What is Spend Management and Its Best Practices?

What is spend management?

Spend management is the tried and true practice of comprehensively managing all supplier relationships and company purchasing to identify every dollar spent and get the most out of it. Spend management best practices integrate and automate all spend-related activities from source to settle so that buying happens as planned and suppliers get paid in compliance with contracts.

By taking a big-picture view of spending, more addressable spend can be brought under management, driving more organizational value. The value is derived from:

Greater efficiency – from automating manual, error-prone processes
Lower supply costs and risks – by knowing exactly what is being bought, from whom, and for how much
More effective collaboration – between trading partners and cross-functional teams
Improved productivity – by freeing time and resources to focus on more strategic activities

Get more spend under management and the most out of every dollar spent by integrating and automating all spend activities from source to pay.

Coworkers in a conference room discussing spend management options with SAP Ariba

Processes digitized and consolidated

Spend management begins with the digitalization of sourcing, contracting, and purchasing processes, along with processes for managing suppliers, invoices, and payments. These functions are then consolidated into one simple, intelligent process carried out on a single, cloud-based platform integrated with a digital business network. This makes it possible to gather and analyze all spend data, gaining insight into company spending across the entire organization

Turn insights into action

Using spend management software, you can turn insights into action in an interconnected, end-to-end process:

Sourcing is performed from a stronger negotiating position to receive better pricing from suppliers

Contracts are written in real time, then stored in a centralized repository to facilitate visibility and compliance

Purchasing is controlled by guiding employees to buy from preferred suppliers at negotiated prices

Supplier lifecycle and performance are managed with a 360-degree view of reliable, up-to-date data

Multitier supplier visibility mitigates supplier risk and potential threats to operations, image, and revenue

Invoice capture, workflow, and approval are automated to eliminate exceptions and ensure compliance with contracts and purchase orders

Collaborating with suppliers, payments are managed to increase free cash flow, improve working capital, and capture early-payment discounts

This is Spend Management™

SAP Ariba Spend Management Solutions

Solutions Overview

SAP Ariba’s extensive portfolio of solutions includes supplier management, strategic sourcing, procurement, and more.

Learn more

Ariba Network

World's largest business network – a dynamic, digital marketplace where companies connect to get business done.

Learn more

SAP Ariba Snap

Control spending with an easy-to-deploy, easy-to-administer, and easy-to-adopt buying system for mid-sized and growing companies.

Learn more

Spend Management