Make Better Financial Decisions with Help from Digital Spend Management

2020 was a difficult year. But companies with 1,000 employees or fewer have been hit especially hard. To see how this segment is faring and how digital spend management can ease the road ahead, SAP commissioned Aberdeen Research to conduct a survey of roughly 600 finance, IT, and procurement specialists from companies from around the globe.

The survey found that 3% of these companies will most likely close their doors in 2021, while 29% will still be operating in survival mode. Roughly 37% are planning for continued recovery, with 23% hoping to see an increase in revenue. Just 7% are making plans for growth.

Based on survey responses, Aberdeen classified these companies into three groups: Best in class, average, and laggard. It also applied its unique methodology to determine the pressures influencing change, the actions taken to make those changes, the capabilities required, and the technology needed to make it happen.

By determining how best-in-class companies are using digital spend management to improve business outcomes today and insight and planning going forward, we hope to shed some light on how you can do the same. In other words, by increasing visibility into spend data, we want to show how companies like yours can improve planning, optimize cash flow, maximize spend impact, and minimize risk.

Across all survey respondents, the top priorities for 2021 are:

• Controlling costs
• Improving spend data accuracy and spend tracking
• Implementing automated solutions
• Simplifying management of regulations and compliance
• Achieving a unified view of spend enterprise-wide

But an inability to quickly capture spend data and incorporate it into financial decision-making makes realizing these goals a challenge. So does poor quality data and a lack of standardized spend management processes.

It is not surprising, therefore, that the vast majority of best-in-class companies (nearly 75%) reported already having digital spend management technology, including automated expense and vendor invoice capture and management. The result is that top performers report having their spend data on hand when they need it 80% of the time.

Employees at these best-in-class companies also report higher satisfaction with spend management capabilities. In fact, they are 61% more likely to be very satisfied with their ability to access spend data; are 22% more likely to be very satisfied with their expense data, visibility, management, and reporting tools; and are 39% more likely to be very satisfied with their vendor invoice data and management tools.

All of this leads to increased productivity and faster, more-informed decision-making.

Beyond employee satisfaction, best-in-class companies are using digital spend management to better manage budgets and cash flow. This includes using spend data to audit for budget compliance, enrich forecasting, prioritize category sourcing, and forecast cash flow for the future.

The bottom line: Over the past two years, when compared with their peers, best-in-class companies have reported:

• 26.1% improvement in profitability, compared to -1.7%
• 24.3% improvement in productivity, compared to -2.4%
• 20.4% improvement in operating margins, compared to -0.3%
• 17.1% faster cash-to-cash cycle, compared to -0.7%

With the COVID-19 pandemic putting the move toward remote work into high-gear, digital, cloud-based workflow and data management have been a top priority across lines of business. And now, as we move closer to being able to travel again, it is important to remember that the need for digitally enabled travel and expense management will become a must-have.

SAP Concur solutions help you capture, manage, and control company spending right where it happens – whether that is buying equipment for a home office, monitoring and maximizing vendor-related spending, or making travel easier. Not only do your people have the tools they need to stay productive from anywhere, finance teams have the real-time spend data and advanced spend analytics they need to help ensure your company is getting the most out of every dollar. Plus, by integrating SAP Concur solutions with your ERP or finance systems, finance leaders gain the deep insight into spending trends they need to better ensure spend strategy that delivers maximum impact with minimum risk.

Aberdeen’s worldwide and US research findings show how digital, integrated spend management is helping best-in-class companies make better financial decisions that lead to better business outcomes. To find out more and learn how SAP Concur solutions can do the same for you, join us for our upcoming Webcast Strategic Spend Insights: Best Practices for Improving Financial Decision-Making with Data on Thursday, February 18.