Procurement innovation: The evolution of spend management

3,000 to 1,300BC: The Stone Age and Bronze Age

The most crude forms of procurement date back to these time periods. To construct the pyramids, Egyptians used scribes to record the amount of materials needed and traded with local civilisations to exchange the goods and services required. 

During this time, long-distance trade was limited to luxury goods.

200BC to 1500AD: The Iron Age and Middle Age

With the invention of ships, long-distance trade became increasingly popular.

Currency was adopted for easy payment and records were kept to keep track of both payments and debts.

1800 - 1900s: 19th century and early 20th century

With the boom of the industrial revolution, supplier networks grew and purchasing became its own department. 

Despite this growth, companies struggled to effectively manage and analyse their spend to gain valuable insights. 

The industry lacked the systems required to address indirect spend, transparency, compliance, and manage spend ahead of time.

1950s to 1960s: The Great Depression and WWII

With purchasing as a standalone function, a new phase in finance was brought about: AP and procurement. 

Events such as the Great Depression and WWII showed that prices, quality of materials and supplier performance affected transactions, which led to the requirement of legal and administrative work for all purchases.

1970s to 1990s: Emerging technology and the dawn of the World Wide Web

It is during this time that the importance of spend management grew. Many realised the value it provided when it came to shorter product life cycles, cutting costs and improving communication.

The dawn of the World Wide Web by the 90s further accelerated the globalisation of supply chains and the impact technology can have on ensuring effective procurement processes.

2000s to the present day: Spend management in the 21st century

The technology boom! Along with the introduction of advanced solutions, the tech boom increased production capacities and provided creative customisation. 

The last two years have shown the need for resilience, agility, transparency and effective spend management to maintain business continuity and a competitive edge. The likes of cloud, AI and automation have increased the function’s ability to spend time on value-adding tasks instead of time-consuming manual processes.

What does the future hold for spend management?

Whilst in these uncertain times, it is hard to be sure what the future holds for spend management amid ongoing disruptions; one thing is for certain - technology will play a vital role in its success, alongside the need to build strategic supplier relationships.