Organizations that choose to make spend management a priority often seek to achieve their savings and efficiency goals through the implementation of a cloud-based Business Spend Management (BSM) application. Those embarking on this implementation have an exciting and rewarding journey ahead.

Here are five steps that will set you on the path to a successful BSM implementation:

1. Select the Right Project Team and Steering Committee

While there may be a dedicated project manager and implementation partner for a BSM implementation, most individuals involved usually retain their daily responsibilities. Selecting the right team across different roles will to help pave the way for adoption and ensure that the “voice of the customer” is heard and acted on:

  • Steering Committee – Comprised of leadership across Procurement, Finance, and IT
  • Functional Team – Provides input on current state; often will become the testers and end-user trainers
  • Technical Resources – Understand the BSM technology and how it integrates into the technology landscape; often helps build connectors and participates in training
  • Change Champions – People with significant visibility in the organization who can influence larger groups and advocate for adoption of the BSM tool

As part of project kick-off, sharing the project plan, expectations, and level of commitment expected from each role in the team will help to set the tone. Maintaining a consistent communication cadence with the group and providing opportunities to collaborate will also benefit the perception that the BSM implementation is a cross-functional and transformative effort.

2. Determine Success Criteria

One of the core benefits of BSM applications is the ability to measure and report on key metrics. However, it can be easy to either set expectations too high or to not implement key performance indicators (KPIs) at all. Without KPIs, it is difficult to communicate ROI to executive leadership. Avoid these challenges by identifying current state benchmarks as a baseline and then set achievable goals, such as different milestone measures after three, six, and nine months.

A few common indicators include:

  • Percentage of invoices received electronically from suppliers (which reduces manual invoice data entry);
  • Cycle time to approve a purchase requisition/ purchase order/ invoice (an indicator of approval/ processing efficiency);
  • Number of purchase order’s created after an invoice (which is an indicator of lack of pre-approval for spend); and
  • Invoice matching rate percentage (an indicator of volume of invoice exceptions Accounts Payable [AP] must manage).

3. Engage Key Stakeholders

Successful change management and training relies on early buy-in and support from the extended stakeholder group. As the implementation begins, meet with key users from the business (e.g., Marketing, Sales, Product Development, Facilities, Engineering) and super users of the system (Finance, Accounting, AP) to share the vision and selected tool. Use this time to collect feedback on adoption issues, conflicting initiatives, or other organizational changes that may impact the successful deployment of the BSM tool. If you are new to the organization, use this opportunity to build relationships and gain an understanding of the change management tactics that were successful (or unsuccessful) in past technology rollouts.

 4. Collect Supplier Emails for Online Portal Registration

External stakeholder alignment and communication is equally as important as internal alignment. BSM applications embed suppliers within your application (i.e., the preferred tools do so at no charge to the supplier). Cutover communication is one piece of the external communication puzzle. However, without valid email addresses, invoice digitization and portal adoption will prove to be a challenge. If emails are not readily available, start a campaign to build your library of emails; you can continue this effort post go-live using your BSM application.

5. Begin Payment Process Optimization

While savings and process efficiency are often focused on the upstream processes, don’t neglect the opportunity to also improve payments. Reducing the reliance on checks and increasing use of Automated Clearing House (ACH) can reduce both Days Payable Outstanding (DPO) and the risk of fraudulent payments. However, there can be a long lead time to coordinate setup and testing with banks. Starting these efforts early will yield benefits in the long run.

Ultimately, a BSM application will transform many aspects of your organization. Taking the right approach pre-implementation will help set your organization up for post-implementation success.