As a senior financial executive, you are probably asking yourself what you can do next to make a significant impact on your company’s profitability. Many executives in your position are looking at Spend Control as a likely next move.
Spend Control is a structured business process that dramatically increases the control and visibility you have over what your organisation spends for all types of goods and services. It’s a process you use to significantly reduce costs by ensuring that only truly needed and properly authorised goods and services are purchased, and by making sure you obtain best possible value when they are. It also serves to dramatically reduce invoice processing time, effort and cost in AP, as well as creating greater efficiencies in procurement and throughout your organisation. Spend Control is a business process that has been enabled in recent years through information technology generally referred to as eProcurement. But you may be wondering if it is possible to implement effective Spend Control without first replacing your existing Enterprise Resource Planning (ERP) system. You know from experience that process can be long, expensive and risky. You don’t want to do it if you can possibly avoid it. You may also realise that just swapping out your basic financial systems won’t, in itself, enable Spend Control. Something more will be needed even with a new ERP system.
The good news is that you can deploy highly effective Spend Control around just about any core financial management or ERP system. In fact it makes good sense to use an eProcurement system that is outside the bounds of ERP for two important reasons:
1. Spend Control is about managing business processes that are outside the realm of ERP. For instance, it manages the processes before a PO or invoice hits ERP and before a supplier is added to ERP. And it uses a whole new range of information about suppliers, RFPs, contracts and catalogues that is not even in your ERP system.
2. Spend Control involves many more people than those who use ERP. Parts of your eProcurement system will be used by practically every employee in your organisation. Other parts will be used by your suppliers who are outside the four walls of your organisation.
Because the business processes are so different, and because so many people will always be ‘non-expert’ users, the nature of a good eProcurement system is quite different from the nature of most ERP systems. Modern eProcurement systems have been designed to remove complexity and guide users through intuitive step-by-step processes – a different approach to the transaction processing model within most ERP systems.
Fortunately, most eProcurement systems have been designed to make the touch points with your core financial and operational systems limited and non-invasive, making it quite practical to add them to existing financial management and ERP systems.
At AdvanceNet, we understand both the technical and people aspects of successful Spend Control. And we offer a number of managed services to help you get started and/or manage non-core activities over time. Contact us today to discuss how we can help you achieve your Spend Control goals within your own unique organisational and information systems environment.