As companies around the globe respond to COVID-19 challenges, now is a critical time to determine what organizational changes are needed to address the related risks and position your organization for long-term success.
When leaders think about Enterprise Risk Management, they identify key risks across the organization to develop the company’s risk universe. Risks are then classified into risk categories and ranked by significance. Risks such as changing economic conditions, laws and regulations are typically classified as low likelihood but high impact, decreasing their perceived significance to the organization. These are also perceived risks which companies cannot directly control but can help mitigate through fiscal discipline.
That’s where a strong Enterprise Spend & Data Management program comes into play – all with a focus on tightening spending, improving spend governance and increasing operational resilience.
Establishing this type of platform helps an organization identify the most critical areas of spend, optimize that spend and establish proper monitoring controls for operational oversight. Cutting costs allows businesses to operate in an economical way during tough economic times and increase margins to develop a competitive advantage.
During this difficult time, many companies have taken the first steps to cut spend across the organization. This platform helps you to utilize that data to really focus a sustainable plan for go-forward operations.
Enterprise Spend & Data Management Framework
Evaluation focusing on current spend, budgets and existing agreements.
Evaluation of controls policies, and procedures for oversight of company spend.
Evaluation of future operations focusing on better leverage of spend data, understanding optimal performance metrics and developing tools to manage / monitor key performance metrics.
Companies in any industry can take this same approach. The way we have done business before is not the way we will do business moving forward. Companies that utilize this time to develop these tools will be best positioned for success during the economic recovery. The opportunity cost is too great not to zero in on the increased efficiency and effectiveness of your operations.
With an eye on the future, consider concentrating your organization’s Spend Management program on sustainable operational efficiency, good spending habits and better leverage of technology. These are key factors that will help you address unexpected change, evaluate new opportunities, and continue to manage the company’s risk appetite to an acceptable level.
Stinnett & Associates is not a CPA firm.