In our previous two installments, we’ve discussed the spend-under-management (SUM) framework. Specifically, how it provides executives with a simple outcome-based model that drives the necessary organizational changes needed within the procurement function to capitalize on unrealized savings. SUM transforms what can be a complex and overwhelming process for many procurement teams down to a few basic principles with clear action steps.
Here is a recap of some of the benefits:
- Alignment of indirect spend objectives with core financial metrics
- Defined and detailed spend at a granular level utilizing robust spend analytics
- Increased visibility and accuracy in forecasting
- Improved spend coverage of 85 percent or more
- Cost savings targets linked directly to financial objectives
- Spend Under Management Part 1: Connecting Procurement to Your Core Business
- Spend Under Management Part 2: The 5 Key Principles of Proper Spend Management
- Spend Under Management Part 3: Achieving the ‘Closed-Loop’ Spend Management Model
Spend Analytics & eSourcing: Uniting Dynamic Capabilities for Optimal Spend Management in Procurement
Let’s expand on the power of spend analytics and eSourcing, combined. Together, they create a closed loop spend management ecosystem that helps organizations (and its users) identify and manage risk, increase supplier diversity, maximize efficiency, and skyrocket savings for the company.
Traditionally, organizations have leveraged and operated eSourcing and spend analytics independently to achieve different, yet related, outcomes. Spend analytics provides business users with critical business intelligence and visibility into enterprise-wide spend, answering crucial questions like: How much am I spending and with who? Across which categories? This data, when properly aggregated and analyzed, can help inform category management and sourcing strategies key to capture savings opportunities consistently. But while obtaining this visibility is critical, it’s only the first step towards achieving key spend management objectives like improved management of direct or indirect spend categories (tail spend) or supplier diversity and ESG / CSR initiatives.
Read More:- Guide to Procurement Management
eSourcing, on the other hand, is the vehicle for action. By increasing your capabilities to host and manage complex RFx events and leveraging advanced sourcing optimization strategies, you can begin to capture the low-hanging fruit opportunities first identified during spend analysis, while aligning organizational objectives (like cost control and corporate mandates around supplier diversity and ESG / CSR) with ongoing spend.
Having spend analytics without eSourcing, or eSourcing without spend analytics, makes achieving the transformational outcomes you seek more difficult and prevents you from tangible ROIs on your technology investments. After all, what are you going to do with your newfound spend visibility and data? Ideally, you’ll use that information to drive new sourcing projects that improve your overall spend profile and enable you to achieve savings targets. And most people that utilize eSourcing will want the spend analytics capability to help them monitor the impact of their sourcing efforts.
Historically, users have struggled to achieve meaningful outcomes through the integration of individual technologies not necessarily built to work in unison. The costs to integrate and manage on an ongoing basis are often high, and without seamless integrations and uniform interfaces, user adoption is often low. Thanks to the advancement of composable Spend management technology, procurement teams now have more options than ever to design a solution that works within their current environment, alongside existing technology investments, to achieve long-term, sustainable value creation.
Introducing the Strategic Spend Terminal
Simfoni’s new Strategic Spend Terminal (SST) is an integrated solution that elevates spend management to a new level by combining world class spend visibility with sourcing pipeline, project management, and streamlined sourcing execution. The only software of its kind on the market, Simfoni’s SST is designed to be a complete platform for closed-loop strategic spend management and solves the challenges of managing and optimizing all types of spend across your entire organization.
All users have direct access to the SST dashboard, providing actionable and relevant data and insights, while eliminating the need for multiple systems and interfaces. Users can easily report on spend in real-time, spot opportunities for savings, and get complete visibility across the entire spend management cycle. The SST is the first fully integrated solution that includes best–in–class functionality throughout.
Simfoni’s technology is AI-powered and leverages machine learning to deliver savings opportunities that can be easily flipped into the sourcing pipeline for resource planning and scheduling. Then the event can be sent straight into the sourcing solution to realize the savings identified earlier.
The SST collects and analyzes data from a company’s spend history, supplier performance, market data, and other sources to identify opportunities for cost savings, process efficiencies, and risk reduction. The tool also allows users to simulate various scenarios and evaluate the impact of different strategies on their bottom line.
Fully responsive, intuitive, and scalable to meet the needs of any organization, the SST also integrates with existing systems. Once your organization is using the SST, it can be easily extended to incorporate additional components into your spend management program, such as award optimization, diversity reporting, risk analysis, and sourcing pipeline, and even tail spend management. This opens a wide range of options that allows you to customize the SST to your unique needs and enhance the value of spend management and procurement within your organization.
The benefits of using Simfoni's Strategic Spend Terminal include:
- Cost savings: By analyzing spending patterns and identifying areas for improvement, the SST helps companies identify and prioritize savings opportunities and reduce their costs. This can lead to significant savings over time.
- Improved supplier relationships: The SST helps businesses to evaluate supplier performance and identify opportunities for collaboration and innovation. This can lead to stronger relationships with key suppliers and better outcomes for both parties.
- Process efficiencies: The SST streamlines the procurement process by automating tasks, reducing manual data entry, and providing real-time insights. This can save time and improve accuracy, allowing procurement teams to focus on more strategic tasks.
- Risk reduction: The SST helps businesses to identify and mitigate risks related to suppliers, contracts, and regulatory compliance. This can help companies avoid costly mistakes and protect their reputation.
- Better compliance: Enhanced visibility provides insights into areas of your business that might not be leveraging preferred suppliers. You can use this information to drive better behavior throughout your organization.
Read More:- Comprehensive Guide to Artificial Intelligence in Procurement
Overall, by combining analytics and eSourcing capabilities, Simfoni’s Strategic Spend Terminal provides businesses with the data and insights they need to make informed decisions and optimize their spend management program, all in one place. The result? Significant cost savings, process efficiency, and risk reduction, helping businesses achieve their strategic goals and remain competitive in their industry.
To learn more about Simfoni’s comprehensive new Strategic Spend Terminal, or more about Spend Under Management (SUM), schedule a demo with one of our procurement experts!