Ivalua: Is the future of spend management holistic?

In today’s high-performing procurement organisations, leading executives are consistently prioritising a holistic and integrated approach to supplier management. 

According to Ivalua, these organisations are going beyond supplier management, instead, they are adopting a supplier engagement approach. In doing so, organisations align their suppliers to the overall procurement and broader business strategy to create and sustain long-term value.

“Successful industry leaders have built strong supplier engagement foundations to power more effective and valuable procurement practices. In doing so, they have improved supplier collaboration and created a greater capacity for resilience, innovation, and continuous improvement,” said Vishal Patel, Vice President of Product Marketing at Ivalua.

What makes holistic supplier management important?

Providing value beyond sourcing and procure-to-pay (P2P) savings, holistic supplier management can help organisations to transform supplier risk and inefficiencies into a source of innovation, competitive advantage and efficiency. 

Often, inefficiencies are created in sourcing or Procure-to-Pay from inaccurate supplier information, payment delays, inconsistent supplier master data across systems, out-of-date credentials, and disconnected supplier risk information. By adopting a 360-degree view of all supplier interactions and activities, the procurement function can benefit from greater transparency and real-time information.

How does a strategic and holistic approach to supplier management contribute to the overall business strategy?

According to Ivalua, there are five key ways in which a strategic and holistic approach to supplier management can contribute to the overall business strategy: 

1. Establish supply assurance and mitigate disruptions
2. Build more resilient supply chains to withstand volatility
3. Support growth plans, product innovation and entry into new markets
4. Drive sustainability initiatives, particularly reducing Scope 3 emissions
5. Improved accuracy and quality of supplier master data

“An effective SRM framework provides a set of principles, processes, and tools to establish a governance structure and manage ongoing operations during the lifecycle of a supplier,” commented Patel.

He adds: “Holistic Supplier Management establishes a strategic supply chain strategy that can deliver sustained value, lower risk, and improve performance. Every organisation has its unique needs, and reaching best-in-class should not be compromised by technology limitations. Market share and bottom-line profitability are all at risk when supplier strategy is not aligned with business strategy.”