cases, survival. In light of current events, this is an ideal opportunity to accelerate your digital transformation and become spend management technology-centric.
If your organization has not yet adopted a cloud-based spend management software tool, it is certainly not too late.
In a recently-conducted survey, the results indicated that approximately 79% of businesses that utilize cloud functionality have reported savings and an improvement in productivity.
With our current global crisis, there’s no better time than the present to get started on optimizing your business for cloud-enabled remote productivity. These technologies are not difficult to set up and time-to-value is rapid.
These 10 spend management technology-enabled risk mitigators can assist your business by keeping you as operational as possible during these difficult times.
1. Cloud flexibility, agility and scalability
The ability to scale and adapt is greatly improved via cloud or remote functionality, whereby the business is able to shift emphasis and adapt as and when the market demands, experiencing significant productivity gains.
2. Cost control
A spend management solution's cost control functionality provides the necessary insight to reduce discretionary or non-essential expenditure. Knowing where to cut costs is imperative, especially when differentiating between strategically-critical costs and non-essential costs. Spend management software provides in-depth intelligence and analytics to help you identify if your business is ready to commit to expenditure—whether for future business growth or for current operational reasons.
3. Vendor management
For an added tier of confidence, your spend management software should enable reporting that clearly quantifies spend values and purchasing frequency with your vendors. By leveraging this data, you will be able to negotiate more favorable terms with your selected vendors, manage supplier take-on, or consolidate vendors to limit the numbers you purchase from.
4. Maintain your budgets and curb overspending
In response to a crisis, a re-prioritization of your budget will be vital. In an effort to maintain the defined budgets, providing managers with budget insight at decision points will empower them to make informed decisions. With visibility into available and committed spend, approval limits and spending policies enforced, configured budget limits cannot be breached.
5. Improve visibility
This is the key to identifying cost and risk reduction opportunities. Relying on your spend management tools for insight into trends and spending behavior can help you to make strategic purchasing decisions. By tapping into powerful business intelligence, you are able to act preemptively, identifying when and where to assign budget and reduce risk.
6. Analyzing spend
In order to assess where costs need to be reduced, you need to understand how your business spends money. Spend analytics provide the data necessary to reduce discretionary or non-essential expenditure.
7. Policy compliance
Once you have identified the areas in which your organization spends the most, you will need to implement spend policies across your business. This ensures that employees adhere to the spending rules at every level.
8. Risk management
Risk management in an organization is focused on identifying potential threats to profitability or financial stability, and strategies on how to deal with them. The planning and deployment of contingency plans to deal with risks is crucial for a business. Spend management software has an important role to play in implementing these contingency plans.
9. Manage travel & expenses
If left unchecked, these expenses can contribute greatly to unnecessary expenditure. With mobile claims and document uploads to verify expenses, automated solutions can save businesses time and money by eliminating time consuming paper-based expense processes and enforcing policy compliance.
10. Remote capability
With remote optimization your business is better equipped to increase profitability and improve organizational efficiency.
The upshot
Future proof your business by deploying a complete cloud spend management solution that provides vital mobility, visibility, agility, analysis and control.
The decisions you make today could be the defining factors between you and your competitors tomorrow. If you’ve been delaying the digital transformation process, now is the time to accelerate it, to take advantage of the key features you will need to prosper under the current economic and operational pressure.
Take action that will enable the best business outcomes today, and when life as we know it returns. Adopt a proactive rather than reactive spend management strategy to ensure you’re always prepared and have the systems in place to maintain business operations and protect working capital.
