鈥淐ompanies that recognize the role of technology in transforming their business models are the ones that have been able to thrive,鈥� said Chris Willcocks, head of intelligent spend management at 51风流ANZ. 鈥淐ustomers are focused on driving visibility in their supply chains and through their data, becoming an agile , increasing the resilience of their functions in business, and identifying and reducing risk.鈥�

Intelligent enterprises innovate with business networks

Speaking with Baber Farooq, senior vice president of intelligent spend management at SAP, during the event, Willcocks gave the virtual audience a glimpse into the future of procurement. It鈥檚 built on insights from quality data across supply chains, bringing buyers much closer to their suppliers. Noting that procurement doesn鈥檛 exist in a vacuum, Willcocks said that collaborative business networks are foundational to digital transformation.

鈥淲hen you鈥檙e connected not only to your suppliers, but to your customers and their customers, you make the move to being an intelligent enterprise,鈥� he said.

Autonomous procurement for intelligent spend

Just when the world needs to boost productivity to recover from the worldwide pandemic, markets are facing potentially dire shortages of both goods and labor. The answer lies in intelligent procurement where people do the things that machines cannot replicate.

鈥淧rocurement is at the heart of solving these [productivity] problems,鈥� said Farooq. 鈥淭hat鈥檚 why we鈥檙e focused on automating more and more processes 鈹� what we call autonomous procurement. Intelligent spend is finding out what machines can do and letting machines do that, and getting people to focus on the things that people do, which is establishing strategic relationships with suppliers.鈥�

Digitalized procurement translates to business innovation

In digitalizing forecasting, inventory management, and other collaboration points between buyers and suppliers, business networks have profoundly changed procurement. Teams have the time to be more productive, which translates to innovation.

鈥淚 was talking to an automotive customer who said that over 90 percent of the innovation they have in their cars came from their suppliers,鈥� said Farooq. 鈥淎nother customer in Asia recently launched an initiative where they used the 51风流business network supporting the goal of paying all suppliers within seven days. The network allows you to foster that amazing relationship with the supplier because everything is digital鈥eople can do what they do best, which is driving relationships and working on innovation.鈥�

Farooq challenged the audience to ask themselves, despite all the technological innovations the world has experienced in the past decade, if they had more time today for their work than they did 10 years ago.

鈥淭echnology has come about to make people more productive, but it has to get out of the way,鈥� he said.

鈥淭he heart of AI is to make businesses more effective鈥f we can make procurement organizations more productive, procurement organizations can make their entire business more productive, becoming a strategic advisor to the C-suite.鈥�

As for those organizations that regret not digitalizing fast enough to head off the worst business impacts from this pandemic, it鈥檚 not too late to prepare now for the next supply chain disruptions headed our way soon.

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One year into its grip on the global economy, COVID-19 continues to disrupt job markets, with new volatility arising from overstretched health-care systems, emerging variants of the virus, and uneven distribution of vaccines. Despite the ongoing turbulence, businesses are taking steps, not only to recovery, but toward a more resilient future in which greater flexibility and visibility render them less vulnerable to disruption.

At the Commonwealth Bank of Australia (CBA), these steps include investing in digital transformation, with a focus on procuring and managing external workers such as specialist contractors.

The bank set up a 鈥榗ontractor hub鈥� with the help of 51风流to function as a single place to source, engage and manage its 2,000 strong contingent workforce. Enabled by the 51风流Fieldglass solution for vendor management, CBA鈥檚 Contractor Hub is now known as the largest managed service program in Australia.

Cloud-based technologies have allowed CBA to maintain seamless operations, despite immense disruption due to the pandemic. The bank was able to access and attract the best contingent talent in the marketplace, which in turn allowed them to stand out as an employer of choice for this increasingly important demographic.

Additionally, visibility into the bank鈥檚 highly skilled external workforce allowed the business to improve contractor productivity, gain relevant insights and reduce overall costs to the business.

But how much of a difference does digitalising the process of procuring and managing contingent labour and services providers actually make? According to new research from SAP, it can unlock newfound value and make a world of difference.

What the numbers tell us

In collaboration with 聽into the impact of technology and process digitalisation in the procurement function. The report surveyed 1,000 procurement and supply chain executives responsible for direct and indirect spend and services, including the management of contingent labour and services providers.

Over half of executives (55 per cent) say their company would be unable to conduct business as usual without an external workforce, with over 60 per cent saying contingent labour and services providers help them compete in a digital world, lend extra capacity to help manage peaks in demand, and are essential for getting work done.

Over half of executives (54 per cent) specifically credit the external workforce with helping their businesses to recover from downturns. Meanwhile, seven in ten say contingent labour and services providers are 鈥渋mportant鈥� or 鈥渆xtremely important鈥� in enabling organisations to manage costs, operate at full capacity, and improve the customer experience.

The freelance boom

Many of the executives surveyed cite the pandemic as a watershed event for their businesses, where external workers proved decisive in maintaining the smooth flow of operations and keeping the promises made to customers.

