We recently conducted our annual Spend Management Priorities and Challenges survey, where over 225 companies weighed in on their approaches to maximize savings and profits and mitigate risk in today’s struggling economy. The objective is to understand what companies are doing today to maximize savings and impact profits NOW and also what separates the cream of the crop from those struggling to survive. The results clearly show that the global recession and risky business environment have pushed procurement to the forefront in many companies - from a cost savings and risk reduction standpoint - and that companies are paying attention to spend management now more than ever.

The full report is available (download it here) and I’ll be blogging about some of the key findings here over the coming weeks. Today, we’ll tackle the highest ranked priorities from the survey.

So, what were the top priorities:

1. Identifying savings opportunities faster is the # 1 focus for most companies - As layoffs mount and credit still remains tight, most companies are focused on identifying and generating immediate savings to cope with the crisis in the short term. Companies are also increasingly looking for quick ROI and immediate savings to demonstrate the value of spend management before seeking the executive support and funding required for a wider roll-out.
2. Increasing spend under management is a key initiative for most companies - Companies are now recognizing the advantages of having more spend under management; ensuring maximum spending leverage and applying consistent and best-practice market diligence, costing, negotiation, and compliance methods to each spending category. Many companies are also taking this opportunity to go after sacred categories like Marketing, Legal, HR, IT, etc.
3. Automating procurement processes is a top priority for many companies - Organizations are feeling the pain of depending on paper and people-intensive processes. Almost two-thirds of the respondents (63%) listed the need for automation across the entire source-to settle process in their top five priorities. Companies realize that automating sourcing, contracts, procure-to-pay and supplier management processes are keys to increasing compliance and accelerating savings.
4. Mitigating risk and managing supplier performance critical for most companies - Mitigating supplier risk and managing supplier performance is one of the main worries for companies today. This can include concerns ranging from how do I meet customer demand if my critical supplies are interrupted to reduced innovations by supplier and deteriorating quality and service from suppliers due to the impact of this recession.

A quick note on the demographics - Participants included more than 225 Procurement, Finance and other executives representing a variety of industries, company sizes and regions. Nearly 85 percent of the participants represented companies with more than $1B in annual revenue. Over 84 percent of the participants were at the manager, director, and VP or CXO level. Companies headquartered in the Americas represented 67percent of the total respondents, Europe followed with 31 percent and the rest representing Asia Pacific/India (1 percent) and Middle East/Africa (1 percent).

Hari Candadai is Director of Solutions Marketing for Ariba and author of The Return to Profitability: Spend Management Priorities to Accelerate Savings and Drive Long-Term Growth, a global study of spend management priorities and strategies.