Spend Management overview

Managing sourcing savings from idea to bottom line

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Turn savings ideas in cash

Savings is the key KPI for any sourcing function. However, more than half of the savings created by procurement never realizes at the bottom line or at least this is the perception that finance and other stakeholders have.

Sievo’s Spend Management solution helps corporations to translate source data into savings opportunities and convert these opportunities into savings projects. The analytical engine is combined with a strong project execution platform ensuring effective savings realization. All spend and project information can be used to budget and forecast prices, volumes, spend, and profitability. Finally, Sievo’s Spend Management solution ensures that savings hit the bottom line. In short term, our customers capture concrete savings at all stages of the savings life cycle:

Sievo procurement contribution to finance method

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Spend Management: managing data to improve bottom line

Professional spend management requires transparency. Sievo’s Spend Management solution provides an integrated solution to capture and structure data points from a variety of sources to create competitive advantage:

  • Source-to-screen approach to create transparency on spend data based on data in your source systems
  • Supplier web upload to collect data from your key suppliers, typically to create transparency on transport and indirect categories
  • Scenario tools to identify opportunities and manage risks
  • Highly intuitive user interface to capture all savings projects
  • Integration to various market price sources to compare internal price development with market realities
  • Budgeting and forecasting tools featuring distributed data collection to create prices, volume and spend forecasts
  • Inbuilt calculation technologies that isolate drivers of spend
  • Contract repository and capacity to link spend data with contracts for compliance management

Sourcing and Finance

Designed to serve the needs of sourcing function and fulfill the strict requirements of financial correctness.

Connected

Sievo provides a plug-and-play connection to your source systems, incorporates market data sources and enables effective data collection from suppliers.

spend management plug & play

Guaranteed data quality

Sievo guarantees that your performance numbers are always correct or you get your money back.

sievo guaranteed data quality

Visual

Sievo’s visual user interface provides immediate overview and at the same enables drilling-down to lowest details.

sievo interface

Cloud

Sievo’s cloud solution can be taken into use without hassle, all you need is a web browser.

Sievo SaaS the cloud

Integrated

All modules are designed to manage savings from idea to bottom line.

the Sievo linked solution areas

Best practices for measuring sourcing savings

Sievo’s Spend Management solution is designed to manage savings from PowerPoint to bottom line. The key to creating savings to the bottom line requires succeeding in following steps around sourcing savings:

  1. Define savings: the first step to delivering savings is to define how sourcing savings should be measured.
  2. Integrate savings measurement and spend analysis: way too often procurement has created Spend analysis, and also has a savings tracking solution in place (perhaps in Excel), but these two solutions are completely isolated. This leads to the fact that all savings that procurement claims are questioned, as nobody can establish the link between savings and spend. Savings need to be measured in a tightly financially integrated way.
  3. Manage forward: Spend Analysis is crucial for succeeding as a procurement organization. So is Financial Measurement. However, both of these approaches are fundamentally backward looking. A successful procurement organization needs to actively manage savings project portfolio, very much in a same way as professional sales functions manage their opportunity portfolio.
  4. Integrated to budgets: the true acid test of your claimed savings is if they are considered when budgets are set, and especially so for indirect categories. The challenge here is that savings are often defined from category perspective, whereas budgets are created by general ledger accounts and cost centers. This often also serves as an excuse to not take procurement savings for real. One of key components of making sure that the full potential of procurement contribution is exploited is to integrate savings with budgets.
  5. Work with data that you have: not all of your data is perfect, actually quite the opposite is true. This must not prevent from taking action on procurement performance management now and here. As the savings measurement approach is designed, it must recognize the realities of existing data, and create best possible measurement under current conditions. Waiting for the perfect data to emerge will be a long wait.
  6. Universal rules, category specific applications: same universal savings rules must apply across categories and regions. However, the practical application of these rules must be quite category specific. Each of categories has quite unique value creation logic, and so must measurement also be. The year-on-year price comparison that applies for direct materials is quite different from how to measure savings in indirect categories.
  7. Think big, act small, move fast: transformation into a world-class procurement performance management will not happen overnight. You need to think big, and aim for platform that helps you to not only capture low-hanging fruits of spend visibility. At the same time, you need to create results within weeks, not months or years.

We help our clients to build world class procurement performance organization by:

  • Providing competence on procurement performance management, helping you to jump-start your spend management,
  • Providing solution that solves the complexities in performance management – out-of-box,
  • Tackling the real-life, hands-on dirty data management issues on your behalf,
  • Providing a continuous process for managing your procurement performance – think it as of spend management as a service.

Contact us, and we will help you to create a business case around spend management – with no strings attached.

Four steps for Spend Management:

Spend Analysis

Turn your heterogeneous source data into categorized spend data and tangible opportunities

Savings Program Management

Translate Spend Analysis into savings opportunities, execute savings projects and track savings contribution

Spend Budgeting & Forecasting

Leverage spend data for creating a forward looking view on price, spend, volumes and profitability

Procurement Controlling

Get full transparency on savings and drivers of spend, as well as on contract compliance