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SPEND UNDER MANAGEMENTNovember 2014

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Procurement As A Non-Strategic Back Office Function? Really?

Ever wonder why many companies view indirect procurement as a non-strategic back office function? Maybe it’s the inherent challenge of measuring tangible financial savings versus indirect spend sourcing projects. Maybe it’s the challenge of tying how these pursuits impact fiscal metrics such as total cost of ownership (TCO), operating earnings, operating investment capital and cash flow among others.

For these reasons, taking on a well-structured spend management framework that establishes the relationship between sourcing savings and P&L benefits can bring genuine benefits to the and the procurement organization.

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What is Spend Under Management (SUM)?

• SUM is an important organizational philosophy impacting and driving the spend under management in each company and its respective BUs, Functional areas and P&Ls. The benchmark for excellence is 85%+ enterprise SUM 

• Analyst firms like Aberdeen Research have conducted research that shows companies can achieve an additional 5% to 20% cost savings for each new dollar of spend brought under management. This can result in millions or even tens of millions in cost benefits that can be either reinvested or directed towards the bottom line therefore impacting earnings per share

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• Furthermore, SUM is really a much more than a classic sourcing framework. SUM highlights the application of intelligent technological innovation, actionable information as well as robust processes in order to meet corporate objectives

• SUM considers often overlooked non-pricing competitiveness such as adherence to contract conditions as well as prices, purchase order concurrence, demand management, and automated supplier performance management – where leakage most often occurs

What is Spend Under Management (SUM)?(continued)

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Want to learn more?

• For more details on spend under management and what it can do for you, browse our website and download the complete white paper here www.xeeva.com/free-white-paper-spend-under-management-principles/

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About Xeeva, Inc.

• Xeeva is driving the development and delivery of the next generation of intelligent cloud procurement and financial solutions for indirect spend and MRO

• Xeeva’s technology is used in over 40 countries and is available in 18 languages

• The company’s technology suite includes Sourcing, Procure to Pay, Supplier Collaboration, Financial Collaboration and Extended Enterprise solutions

• For more information contact us at results@xeeva.com or visit our website at www.Xeeva.com