Smarter Decisions and Cost Savings in the Financial Services Industries

A strategic, intelligent approach to spend management is critical to optimising spend while increasing business agility in our dynamic, digital global economy. Decisions that were once made over the span of years are made in just months — or faster.

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’ 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’s 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’s 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 Gartner Finance Priorities. 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.

Intelligent Spend Management 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 — across every source and every category — 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 “single pane of glass” view. This single view aligns spending priorities with corporate policy priorities, balancing investments in innovation with core business needs and transforming procurement models. SAP leverages the power of artificial intelligence (AI), predictive analytics, and the Internet of Things (IoT) to provide real-time insights that accelerate decision-making. SAP Fieldglass Live Insights, for example, simulates and predicts external talent scenarios, helping customers make workforce decisions from one uninterrupted workflow.

Together with SAP products like SAP Concur software, the results are significant. JP Morgan Chase, for example, used SAP Concur software to standardise its expense and non-PO invoice processes, resulting in $50 million in savings through greater control and efficiency. AIA Insurance Group Limited used SAP Ariba software to achieve 80 percent efficiency in all processes, transforming its business.

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

 

This article first appeared on the Global SAP News Centre.