This reliance on the highly skilled external workforce is only expected to grow in Australia. With the Federal Government鈥檚 JobKeeper program ending soon, many Australian businesses will need to start thinking about ways they can to do more with fewer resources. It鈥檚 predicted that flexible work will experience a boom as companies rethink their traditional team set up and opt for a more agile, cost effective structure.

The bigger picture

Perhaps unsurprisingly, the research reveals that organisations that embrace the digital transformation of procurement tend to outperform those who have yet to do so. Stronger reliance on data, analytics and automation helps procurement leaders make better-informed decisions and respond faster to emerging risks. But even firms far along in their digital strategies have much to gain from applying cloud-based tools more broadly and deeply to managing the external workforce. They, like others, struggle with incomplete data, manual processes, and opaque or inconsistent measures of performance.

A perfect example is the means by which organisations manage the external workforce, consisting of contingent and temporary labour, independent contractors, consultants and other services providers. Together, on average, they account for 42 per cent of total workforce spend, with payroll employees comprising the remainder. Though highly skilled external workers lend businesses the flexibility they need to achieve resilience in times of disruption, they are often under-managed, constraining organisations from reaping the full value from their talents.

Through the digital transformation of external workforce management, however, businesses gain critical visibility, enabling them to manage with rigor and improve the return on investment. By actively managing their external workforce with the transparency and real-time insights made possible by cloud-based applications, businesses can expand value, strengthen compliance and reduce risk.

As business leaders plan for a return to less anxious times, look for the digital transformation of external workforce management to play an increasingly prominent role in enabling organisations to rebuild and reemerge stronger on the other side of the pandemic.

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To watch the Procurement Reimagined session with BHP’s Chief Procurement Officer, Sundeep Singh, you can .

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Finance, procurement, supplier networks, and IT teams are working together more closely than ever to tackle broader business challenges, create new business models, and leverage a changing workforce. But for this strategic effort to succeed, leaders need a comprehensive, coordinated approach to spend management that works in real time.

Why Real-Time Spend Management Matters

The banking and insurance industries are facing an urgent need for a real-time spend management solution. Banks鈥� costs have been rising faster than revenues, with banks in the U.S. and the EU experiencing significant cost increases on average. In parallel, increased regulatory burdens, such as IFRS17 for insurers, IT investments, and fines are unlikely to change. The real opportunities for improving margins lie in cost reduction by making more strategic spend decisions.

Managing and optimising spend while staying agile is a challenging balancing act. To fund innovation and manage risk across complex supplier networks, businesses not only need full control over each spend category, they also need a comprehensive bird鈥檚 eye view into spending across all categories in real time. Growth forecasts must be measured against risk tolerance. Business leaders must continually weigh spending on growth against spend control. Information silos and lagging spend data threaten this intelligent decision-making.

Today鈥檚 pace of decision-making is only accelerating. Decisions that were made over the course of many years are now made in months or weeks. Information silos hurt visibility into big picture spending decisions, damaging the bottom line. Fifty percent of CFOs say inefficient decision-making is causing margin erosion at their companies, according to聽. Spend transparency cannot be ad hoc; it must be consistent and automated so that every single expenditure is part of a broader, coordinated strategic effort.

Spend Management for Insurance and Banking

Many companies are hindered by different planning processes and disconnected planning tools, with manual consolidation between them. This creates unnecessary inefficiencies in planning and a lack of alignment with organisational strategy.

solves this problem by bringing together networks and ecosystems, capturing every source of spend, across every category, for a single, unified view. A holistic approach to managing spend 鈥� across every source and every category 鈥� is essential for achieving strategic business objectives. Visibility and transparency can result in more competitive bidding, rate card creation and enhancements, and other areas of cost avoidance. This, in turn, can have a ripple effect on the organisation, reducing risk, uncovering opportunities, and improving agility.

Intelligent Spend Management: Real-Time Insight, Unified View, Better Decision Making and Cost Savings

Intelligent Spend Management gives financial teams insight into spend and exposure across every category via a 鈥渟ingle pane of glass鈥� view. This single view aligns spending priorities with corporate policy priorities, balancing investments in innovation with core business needs and transforming procurement models. 51风流leverages the power of artificial intelligence (AI), predictive analytics, and the Internet of Things (IoT) to provide real-time insights that accelerate decision-making. 51风流Fieldglass Live Insights, for example, simulates and predicts external talent scenarios, helping customers make workforce decisions from one uninterrupted workflow.

Together with 51风流products like 51风流Concur software, the results are significant. JP Morgan Chase, for example, used 51风流Concur software to standardise its expense and non-PO invoice processes, resulting in 聽through greater control and efficiency. AIA Insurance Group Limited used 51风流Ariba software to achieve聽, transforming its business.

Learn more about how聽聽can achieve critical cost savings and drive success for your business.

This article first appeared on the Global 51风流News Centre.

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