A Cultural Shift: Paying More Attention to Spend — Not Just Savings

A couple of weeks back, my local paper, The Chicago Tribune, published an article raising the question as to whether the recession could "yield a permanent cultural shift in spending habits". While the main focus of the article was evolving spending patterns on the home front (e.g., having people over for drinks vs. heading out for "expensive cocktails"), the piece raised the broader issue for me about changes in spending philosophy in the workplace. Finally, like many of the personal examples in the article, it would seem that as a society we are beginning to not think of spending just in terms of something for procurement organizations to influence, but as something for all of us to begin to more closely manage and think about ourselves.

Just as one of the subjects of the article who “appreciates the frugal lifecycle [and] who now spends a quarter of what he once did on clothes and buys furniture at the Restoration Hardware outlet, rather than the company's full-price store," I'm seeing noticeable shifts in companies who are making the most of doing more with less. In perhaps the most common case, nearly all of the Fortune 500 has materially cut travel budgets. But a side impact of less travel is that employees are spending more time in their home offices, working more closely with their colleagues and often coming up with more creative ideas for savings.

From a category perspective, IT spend represents perhaps one of the best examples of changing corporate spend philosophies. For example, I can reference a number of cases where I’ve spoken to multiple procurement organizations in the past quarter that are taking a new view to IT spending. For some, this has meant putting off large ERP upgrades or investments for 18-36 months. But these situations have in turn given more leeway for procurement stakeholders to consider other targeted Spend Management that will cost less and deliver faster returns.

In other situations, this changing philosophy has meant teaching business users to get more from their own equipment (e.g., stretching out notebook and desktop upgrade cycles by another year vs. the standard two or three year upgrade cycle). Of course we can always save more by sourcing and managing spend more effectively and efficiently, but in today’s times, sometimes buying less -- or buying less often -- combined with getting more from our existing assets represents the best Spend Management philosophy of all.

Jason Busch

Discuss this:

Your email address will not be published. Required fields are marked *