The Digital Revolution: How Tech Is Transforming Spend Management

Forbes

28-07-2025

Todd Abner is founder, president and CEO of OMNIA Partners, a leading group purchasing org. in the U.S. serving public and private sectors.
While once viewed as a back-office function, procurement has risen to become a top priority in the C-suite, due in part to economic volatility, supply chain disruptions and inflationary pressures. According to ProcureCon's Annual CPO Report, 60% of respondents say their Chief Procurement Officers (CPOs) will be one of multiple leaders spearheading technology initiatives over the next twelve months.
This underlines the importance of today's CPOs becoming well-versed in leveraging technologies like AI, machine learning and predictive analytics to gain competitive advantages in the market. In my experience, this is especially true when it comes to improved spend visibility.
The Challenges Of Spend Management
Historically, a traditional approach to spend management has left many procurement teams struggling to monitor and manage their organization's spend. Here are some of the most common issues:
Without a central hub to store information, data can become siloed, leaving visibility gaps for procurement teams responsible for managing the entirety of their organization's spend. As a result, they are left unable to understand total spend, category-specific spend and more. For example, a university may be experiencing maverick spending, also known as rogue spending, because individual departments are making purchases independently.
Conducting and reviewing spend management manually can be time-consuming for procurement teams who are already under pressure to do more with less while navigating a talent shortage. Many procurement teams face an uphill battle when it comes to the staggering amounts of data they need to parse and the lack of a robust database to which they can compare themselves.
When experiencing visibility gaps and battling through manual processes to better understand spend management, procurement teams often lack the time to drive their organization's strategic goals.
Finding The Right Solution
If you're a CPO preparing to upgrade your organization's spend management, here are three strategies to consider:
Unifying procurement processes across all facets of an organization can help you close visibility gaps while enabling your procurement team to build a better-informed strategy. For instance, clear spending policies with automated controls and approval workflows can reduce maverick spending that might go unnoticed but accumulate quickly.
Additionally, consider standardizing solutions such as product and service selection to eliminate rogue spending. This can help you ensure that rogue spending is managed by exception and process rather than by mainstream access.
In my experience, technology, education and strong communication across an organization are important to a successful standardization strategy. Your procurement team should be prepared to tailor processes to each department's unique needs. For example, what works for an information technology team may not be the best process for a maintenance team. Be advised that this process can be time-consuming at the outset, while your team is crafting the policies, but it should be less so once they are established.
With the right kind of procurement partner, such as a group purchasing organization (GPO), spend analysis can be done in a timely and budget-friendly way that gives procurement teams complete visibility into their organizational spend in real time. (Full Disclosure: My company offers these services, as do others.)
Look for a procurement partner that can not only provide the tools to access sizable spend visibility data but can also help you analyze the insights needed to build a strategic action plan that is benchmarked against current trends and customers. I've found that this type of partnership can empower procurement leaders to rise above the day-to-day operational demands and focus on driving their organizations' broader strategic objectives.
It is worth noting that if your organization has existing relationships with suppliers and feels strongly about maintaining its current network, this may negate the need to work with a GPO. Otherwise, you may have to utilize new suppliers based on the options your GPO provides.
The emergence of new technologies is fundamentally altering how procurement teams process their organization's spend management. One of the biggest shifts is from reflective to prescriptive reporting. Instead of looking back on spend management data to determine what's already happened, you can now use AI to predict or alter future outcomes based on the insights you're extracting. I've observed a number of organizations that invested in the use of AI-powered systems, optimizing their sourcing strategies, diversifying their supplier network and mitigating concentration risks during tumultuous economic periods.
As with all new products and processes, training is important to ensure that employees are up to date and comfortable using these new technologies. Without proper training, employees may struggle, leading to confusion and errors that ultimately create the opposite of the intended effect. To help with this, host regular trainings for your procurement team that include real scenarios that users navigate on a regular basis.
Final Thoughts
The digital revolution in spend management isn't around the corner; it's here. I believe spend management is going to continue evolving from a necessary back-office function to a strategic growth driver. By investing in today's emerging technology, you can help position your company to thrive in tomorrow's procurement environment.
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