84% of Finance Leaders Say Spend Management Accelerates Digital Transformation, with 78% Linking It to Revenue Increases

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Oct 22, 2024, 10:00 ET

New Tropic and CFO Dive report shows spend management is effective across organizations, yet resistance to investing remains a critical barrier.

NEW YORK, Oct. 22, 2024 /PRNewswire/ -- As businesses navigate economic uncertainty and increasing complexity, a new report from Tropic and CFO Dive reveals that an astounding 99% of finance leaders using spend management believe they are operating efficiently, with 84% saying it has been very or extremely effective in accelerating digital business efforts. However, many companies are still slow to invest in the tools that could unlock further growth. Based on insights from 158 finance and procurement leaders, the report highlights the growing impact of spend management on both back-office efficiency and company-wide growth. Despite clear ROI, spend management continues to fight for attention against more glamorous software investments.

Further, as organizations must balance AI investments, tech upgrades, and regulatory demands, the report uncovers that spend management is providing more than just operational relief. It's transforming how companies plan and allocate resources, proving that optimizing spend isn't just about cutting costs—it's about enabling strategic advancement.

"Finance executives are realizing that spend management has evolved from a back-office function into a powerful enabler of growth," said Russell Lester, CFO of Tropic. "It's not just about saving time; it's about leveraging data and insights to make smarter, faster decisions that benefit the entire business. Yet, many companies are hesitant to invest in the right tools, which is like driving with the handbrake on—you'll get there eventually, but you'll waste a lot of resources along the way. When you optimize where and how you spend, you free up time and resources to focus on revenue-generating activities."

Key Findings:

Growth and Revenue Impact: 78% of finance executives report that spend management has been key to increasing revenue, while 77% see it as a competitive advantage and 75% say it improves operational efficiency.
Visibility and Control: 99% of respondents who report they are operating efficiently, maintain visibility into all supplier contracts and expenses through a centralized contract management system, ensuring greater control over spend and reducing risk.
Burn Multiples Reduced: Companies that fully leverage spend management software report lower burn multiples, with many operating at 1.4 or less—indicating highly efficient growth.
Growth Software Still Dominates: Despite spend management's proven value, organizations are still prioritizing growth software, such as sales and marketing tools, at a 3:1 rate.
Notable Investment Gap: While respondents see spend management as a proven driver of efficiency, 68% of finance leaders cite inadequate investment as a top barrier to further gains. This lack of commitment is a missed opportunity for companies to streamline operations and drive growth.

"Companies are spending millions on growth software, but without intelligent spend management, they're bleeding cash through inefficient processes," said Michael Shields, VP of Procurement Strategy at Tropic. "Our research shows that when spend management is prioritized, the benefits extend beyond the finance department—they positively impact the entire organization. Many companies are quick to invest in sales and marketing tools but slow to act when it comes to controlling spending. The discrepancy is glaring, and it's costing them."

Download the Full Report:

For more insights and the complete data breakdown, download the full Tropic and CFO Dive report here or get in touch to learn more about how intelligent spend management can be your competitive differentiator.

About Tropic

Tropic is the only intelligent spend management platform that integrates unbiased market intelligence with comprehensive and powerful spend control capabilities, turning technology into a buyer's market. Underpinned by a robust AI system, Tropic automates procurement and spend workflows, empowering finance, procurement, and IT leaders to maintain visibility, control, and leverage over all supplier spend, driving maximum efficiency and significant savings. Trusted by over 500 customers with $10B in managed spend, Tropic transforms how organizations approach technology procurement, ensuring informed decisions that eliminate waste, mitigate risk, and optimize financial operations at any stage. To learn more about Tropic, connect with us on LinkedIn or visit tropicapp.io.

SOURCE Tropic