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In my last blog, I wrote about what exemplifies the necessity of the intelligent spend management – the “why”. Today, I will write about the priorities. After all, if everything is important then nothing is important. So, the key is to “prioritize”.

Business leaders are looking for opportunities to continuously improve in today’s increasingly complex world. Leaders must manage strategic priorities in a manner that strikes a balance between spending on growth and controlling spend as they respond to the demands of a fast-moving digital and global economy.

We believe following are the commonly attributed strategic priorities in sourcing & procurement – the “what”.

Cash Is King

  • Greater emphasis on cash flow requirements

  • Develop suitable response under various stress test scenarios

  • Convert fixed to variable cost, where possible

  • Intelligent auditing of payables and receivable transactions

  • Optimize total cost of ownership

"20% lower Annual Service and Maintenance Cost (% of rev) for organizations where cost and financial analysis is regularly conducted to track expenses associated with an asset, and analyze variances" – SAP performance benchmarks

Collaboration & Automation

  • Planning collaboration to improve visibility into availability of supply

  • Need for real-time collaboration with internal and external supply chains

  • Minimization of labor-intensive invoice error and exception handling processes

"27% lower BI Report Failure for organizations where periodic database automation is in place, where daily maintenance tasks for databases require no human interaction" – SAP performance benchmarks

Sustainability & Purpose

  • Purpose-driven brands perceived as having greater value, customers more loyal and employees more engaged

  • Institutional investors increasingly taking sustainability and purpose into account in their investment decisions

  • Goals to use sustainable and diverse suppliers

"82% lower Number of Fatalities / 100 M Exposure Hours for organizations where the EH&S system centrally tracks information, including suppliers’ dangerous goods and hazardous materials management " – SAP performance benchmarks

Cyber Security

  • Virtual procurement aided by digital tools brings in threat to information security

  • Audit supplier cyber security capability to evaluate the degree of risk

  • Collaborate with IT to ensure information security, data protection and privacy

“Roughly 4 in 10 procurement execs experience digital security breaches with contingent workers and services providers “sometimes, frequently or nearly every engagement” -  Agile Procurement Insights Research by SAP in collaboration with Oxford Economics

Future-ready operating model

  • Proliferation of digital tools e.g. digital signature to lower sourcing cycle time

  • Application of agile techniques e.g. staffing cross-functional “scrum” teams for enhancing value in a specific spend category

  • Changing profile of procurement teams e.g. data engineers & data scientists a commonplace

Only 58% of workforce spend is on employees. The other 42% is on external labour” -  Agile Procurement Insights Research by SAP in collaboration with Oxford Economics

Which procurement strategies will you utilize the most to deliver value over the next 12 months?


If you are interested, you can read the entire source to pay value paper at one go here.

You may also wish to learn how our vision to value methodology links your vision for the future and SAP technology innovations to tangible business outcomes.