Support Paper: The Business Case for Change

A BSM platform will drive down costs 

• The visibility that a BSM platform provides means that controlling costs becomes a much easier task.
• A systemised BSM platform will provide the intelligence that enables users to quickly and easily identify where costs can be reduced.
• Improved capabilities for conducting sourcing events such as analytics of supplier bids and efficient feedback loops, enable more effective negotiation tactics resulting in significant savings rates.
• The transparency of the system removes ambiguity making your route to cost savings quicker and more achievable, because negotiations are facilitated through intelligent data.
• Furthermore, electronic invoicing maximises automation and reduces costly manual effort.

A BSM platform should improve supply chain value

• Poor supplier management can lead to a reduction on the lifetime value of a deal.  
• An effective BSM platform will facilitate users to manage suppliers in a consistent way and lead to better contract management, all of which will drive savings and value.  
• In a busy Procurement function, it’s not inconceivable that contract expirations may be missed resulting in less than favourable terms for the organisation. A BSM platform removes user error, shining a spotlight on this area of the business.

A BSM platform will improve productivity and efficiency 

• Once set up correctly, a BSM platform will significantly improve the productivity of the Procurement function.  
• Onboarding suppliers becomes an easier task and day to day manual procurement work, such as RFI’s, PQQ’s, and compliance questionnaires, becomes automated providing procurement teams with the time to work strategically.  
• Improved reporting facilitates planning and execution of sourcing events, reducing time spent by the procurement function. And increased self-serve processes reduces time spent on tactical aspects of managing contracts. 
• In addition to a step change in the capacity of the function, the efficiency of the system will lead to contented suppliers, quicker fulfilment and will heighten how an organisation is perceived by suppliers. Particularly in sectors which may be less attractive to tier one suppliers, this reputational improvement, brought about through ease of process, could lead to greater engagement from suppliers and enhanced negotiation power. 

Visibility of Spend 

A common platform makes spend completely visible for Finance. It enables Finance to be actively involved in the decision-making process, acting as a control point to determine permissible spend against agreed budget. In essence, a BSM platform provides Finance with an extremely strict and powerful budget management measure. 

An effective BSM platform will allow payments to be made quicker and more accurately creating a seamless payment cycle and the knock-on benefits, such as improved cash flow. This allows the Finance Director increased confidence levels that the organisation has sufficient cash in working capital because the payment cycles are predictable and accurate.

A digital transformation that utilises a common platform has significant benefits from a governance and risk perspective. Suppliers can be classified, tracked against performance targets and measured all under one single platform. Management of supplier information becomes easier through automated checks that prevent duplicate supplier data and manual processes such as documentation receipt can be actioned within the platform too, removing user error.

Supplier risk related tasks such as assessment questionnaire development, scoring models, risk reporting and risk analysis can all be automated within a BSM platform reducing the cost to manage supplier risk as well as providing a uniformed approach. 

From a spend compliance perspective, BSM software comes into its own. The system will force users to procure from approved suppliers within the system. And these approvals can be set based on multiple factors. So, for example, if ESG is important to your organisation, many systems will allow you to select suppliers based on their organisation’s carbon status and cross reference that with their turnover, if working with SMEs is important to you too. Essentially the system forces compliance from the user ensuring that the Compliance community can be worry-free. 

From a reporting perspective too, a BSM platform will enable those responsible for compliance to evidence adherence to process.

All departments in an organisation need to procure, whether it’s stationery for the operations department or support services for the marketing department. Each of those departments will have an individual responsible for their budget and a BSM platform can positively impact those individuals too. Whilst Functional Budget Holders will be required to work in a more systemised way, the procurement process in itself will be quicker, engagement with the procurement team should be easier, leading to faster route to market. And the budget holders themselves will be empowered to make the right buying decision.

In summary, a BSM platform offers organisations the opportunity to manage spend, reduce cost, improve compliance, enhance relations with stakeholders and empower Procurement teams to step into work that is less manual and more rewarding. It’s a win-win for all.