AribaSpendManagementManageandLeverageEnterprise-WideSpendforSignificantBottomLineResultsUseCase:FromConcepttoRealityTableofContentsIntroduction............................................................................3EnterpriseSpendManagementisStrategic............................4TheEnterpriseSpendManagementLifecycle.........................5EnterpriseSpendManagementChallenges............................6AribaSpendManagementLeadstheWay..............................6BenefitsofEffectiveSpendManagement................................8UseCase:FromConcepttoReality......................................10UseCase:AribaSpendManagementResults.......................19TransformingtheSpendLifecycle.........................................20AribaSolutionsDelivery.......................................................22AribaSpendManagementSynergy.......................................23Summary:TheCostofNotActing........................................23AboutAriba..........................................................................243IntroductionThoughbusinessescan’tcontroltheeconomiccircumstancesinwhichtheyoperate,theycancontrolthemoneytheyspend.Onehundredpercentofthemoneycompaniessavegoesdirectlytothebottomline.Effectivemanagementofspend—whatisspentandwithwhom—enablescompaniestoensurethatexpensesfallfasterthanrevenueinaweakeconomyandincreasemoreslowlythanrevenueinastrongeconomy.ThisisEnterpriseSpendManagement(ESM).Mostcompaniestodayunderstandtheneedtofullymanagetheirspend,butfacesignificantchallengesintryingtoimplementanEnterpriseSpendManagementstrategy.Thesechallengesfallintothreekeyareas:•People—Procurementmanagerslackthetoolstoengageallstakeholderstodefinespendrequirements,understanddemand,identifyareasofleverage,andensureusageofwell-negotiatedcontracts.•Process—Manualorpoorlyautomatedspendmanagementprocessesmakeitdifficultorimpossibleforsourcingandprocurementprofessionalstostreamlinethepurchasingcycleandleveragespend.•Information—Spendinformationisbadlyclassifiedandfragmentedacrossmultiplesystems,impedingthestrategicanalysisessentialtodrivespendsavings.Moreover,theabsenceofauniformwayforcompaniestocommunicatewithalltheirsuppliersreducesproductivity.Toovercomethesechallenges,leadingcompaniesaredemandingasolutionthatputsspendatthecenterandautomatestheentirespendmanagementprocess—fromanalysisandsourcingtocontractsandprocurementthroughtoinvoicingandsettlement.Andthat’sexactlywhatESMprovides.Byenablingbusinessestoautomateeverystepofthespendmanagementprocessinaclosed-loopsystem,ESMprovidestheenterprise-widevisibilityandoperationalcontrolrequiredtofullymanageandleveragespend.Asaresult,financial,sourcing,andprocurementprofessionalscandeliversignificantspendreductionsthatimmediatelyimprovethebottomline.AREYOUMANAGINGYOURSPEND?•Howmuchofyourspendisactivelymanagedbyyourpurchasingdepartment?•Whatpercentageofyourpurchasesismadeincompliancewithexistingcontracts?•Doyoufullycapturesupplierrebatesandvolumeincentives?•Doyouhaveanenterprise-widesystemtomanageandenhancespendsavingsonanongoingbasis?4EnterpriseSpendManagementisStrategicThespreadsheetbelowillustrateshowaGlobal2000companywith$10billioninrevenueandanoperatingmarginof15percentcanutilizeESMtoimproveitsoperatingincomeby14percent—justbyaimingtosecurea3percentreductioninoverallspend.ToachievetheseresultswithoutESM,the...
