Executive summary
The global pandemic put businesses on notice that shifting work conditions are here to stay. Still, firms around the world are playing catchup to accommodate these changes because employees frequently mix hybrid, remote, and borderless work. As digital needs and preferences continue to evolve at speed, organizations seek more adaptable, creative, and resilient ways to work.(1)
Businesses are increasingly tasked to modernize their processes and technology infrastructures to keep pace. This is the case across enterprise resource planning (ERP), which critically ties finance and operations together to optimize efficiency and enable business continuity.(2)
As businesses scale globally, decision-making around expenses will continue to shift from finance offices into local work environments, necessitating better spend management programs that optimize costs, adapt to local requirements, and maximize business results. This calls for a user experience that’s personalized, empowering, and intuitive for all roles in all relevant geographies and that keeps pace with emerging areas like AI.
Brex commissioned Forrester Consulting to evaluate the state of spend management at global organizations. To explore this topic, Forrester conducted an online survey with 304 decision-makers responsible for expense management technology at their organizations. We found that modernized spend management programs help companies unlock greater insights, efficiency, and financial performance toward achieving improved competitive advantage.
Key findings
Firms can leverage spend management more to achieve business goals.
Surveyed decision-makers believe spend management processes play an instrumental role in the performance of their companies and employees. However, firms are not making the most of the spend management capabilities already available to them, and they are not modernizing their spend management systems with the urgency required for global business needs.
Poor spend management creates waste and risk.
As firms struggle to keep pace with the evolving nature of global business needs, employees feel less supported, and businesses are taking on additional, unnecessary risk. Poor spend management can impact profits and employee experience (EX).
Modernized and real-time spend management means better EX and business performance.
Firms armed with integrated spend management systems and up-to-date insights across geographies and functions stand to improve employee satisfaction, bottom-line results, and the ability to make key business decisions.
The future of spend management is global and AI-driven.
To accommodate distributed work and achieve key goals in operational efficiency, the spend management leaders of tomorrow will prioritize solutions that enable real-time integrated capabilities, localized offerings, and AI-powered decision-making.
Firms Require More From Their Spend Management Solutions
While spend management programs are hardly a new consideration for most firms, the reality is that decision-makers must think of spend management differently in today’s business climate.3 With the current, global nature of work, spend management programs must cater more to local employee environments and business needs. Four in five surveyed decision-makers said their firm’s business needs have recently shifted to accommodate remote/hybrid work conditions. They also confirmed that using a modern, unified, and global spend management program is important to meeting these needs.
However, we found that while respondents feel their firms have the spend management features they need, the effective usage of these capabilities is both lacking and inconsistent at best (see Figure 1). Though the capabilities exist, they may not be easily accessible, convenient to use, or tailored to evolving needs.
How well you manage spend can make or break your business
Respondents said that as business and employee needs continue to evolve, their firm’s top business goal during the next year is prioritizing operational efficiency (see Figure 2). As such, companies are tasked to find ways to cut costs, improve productivity, streamline operations, and improve decision- making. Surveyed decision-makers feel spend management is crucial toward achieving these goals (see Figure 3). But one in three respondents (35%) do not feel their organization is future-fit for global spend management, while half (48%) feel their firm doesn’t have the technology it needs to navigate its current spend management challenges.
Poor Spend Management Practices Hurt Costs, EX, And Decision-Making
Firms are struggling to adapt to shifting work environments and global business needs. Nearly seven in 10 said it’s challenging to manage spend for a global workforce, and 63% said the current challenges of hybrid/remote work are difficult for their organization (see Figure 4). Respondents said
that within their firms’ current spend management programs, there are poor employee reimbursement practices (70%), a lack of real-time allocation capabilities (69%), an excess of manual work (68%), and an absence of unified views to manage spend (68%). This signals that there’s room for improved workflows and global solutions.
“Forms of [expense] reports vary from country to country, making it difficult to keep track.”
— VP, US
Of note is that respondents cited issues with features and in functional areas where they said their firms already have key capabilities. This begs the question: Do firms fully realize the extent to which poor spend management practices are hampering the business?
Ultimately, poor spend management can:
Add to costs. More than half of respondents (58%) said their firm’s spend management challenges lead to an increase in operational costs for the business (see Figure 5). Poor tracking and management of employee and company expenses inevitably lead to dollars poorly spent or falling through the cracks.
