Spend Under Management:
What is Spend Under Management?
Spend Under Management (SUM) is an enterprise initiative that aims to manage 85% or more of a company's spend, resulting in significant cost savings that can be reinvested or impact EPS.
Implementing SUM can lead to cost savings by reducing inventory, improving response times, reducing staffing expenses, and optimizing on-time deliveries. SUM is more than a sourcing
sourcing framework and utilizes intelligent technology, actionable data, and robust processes to meet business objectives. It also considers non-pricing levers, such as adherence to contract terms,
purchase order compliance, effective demand management, and supplier performance management, to prevent leakage.
How Does Spend Under Management Work?
Implementing Spend Under Management (SUM) using a proven framework, dedicated resources, and tailored processes can enable a smarter and more effective approach to spend management.
This approach is crucial for analyzing the value of every dollar spent and ensuring that they align with the business's strategic goals, whether it's a large corporation or SME.
How Should I Start with Spend Under Management?
SUM is based on a partnership between indirect procurement and operations, and follows five key operating principles across sourcing, contracting, buying, and spend decision-making.
To achieve and improve spend goals, businesses can create an actionable plan by identifying key influencers. While the concepts are straightforward, the challenge lies in implementing them.
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