Countering common arguments against Spend Management

When you are advocating for a Spend Management solution in your organisation, it’s almost guaranteed that you will encounter some pushback. We’ve prepared some counterarguments to have up your sleeve if needed

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Making the Case for Spend Management

Spend Management is too expensive

It can be difficult for executive teams to see beyond the upfront cost of investing in a new solution, especially when budgets are tight. 

It’s important to highlight that a Spend Management solution will help the business streamline and reduce risk from its source-to-pay processes, but it can also result in a net saving. Be prepared to quickly summarize the benefits of Spend Management that deliver savings to the business, referring to the points made in your business case and third-party research where helpful.

As with any product or service, Spend Management solutions come at different price points. Some can be much more affordable than others in terms of both upfront and ongoing costs. Your executive team may have heard of costly solutions before, but some options cater to more modest budgets without sacrificing the functionality needed to transform and modernize spend management.

Why not just use our ERP procurement module?

Some may think that managing spend management through your ERP is a more efficient approach. It’s important to acknowledge that it’s a reasonable suggestion, especially if some within your institution rely on the ERP. But while it can seem like a more affordable option with less hassle, most of the time, it simply isn’t. 

ERPs are robust and often complex platforms created to accommodate complicated finance requirements, making them challenging to learn and navigate. Conversely, many Spend Management solutions are built specifically to simplify the procurement process, leading to broad user adoption, which is critical to realizing visibility, control, savings and other business benefits.

If your ERP is hosted on-premise, then your IT department will be responsible for updates and the maintenance of a procurement module, adding expense and greater demand for limited resources. A cloud-based Spend Management solution avoids this need and provides greater functionality and usability while integrating closely with your ERP, ensuring it remains the financial system of record.

Is Spend Management worth it?

If you’ve effectively outlined the benefits of a Spend Management solution, your audience is unlikely to respond with this argument unless they just skimmed over your business case.

Even if you have demonstrated the value of a Spend Management solution in your business case, it’s still helpful to be able to articulate a high-level summary of your points when required. Remember that Spend Management solutions are purpose-built for spend management. They can free up direct and indirect resources for reallocation to more strategic efforts. They can also help your institution minimize risk, increase on-contract spending and thus, increase overall savings. 

Ask the person making this argument if there is an unaddressed value they were hoping to find with Spend Management. This is a good chance to take notes for some additional product research. If not, direct them to your business case for more detail. 

There isn’t enough time or resources for Spend Management 

When institutions face lean staffing levels and dwindling budgets, it’s common for senior leadership to go into survival mode. At this point, they are resistant to change because they are so focused on simply getting through a challenging period. 

In this case, it’s important to point out that the short-term implementation of a Spend Management solution will reap ongoing and long-term benefits that will ultimately free up time and resources. 

Your choice of Spend Management solution provider is also critical. Identify the right partner and they will work with you to create a seamless implementation and deployment plan that reduces the resources needed from your institution and minimizes disruption. 

Won’t Spend Management eliminate purchasing-related jobs? 

Your internal purchasing and accounts payable teams may have this concern and, as a result, may be resistant to the idea of Spend Management. However, a Spend Management solution instead allows these roles to focus on more strategic and rewarding activities that add greater value to the institution. 

For example: 

• Purchasing staff will be able to advance from manually entering purchase orders or carrying out compliance checks to getting the best value on big-ticket items, undertaking requests for quotes, and strategic supplier management. 
• Accounts payable staff can move from a manual data entry process for every invoice to only handling exceptions. They are then free to optimize payment cycles and better manage supplier data, including reviewing changes. 

Download the eBook to learn more about making the case for Spend Management

A step-by-step, practical guide to creating a compelling and data-driven business case for a Spend Management solution. 

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