Hamper decision-making. Fifty-five percent of decision-makers said that as a consequence of their firm’s spend management issues, leaders are unable to make sound decisions given the poor understanding of spend data. Without real-time, unified, and automated insights and tracking capabilities, firms are forced to make decisions with incomplete, poor, or delayed data — if not all three.
Increase risk. Nearly half of respondents (49%) said they feel their firm is at greater risk of compliance/regulation oversight given its spend management problems. As companies struggle to adapt to major business shifts, they naturally create greater opportunities for risk and unnecessarily put their company in harm’s way. For US-based firms, risk takes another form: Respondents from these organizations (51%) were more likely to say poor spend management stifles their organization’s ability to compete/differentiate its offerings than respondents from organizations outside the US (33%).
“Due to its slow progress and features, [my firm’s spend management platform] has hampered our team productivity.”
— C-level executive, US
Unified, Real-Time Spend Management Drives EX And Business Performance Globally
Faced with a spend management choice between maintaining the status quo or adapting to the global nature of business, the encouraging news is that every company can act and assume greater control for how it connects finance, operations, and EX to elevate its spend management to a greater, global scale.
Eighty-three percent of respondents confirmed that spend management is a high priority for their company’s leadership (see Figure 6). And companies are prepared to act. Two in three respondents (65%) said their organization plans to invest significantly in spend management during the next year to address these shortfalls and modernize its spend management solutions.
From their firms’ investments and spend management initiatives, decision-makers expect:
Improved real-time capabilities. More than half of decision-makers (54%) anticipate greater real-time visibility from their firm’s spend management investments (see Figure 7). Improved automation capabilities and unified views stand to increase efficiency and provide stronger, more trusted insights to drive the business.
Better integrated experiences. Fifty-one percent of respondents expect their firm’s integrated accounting systems to benefit from its spend management improvements. This would make it easier to track taxes and fees, unify and access financial information, and enable compliance with regulations, thus reducing potential risk.
“All our bills and credit cards are coded automatically, which saves a lot of time and manual effort.”
— C-level executive, Signapore
Greater ease of use. Half of respondents (49%) expect investments in their firm’s spend management program to make it easier to carry out key tasks, such as tracking global employee spend and booking global travel. Though they deemed these capabilities to be table-stakes features their firms already had access to, respondents clearly suggested their organizations would benefit from a more intuitive user experience.
Further, respondents not only expect their firms to reap these benefits, but they also expect these benefits to make a sizable impact on the entire business and its goals.
Decision-makers ultimately expect these benefits to address key challenges their organizations are experiencing, and they believe they will lead to larger outcomes such as:
Stronger EX. Spend management improvements cater to both business and employee needs, which helps ensure employees are satisfied, productive, and supported. Two in three respondents (64%) expect their firm to see increased employee satisfaction from its spend management improvements during the next year (see Figure 8). And when employees find it easier to comply with and execute on their spend-related tasks, finance teams are able to close the books more efficiently. This is the result of globally effective capabilities tailored to local employee needs and environments.
“[Through our spend management platform] the time spent to track down expenses has reduced [by 5 hours per] week.”
— VP, UK
Greater financial performance. Three in five respondents expect their firm’s financial performance to improve from its spend management investments. In addition, those who expect to save on costs anticipate an average cost reduction of 5%. This could provide a significant boost as firms fight to differentiate themselves, trim inefficiencies, and optimize ROI in competitive markets.
Improved decision-making. More unified data, integrated systems, and automated capabilities beget greater data visibility and insights, and this equips leadership to make better, more informed, and agile decisions in pursuit of stronger productivity payoffs. Similarly, respondents said AI will play an outsized role in influencing their firms’ business strategy decisions (82%) and providing global spend insights (73%) into the future. Firms must give AI the attention it warrants today to further fuel efficiencies, bolster financial performance, and grow business.
Next-gen spend management is global, real-time, and intelligent
Going forward, prudent firms will invest in and customize spend management capabilities that accommodate global, distributed business and help them achieve both growth and operational efficiency goals.
These key capabilities could enable:
Real-time, agile business operations. Leaders in spend management can leverage cross-functional platforms synced with their firms’ accounting and ERP solutions and integrated dashboards with up-to- date spend insights across geographies. Firms that prioritize a single source of spend management truth and easy-to-use experiences will empower both employees and finance teams to make smarter, faster, and more cost-effective decisions.
