As CIOs get down to deciding which projects are most important and most urgent, a common question arises: “How do we avoid speculative or unproven technologies?”
Today, budgets are in flux. Operations are in limbo. Some of yesterday’s long-planned investments are now out of the question, and there’s a greater need to curtail spending and risk. Yet CIOs still find the speculation question difficult to answer because to resolve it, they’d have to know what their organization spends money on, across its many siloed business units and departments—and many still don’t.
The financial story of how an organization purchases technology and services often requires a detective to piece together. The same goes for its risk profile. The primary components are fragmented across dozens of core systems and workflows, as well as thousands of suppliers.
To understand what’s happening and accomplish all of that in a world determined to move to the cloud, there’s Business Spend Management (BSM). With it, you not only illuminate and manage your own company’s spend, but you get a rare peek into
the spending patterns of your peers. This gives CIOs the data they need to steer the
business—and a sense of what’s speculative and what’s not.
BSM is a comprehensive approach and software category for managing all the ways employees spend money—through procurement, invoicing, expenses, and payments—as well as the related processes to initiate, control, and optimize this spend.
BSM is necessary because that data is spread across many systems. Practically nothing about how companies spend is architected for efficiency, and as IT organizations the world over are asked to cut budget and wonder where it will come from, it pays to have a data-driven answer.
With BSM, your organization can:
- See what it’s spending across silos
- Cut bloated budgets and free up capital
- Reduce partner and third-party risk
- Benchmark itself against peers by leveraging AI
How BSM came to be
The challenge with fragmented data has always been that businesses must balance flexibility with complexity. If you buy best-of-breed everything you wind up with many systems, countless connectors, and fragmented data. But if you buy one big system, such as a monolithic ERP, you gain simplicity but sacrifice the flexibility of best-in-breed vendors that each do one thing very well.
The ideal state for most companies exists somewhere in between. After the last three decades of technological advance, that’s where most businesses have ended up.
ERP was the first example of integrating related business processes. ERPs were seen as a big step forward but considered non-urgent until Y2K drove sudden mass adoption.
CRM emerged to systematize front-office work and address ERP gaps. Companies like Siebel Systems first turned an ecosystem of contact databases into a full-blown source of customer record. CRMs then integrated with ERPs for financial reporting.
Following in the pattern of CRM, HCM emerged to consolidate human resources point solutions for a single source of employee record. It too plugged into the ERP, and it became clear that a proper flexibility-complexity balance was for each business unit to have its own source of data truth.
BSM has emerged to fill the final gap that no other system can—a source of supplier primary record. In the same pattern, it provides a new, critical source, this time, of financial truth. Like ERPs and Y2K, BSM has exploded in importance during the pandemic, which has exposed disconnected and manual processes. To curtail spend, control third-party risk, and increase liquidity, companies must understand and digitize this data.
However, unlike its predecessors, BSM also does something unique: It can quickly produce a verifiable return on investment. As the locus of financial control for the business, it quickly roots out financial inefficiencies.
Tapping into the power of Community Intelligence
And the best part? Community Intelligence powered by AI. For over a decade, Coupa has been safely gathering anonymized and normalized data on how businesses spend. With nearly $2 trillion of spend on the platform, Coupa has the ability to benchmark your spend against similar organizations. Or, seek out suppliers based on trusted and verified ratings.
This is just the beginning of the depth of insights you can glean from Community Intelligence.
The combination of BSM and Community Intelligence is enough to help medium-to-large organizations reduce waste and detect hidden budget they can either save or repurpose. In today’s environment, savings like that are welcome and needed.
Business Spend Management leader Coupa gives companies the visibility, control, and insights they need to better manage their spend, and in so doing, facilitates IT and business unit partnership. For further information about Coupa’s platform, go to https://www.coupa.com/.
Click here to read this ongoing series of interviews about how the role of the CIO is evolving as digital transformation initiatives mature.