AP » AI-drive spend management reduces costs by 20%

AI-drive spend management reduces costs by 20%

As CFOs and other finance leaders seek new operating efficiencies and savings to create opportunities for investment and growth, AI-driven autonomous sourcing is slashing costs by 20%, boosting productivity, and increasing speed-to-market for leading enterprises, according to new research from HFS Research and Globality.

The report, titled Freedom within Fences: Autonomous Sourcing Goes Mainstream, explores how leading Global 2000 companies such as Fidelity Investments, T. Rowe Price, and UCB Pharma are leveraging the game-changing technology, enabling CFOs and Chief Procurement Officers to increase visibility and control of every dollar they spend.

“We now require only eight resources instead of 50,” said Matt Prichard, CPO, Fidelity Investments. “We have achieved over 20% savings compared to standard rates. It took about three months to break even, and after that, it was all pure savings resulting in the company’s bottom line.”

Key findings in the report include:

  • Cost Savings – Automated spend management is delivering immediate savings of 20% and enabling enterprises to competitively manage more spend, even with lower procurement headcount.
  • Efficiency and Speed – Traditional RFx processes often take up to six months but autonomous sourcing enables companies to go to market in as little as 23 minutes and complete 64% of projects in less than a day.
  • Strategic Impact – AI-driven spend management automates many aspects of the corporate buying model, allowing procurement teams to shift focus from transactional tasks to strategic initiatives that help drive business growth.

“CFOs are seeking to deploy AI to reduce costs and capture operating efficiencies.  The procurement function is the low-hanging fruit for achieving that objective because deploying AI-powered sourcing and procurement is the quickest and easiest way for Global 2000 enterprises to generate substantial value,” said Globality Chairman, Co-Founder, and CEO Joel Hyatt.

“Our customers are saving hundreds of millions of dollars through the use of AI-driven sourcing technology and making faster, smarter spending decisions.”#

Case Studies in Action

Fidelity Investments: The financial services giant has seen a 50% reduction in time to contract and a 20% savings rate by automating high-volume transactions through AI-powered procurement. This has significantly enhanced operational transparency and efficiency.

UCB: The European biopharmaceutical company uses GenAI for cost management, risk assessment, and market analysis. The AI-generated recommendations have surpassed traditional methods, optimizing procurement operations and aligning them with digital advancements.

T. Rowe Price: By leveraging an AI-powered autonomous sourcing platform, T. Rowe Price has reduced procurement friction and improved process velocity, achieving significant cost savings and enhanced sourcing efficiency.

Recommendations for CFOs

The report offers several recommendations for CFOs contemplating the adoption of autonomous sourcing platforms. Simplifying technology integration is a key step; autonomous sourcing tools can be deployed with minimal integration into existing systems. However, adding connections to P2P, CLM, and supplier risk systems can provide additional benefits, enhancing the overall functionality and efficiency of the procurement process.

Involving key stakeholders is also crucial. Engaging C-suite executives in the selection and implementation of autonomous sourcing platforms ensures that there is a clear understanding and support at the highest levels of the organization. Clearly defining roles and responsibilities based on purchase value and category helps streamline the process and ensures accountability.

Furthermore, utilizing AI and data analytics is essential for continuously refining procurement strategies. Leveraging these insights allows CFOs to expand the platform’s capabilities to address more complex procurement needs, ultimately leading to more strategic and informed decision-making.

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