As the global economic crisis continues, all eyes are on spend
management. According to a new report from Ariba, Inc.
(Nasdaq:ARBA), companies of all sizes across industries are
prioritizing strategies to minimize costs and risks while managing
cash and performance in an effort to accelerate savings and drive
long-term growth.
�As the global financial crisis wears on, leading organizations
are elevating the strategic role of spend management and investing
in the resources and processes needed to identify and realize
savings now,� said Hari Candadai, Director, Solutions Marketing,
Ariba, and author of the Ariba report �The Return to Profitability:
Spend Management Priorities to Accelerate Savings and Drive
Long-Term Growth.� �Companies are realizing that the very real and
near-term return on investment associated with spend management
initiatives makes a compelling business case for action now, even
in an environment where budgets are tight or frozen in most areas,
as it is a question of survival to many.�
Spend Management Priorities
To determine the spend management strategies that organizations
are prioritizing to achieve these goals, Ariba recently polled more
than 225 procurement, finance, and business executives from across
the more than 1,000 companies that make up its global customer
base. Nearly 85 percent of the participants represented companies
with more than $1 billion in annual revenue across the Americas,
Europe, Asia Pacific/India and the Middle East/Africa. What emerged
was a clear and consistent set of objectives:
Identify Savings Opportunities Faster - To cope with the
down economy, companies are adopting new approaches to maximize
savings and profits, including cutting costs, managing cash,
mitigating supply risk and targeting new spend categories for
reductions.
�Leading companies know that speed to cost savings and cash
improvements is critical not only for near-term survival but for
long-term competitive advantage,� Candadai said. �As such, they are
accelerating improvements in these areas by standardizing policies
and procedures, automating the complete source-to-settle lifecycle
and when necessary, using outside resources and expertise to
generate results more quickly.�
Increase Spend Under Management � While many
organizations have identified millions of dollars in savings in
white-collar MRO and basic direct materials, a number have left
certain categories untouched, including: legal, marketing,
professional services, employee benefits and IT. Now, they are
capitalizing on the current economic conditions to go after these
sacred cows.
�Several quarters of declining economic growth have made it
possible for procurement organizations to target these formerly
elusive categories and bring them under management,� Candadai said.
�By applying consistent and best-practice market diligence,
costing, negotiation and compliance methods across categories,
companies can maximize their spend leverage and drive greater value
for their organizations.�
Automate Procurement Processes � An increasing number of
companies are beginning to recognize that by automating
time-intensive and costly paper-based processes, they can increase
compliance with their spend management initiatives and accelerate
the savings they deliver.
�More than half of all respondents to our survey indicated that
automation is a top priority, and many are applying
technology-based solutions to their sourcing, contracts,
procure-to-pay, and supplier management processes to cut sourcing
cycle times, reduce administrative costs and speed time to market,�
Candadai noted.
Mitigate Risk and Manage Supplier Performance � Concerns
over ability to meet customer demand should a key supplier fail,
reduced innovations and deteriorating quality and service from
suppliers as a result of the recession have made risk and supplier
performance management a top priority for all companies
surveyed.
�A number of the organizations we polled are leveraging market
intelligence and developing next-level supplier relations to
effectively mitigate supply risk and will be well-positioned to
emerge from the downturn with a competitive advantage,� Candadai
said.
Across the board, participants in the Ariba survey recognize
that while they are under pressure to reduce costs, they must
balance savings against the long-term stability of their supply
chain.
�At the end of the day, the companies we polled realize that
spend management is the fastest, most efficient way to accelerate
bottom-line results while continuing to deliver for customers and
create value for their organizations, and they are using it to
transform procurement into a key competitive advantage so that they
can emerge stronger from the downturn,� Candadai said.
To learn more about the priorities of leading spend management
organizations and the strategies they are employing to tackle them,
visit: www.ariba.com/go/profitability and download a complimentary
copy of �The Return to Profitability: Spend Management Priorities
to Accelerate Savings and Drive Long-Term Growth.�
About Ariba, Inc.
Ariba, Inc. is the leading provider of on-demand spend
management solutions. Our mission is to transform the way companies
of all sizes, across all industries, and geographies operate by
delivering technology, service, and network solutions that enable
them to holistically source, contract, procure, pay, manage, and
analyze their spend and supplier relationships. Delivered on
demand, our enterprise-class offerings empower companies to achieve
greater control of their spend and drive continuous improvements in
financial and supply chain performance. More than 1,000 companies,
including more than half of the companies on the Fortune 100, use
Ariba solutions to manage their spend from sourcing and orders
through invoicing and payment. For more information, visit
www.ariba.com
Copyright � 1996 � 2009 Ariba, Inc.
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Ariba Safe Harbor
Safe Harbor Statement under the Private Securities Litigation
Reform Act 1995: Information and announcements in this release
involve Ariba's expectations, beliefs, hopes, plans, intentions or
strategies regarding the future and are forward-looking statements
that involve risks and uncertainties. All forward-looking
statements included in this release are based upon information
available to Ariba as of the date of the release, and we assume no
obligation to update any such forward-looking statements. These
statements are not guarantees of future performance and actual
results could differ materially from our current expectations.
Factors that could cause or contribute to Ariba's operating and
financial results to differ materially from current expectations
include, but are not limited to: the impact of the credit crises on
Ariba�s results of operations and financial condition; delays in
development or shipment of new versions of Ariba's products and
services; lack of market acceptance of Ariba's existing or future
products or services; inability to continue to develop competitive
new products and services on a timely basis; introduction of new
products or services by major competitors; the ability to attract
and retain qualified employees; difficulties in assimilating
acquired companies, long and unpredictable sales cycles and the
deferrals of anticipated orders; declining economic conditions,
including the impact of a recession; inability to control costs;
changes in the company's pricing or compensation policies;
significant fluctuations in our stock price; the outcome of and
costs associated with pending or potential future regulatory or
legal proceedings; the impact of our acquisitions, including the
disruption or loss of customer, business partner, supplier or
employee relationships; and the level of costs and expenses
incurred by Ariba as a result of such transactions. Factors and
risks associated with its business, including a number of the
factors and risks described above, are discussed in Ariba's Form
10-Q filed with the SEC on May 6, 2009.
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