Coupa & Deloitte: Ways TMT can Find Sustainable Growth

Businesses are operating amidst ongoing global economic and political uncertainties — making cost optimisation of paramount importance across industries.

Organisations now more than ever need to address issues such as supply chain disruptions and raw material shortages that are driving up prices, skills shortages and rising pay that are creating tighter labour markets and high inflation that is squeezing business and consumer spending while impacting margins.

For the technology, media and telecom (TMT) industry, this focus on cost is not just about reducing expenses. Each sector relies heavily on technology-led innovation and consumer choice to remain competitive. Cost transformation needs to align with sector priorities and the strategic investment and growth agenda while delivering tangible efficiency improvements.

The emergence of targeted technology innovation is critical in achieving the fine balance between cost optimisation and investment — both in terms of an organisation’s customer offerings and how they operate — to deliver profitable growth. AI, particularly generative AI (Gen AI), has transformed the landscape, playing an increasingly vital role in key areas of every TMT business.

Meanwhile, 5G networks and the cloud continue to offer new levels of connectivity and performance.

Deloitte’s survey of over 100 Chief Procurement Officers (CPOs) highlighted the transformative potential of Gen AI in procurement.

The survey revealed that 92% of CPOs are planning and assessing Gen AI capabilities in 2024, underscoring its critical role in driving cost optimisation and operational efficiency.

One survey respondent noted: "The potential for the use of Generative AI is a game changer for procurement. The opportunity to finally move away from transactional, low-value activity and apply real strategic business partnering has huge potential to deliver additional value and change the perception of procurement forever."

In a new report, Coupa and Deloitte explore some of the specific business challenges facing each TMT sector and how the intelligent application of AI-driven technology can help organisations enhance both direct and indirect spending while delivering profitable and sustained growth.

Key sector-specific trends and challenges

The technology and semiconductor sectors are experiencing renewed growth driven by AI advancements, with increased investment in digital supply networks and a shift towards US-based intelligent manufacturing. These sectors face challenges around raw material shortages, particularly for critical elements like gallium and germanium, while balancing the need for cost reduction with future growth investment and improved supply chain sustainability.

The media sector is undergoing significant changes following its pandemic-driven growth, with consumers becoming more selective about streaming subscriptions despite continued demand for quality content. Meanwhile, the telecom industry is evolving rapidly as new providers join traditional CSPs, expanding the market to meet growing connectivity demands through network upgrades and cloud-based solutions. Both sectors are increasingly turning to AI technology — particularly in areas like customer service and operational efficiency—to maintain competitiveness while managing costs.

Five ways to achieve profitable and sustainable growth

Coupa and Deloitte outline the spending profiles of different TMT sectors, which vary significantly. At one end of the spectrum, the media sector is dominated by indirect spending on services, while a large proportion of technology and semiconductor expenditure is direct spending on raw materials and components. The telecom sector sits between the two. However, a common goal unites all three sectors — focusing on process efficiency to optimise costs and drive profitable growth.

The partnership has identified five ways in which AI-enabled technology can help:

1. Unlock the power of AI with the right data

AI is poised to significantly alter societal operations and is already transforming business practices. However, the effectiveness of AI solutions relies heavily on the quality of the data they utilise. Data sourced from the internet and processed through public large language models can lead to AI systems that reflect and amplify inaccuracies, resulting in untrustworthy outcomes.

In the Technology, Media and Telecommunications (TMT) sector, poor data quality can lead to issues such as biased decision-making, intellectual property violations and data privacy breaches. Therefore, it is crucial to provide high-quality data that is ethically sourced from a wide range of customers and suppliers over time. Such data can deliver reliable predictive insights, prescriptive decisions and automated actions that organisations can trust.

2. Prevent margin erosion

Businesses across all sectors are vulnerable to margin erosion due to external factors and internal inefficiencies. In uncertain economic times, while sales forecasts may be unpredictable, procurement and finance leaders should focus on managing total spending more efficiently to enhance cost reduction and avoidance. Their success hinges on effectively applying advanced technology and reimagining processes to achieve necessary visibility and automation.

An accurate understanding of resource usage is essential for protecting margins, as greater visibility enables companies to analyse spending, leverage buying power and control costs, particularly in technology, media and telecom sectors. This end-to-end visibility, supported by AI-powered benchmarking data, allows leaders to identify and challenge spending habits, freeing up funds to improve cash flow and profitability.

3. Reduce costs and risk across source-to-contract

Source-to-contract processes are essential for strategic procurement, enhancing supply chain predictability and resilience while offering opportunities to reduce costs and risks across TMT sectors. By retaining a small group of trusted strategic suppliers, organisations can improve buying power and payment terms through structured spending.

AI applications in this context include spend analysis, sourcing opportunity identification, automated negotiations and contract generation. A Deloitte survey found that 50% of organisations using Generative AI in procurement experienced a doubling of ROI compared to traditional methods, highlighting the effectiveness of AI-driven strategic sourcing.

AI can also provide negotiation recommendations to lower costs in specific areas such as software licences, content acquisition, media rights and telecom services. Additionally, AI-driven contract clause writing helps streamline contract management, increasing speed and efficiency in dynamic TMT environments.

4. Increase efficiency across procure-to-Pay

Procure-to-pay (P2P) systems combine purchasing and accounts payable operations to improve efficiency. Through digital automation enhanced by AI, organisations can better manage their purchasing processes, from buying and approvals to compliance and payments. AI-powered features, including virtual assistants and automated processing, help streamline catalogue purchases by non-professional buyers, reduce manual work, minimise errors and fraud and speed up the entire procurement cycle.

5. Manage expenses more quickly and efficiently

Managing employee expenses is particularly challenging in the TMT sector due to its diverse workforce. While most companies have basic expense policies, technology can enhance the process through end-to-end automation. AI and mobile solutions enable real-time expense submission, automated receipt processing and faster approvals. This not only improves user experience but also helps detect fraud, ensure policy compliance and identify cost-saving opportunities through data analytics.

Coupa and Deloitte: Breaking down silos

In the rapidly evolving TMT industry, optimising costs requires a comprehensive view of total business spending. Coupa's AI-powered platform, which leverages a vast B2B customer-consented dataset, automates and connects processes across the entire source-to-pay cycle, unifying procurement, finance and supply chain operations.

Deloitte, as one of Coupa's largest systems integrators, offers expertise in implementing Coupa's platform to meet the specific needs of TMT organisations. Through its IndustryAdvantage™ framework, Deloitte combines industry insights with Coupa's AI capabilities to drive targeted transformation, helping businesses adapt to market changes.

The Deloitte survey of CPOs indicates a strong trend towards investing in Gen AI capabilities in 2024, highlighting the technology's potential for enhanced insights, productivity gains and cost optimisation.

The collaboration between Coupa and Deloitte aims to break down silos, facilitate data-driven decision-making across all spending categories and empower businesses to operate more efficiently and achieve sustainable, profitable growth through improved collaboration and intelligent insights.

To read the full report, click here. 

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