Seamless global business networks. Future-minded decision-makers ensure their firms are prepared for global functionality. This includes having the ability to reimburse employees in their local currency; ship credit cards to employees where they live; and customize spend management processes around local regulations, languages, and accounting needs. Doing so provides agile and tailored solutions for distributed workforces while helping to maintain compliance and standards of operating.
AI-powered decision-making. Spend management leaders must plan for a future with AI. The ability of AI to automate key workflows such as populating accounting fields, creating expense reports, and forecasting future spend offers considerable value, financial savings, and time savings. AI positioned to generate customized insights and advanced decisioning further empowers finance teams and leadership to navigate the global needs of tomorrow, and it gives organizations a competitive advantage.
Key recommendations
Spend management is integral to a firm’s business because it impacts experience, growth, and profit. It can no longer operate separately from the rest of the business in siloed pieces. It must cut across all geographies and types of spend. Great business results require seamless and real-time insights into all expenditures and how they connect to business performance and growth.
Forrester’s in-depth survey of 304 technology decision-makers about spend management yielded several important recommendations:
Prioritize feature adoption, not just feature selection.
Our study showed that many features exist but are not being utilized. To maximize your spend management investments, make sure you plan for the change management required to get the most out of your investment. While spend management solutions are commonly found in the cloud and prioritize ease of use, change management is always a factor in more disruptive and transformational initiatives; even the best technology does not work without the right supporting people and process changes.
Don’t fall into the trap of thinking all AI is generative AI (genAI).
Though AI has been around in enterprise software, it has clearly taken off recently and become the focal point of most discussions about the future of software. To set up your firm for success, make sure you understand how your spend management technology incorporates AI and make sure you do not limit your definition to only new, hyped-up areas of AI. Automation and machine learning remain very powerful and legitimate forms of AI that drive strong results. You should also make sure to plan in relation to wider corporate AI initiatives and investments.
Connect to other enterprise systems for disruptive results.
Spend management can give your firm valuable insights into all things expense in the business and can let leaders make better decisions more quickly. Having a connected view across spend management yields better visibility and insights. But there’s even greater potential from connecting expense systems to your organization’s other enterprise systems for a combined view of activities and revenues and how they relate to those expenses. That will enable you to get a more granular look at what expenses are useful to the business and what are not, which will help you reroute spend to where it will yield the best benefit.
Appendix
Appendix A: Methodology
In this study, Forrester conducted an online survey of 304 expense management technology decision-makers at global organizations to evaluate the state of spend management. Survey respondents included decision-makers in C-level executive and vice president roles. Questions provided to the participants asked about their organizations’ priorities, spend management challenges, and expected benefits of modernized spend management programs. Respondents were offered a small incentive as a thank you for time spent on the survey. The study began in August 2023 and was completed in September 2023.
Appendix B: Demographics
REGION
North America 50%
APAC 34%
EMEA 17%
COMPANY SIZE
20,000+ employees 9%
5,000 to 19,999 employees 23%
1,000 to 4,999 employees 68%
SPEND MANAGEMENT TECHNOLOGY STRATEGY RESPONSIBILITY
Final decision-maker 81%
Part of decision-making team 16%
Influences decision-making 3%
COUNTRY
US 33%
UK 17%
India 17%
Singapore 17%
Canada 16%
DEPARTMENT
Finance 41%
Procurement 40%
Accounts payable 10%
Accounting 9%
ORGANIZATION FEATURES
Has a US location 100%
Works with customers outside the US 100%
Has employees based outside the US or has plans to expand globally 100%
TOP INDUSTRIES
Technology 20%
Manufacturing/materials 8%
Retail 6%
Healthcare 6%
Financial services/insurance 6%
POSITION
C-level executive 33%
Vice president 67%
Appendix C: Supplemental Material
RELATED FORRESTER RESEARCH
“Enterprise Resource Planning Market Insights, 2023,” Forrester Research, Inc., September 25, 2023.
August 2, 2023, “Making The Business Case For Modernizing ERP,” Webinar.
Appendix D: Endnotes
1 Source: “What Makes A Future Fit Platform Strategy?,” Forrester Research, Inc., May 11, 2023.
2 Source: “The Technology Architect’s Essential ERP Research,” Forrester Research, Inc., September 11, 2023. 3 Source: “The State Of Digital Banking, 2023,” Forrester Research, Inc., March 16, 2023.
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