If you ask any executive in any industry about a concern that lives in their mind on a daily basis, it’s expense management. There’s always going to be a desire–or need–to cut costs, limit spending, and get smarter about where you’re allocating funds.
However, procurement can’t simply slash budgets and kill supplier contracts at random. It is essential to be strategic about where and how procurement manages expenses in order to avoid significant friction with internal and external stakeholders and reduce the risk of disruption. Putting that plan together is rarely an easy task.
In a special series of podcast episodes, AOP Founder Phillip Ideson takes you through the keys to running a successful expense management program, pitfalls to look out for, and tactics to cover incumbent supplier management, strategic sourcing, and demand and category management.
Explore the series below so you can leverage his proven tactics for putting together a sustainable expense management program.
“The most successful expense management programs are managed on a programmatic basis–meaning those who have a governance structure to ensure projects remain on track…[and those who have a plan to] show how you’re going to deliver and what the roadmap is.”
If you're going to deliver real savings for your organization, you need to first make sure that the expense management program you're running is aligned with business objectives and follows the right format.
In this episode, Phillip goes over the steps you should follow to get your expense management program off the ground in a way that amplifies your impact across the organization.
“When you think of one of the primary areas of friction between procurement and finance it’s that the CFO doesn’t see the forecasted savings from procurement hit the bottom line.”
No matter your organization's reason for trying to cut costs and manage expenses, there are certain pitfalls that many procurement teams fall into that hinder their success.
In this episode, you’ll hear Phillip review some of the most common mistakes procurement makes within their expense management programs, the reasons they get caught in those traps, and what you can do to avoid them in your own operation.
“[When looking at] the required agreement of how benefits will be shared, this has to be equitable for both sides because there’s going to be work on both sides.”
While certain items within an expense management plan are a bit easier to address, such as technology solutions, the same can't be said for existing suppliers.
In this episode, Phillip gives you numerous tactics you can employ to maintain expense management efforts when dealing with incumbent suppliers and strategic sourcing processes.
“By performing a bottoms-up review of external spend you can categorize each supplier and product/service as mission critical, nice to have, or a luxury. What are the areas that are fundamental to our competitive advantage that the risk/reward payoff isn’t worth opening a hornets nest?”
After you've done what you can to manage expenses related to incumbent suppliers via strategic sourcing, there are still plenty of things you can do to ensure those savings last long term.
In this episode, Phillip compounds on tactics shared in a previous episode to give you ways you can achieve sustainable savings through demand management and at the category level.
“It is possible to build an expense management program that delivers outsized returns that are in line with the exact needs of your business. That said, to do so requires care and consideration–and a very targeted approach. “
From leveraging a GPO model to auditing supplier invoices, there are a number of paths you can take to ensure your expense management program delivers the results that you and your executives want to see.
In this episode, Phillip closes out the series by giving you seven tactics you can employ to increase cost-savings, ensure expense accuracy, and strengthen stakeholder and supplier relationships.
