Reimagining spend management to drive customer value.
Doug Adamic
·
Jan 30, 2023
Jan 30, 2023
Tackling a category ripe for disruption.
The global market for spend management was valued at ~$16 billion in 2021, according to Grand View Research, a number that’s expected to grow 10% YoY over the next decade. Yet despite its size, spend management hasn’t experienced the innovation you’d expect from an industry that wants to help billions of people more effectively manage their expenses and help finance teams guide the growth of their companies.
What started out as companies using spreadsheets and ERP software to manage large line items on their financial statements evolved in the 90s to the spend management we know today. Employees were given more categories to spend on, like T&E, so finance teams needed a solution to manage smaller transactions that still gave them control, compliance, and back-office reporting. After that, innovation stalled.
Traditional spend management is broken.
That’s a problem, as the environment in which most businesses operate today has changed dramatically. Companies have had to adapt to survive and thrive during the pandemic and now economic volatility: transforming digitally and, in many cases, becoming global from day one. Distributed teams have very different expectations of how a company should show up for its employees — they want technology to work anywhere, be easy to use, and be mobile first.
Finance leaders have to manage this new and global complexity. Yet what I hear over and over when talking to customers is that today’s spend management is broken. CFOs struggle to apply outdated solutions to modern challenges:
- Company spend happens everywhere, globally. CFOs need a solution that offers a consistent experience for every employee from San Francisco to Stockholm to SĂŁo Paulo.
- Businesses need real-time, global visibility of their spend. Yet too many incumbent spend management solutions require clunky manual processes to reconcile data or grant approvals.
- Most spend management solutions are reactive, not proactive. That means a post-sale audit or workflow applies policies after the spend happens — not before, when it matters most.
- As companies grow, so does complexity. Managing this complexity takes time and resources away from employees and finance leaders that could be better spent growing the business.
Building the future of spend management with Empower.
Businesses want — and expect — their spend management solution to solve issues and drive outcomes. I joined Brex from Concur to help build a new and better future for spend management. One that addresses the struggles of CFOs and applies key lessons I’ve learned in this industry:
- Create proactive, intuitive, modern solutions
- Make compliance easy for employees by providing a better experience
- Strike the right balance with customer feedback
Create proactive, intuitive solutions for modern companies.
The pandemic has accelerated digital transformation and led to a more distributed workforce, unlocking even more categories of spend for employees, whether that’s offsites, learning and development, or work from home stipends. Companies need to be able to deploy spend at the right time and in the right way, more flexibly than before.
Brex’s vision for our Empower platform is not just to build another spend management tool. Our goal is to redefine the relationship employees and finance teams — all over the world — have with spending money:
- From reactive to proactive. Instead of chasing receipts and fruitlessly attempting to ensure that all spend is within policy after the fact, modern spend management software ensures that spend is within policy before it happens.
- From “command and control” to “delegate and empower.” With fewer controls and greater context, businesses can increase trust and transparency among their teams, especially between Finance and the rest of the organization.
- This will increase financial efficiency and discipline companywide, in any market condition. When spending isn’t hampered by overbearing controls or lack of trust, it can happen freely and quickly and, most importantly, within policy every time.
Having a proactive modern solution makes it easier to deploy capital strategically. Magic happens when you can empower employees to spend company funds simply and thoughtfully. Providing the right tools to manage budgets as easily as your music playlist allows employees to intuitively spend within policy around the world, and gives financial leaders real-time and global visibility into all of their spend at all times, from T&E to procurement.
Make compliance easy for employees.
A cornerstone of how we’re approaching spend management with Empower is through a concept called budgets. Budgets make it easy to allocate spend limits for every need — and keep everyone compliant, automatically. They can be assigned for a specific purpose like a trip, a project, or a stipend, and are automatically governed by a specific set of criteria. As simple as they sound, budgets are a new and profoundly innovative way to approach spend management, with compliance built in.
That said, when you introduce a concept with a broad range of applications and meanings — like a budget — you need to provide context and explain the benefit and reasoning behind it.
We realized we had to explain what budgets are, how they are different and better than other solutions, and how they could integrate with capabilities like virtual payments and reimbursements. We have taken the time to demonstrate how it all worked together to benefit everyone at the company – from the CFO to the finance team to every employee.
Doing so makes a huge difference. Our customers now tell us how they love the power of budgets and how they use them to enable all types of spend, all in policy, for anyone in the company.
“We started with just the card, and then we went to card and light budgeting. Now we are using nested budgets. We added flags for certain levels or kinds of spend. The team loves it.”
— Alexandr Wang, founder and CEO at Scale AI
Strike the right balance with customer feedback.
As our CPO Karan recently wrote, it’s easy for companies to fall into the “innovation trap.” When you build enterprise software, customers constantly ask for new features. This can result in innovation cycles that address the needs of niche users but make products more cumbersome for the vast majority of customers.
This doesn’t mean you should say no to everything. Customers always have the best ideas! It’s about striking the right balance of ensuring that you’re meeting the minimum requirements of all your customers while also being able to address the specific needs of larger groups of enterprises or startups.
Ultimately, you want to understand what customers value. It’s why we created Customer Advisory Boards (CABs) at Brex. For us, they provide tremendous insight and we get to define value together. For Empower, we learned that larger companies cared deeply about delegates, for example — especially enabling an assistant or other individual to prepare, submit, or approve spend on someone’s behalf. This creates value for companies as it speeds up time to allocate and approve funds. Thanks to the feedback of our CABs, we were able to build this functionality into Empower in a short period of time. When enterprise customers see that speed of innovation, they’re blown away.
Building category-defining products that customers love.
Ultimately, the future of spend management requires not only innovation but a new foundation that fixes spend management for good. One that is designed for distributed teams and is proactive, lets employees spend everywhere with a consistent experience, provides global visibility in real-time, and keeps complexity to a minimum.
With Empower, we are approaching spend management with the mindset of creating a new category, and we’re delivering that innovation at speed and scale. So far, our customers are loving it. We can’t wait to show you what’s next.
See what Brex can do for you.
Get in touch to learn how our spend solution can increase financial efficiency and speed for your company.