Automated spend management promises hope for public sector spending woes

The need to curb overspending, under-spending and "fruitless spending" in the public sector is leading more and more state agencies to implement automated spend management solutions, according to Anton Carstens, Managing Director of ADM Systems.

"Legislative reforms over the past years have made government departments, municipalities, public enterprises and parastatals much more accountable for their spending," says Carstens.

"One of the biggest risks is that individuals in senior positions can now be held personally liable for any fruitless expenditure incurred by their staff, so there is a huge incentive to get proper controls in place."

When controls are still paper-based, however, the processes can become strangled in red tape. The prescribed legal framework for supply chain management in the public sector is complex, says Carstens: "It's almost impossible to be fully-compliant without proper management tools and integrated procedures. Although policies are in place, it becomes increasingly difficult to manage all the information, documentation and procedures."

"We're seeing cases where the process has become so cumbersome you end up with under-spending, which leads to improper service delivery, which is just as damaging," confirms Stanton Jandrell of Fraxion Spend Management.

The solution, say Jandrell and Carstens, is automated spend management software that enforces compliance with all the relevant laws, regulations and organisational policies while eliminating paper processes.

"Many government departments and parastatals now have enterprise resource planning (ERP) and financial management software in place," says Carstens, "but the large ERP systems don't typically extend into the parts of the organisation where spending decisions happen. What is needed is specialist spend management software that sits on top of, and enhances, these existing ERP systems, and enables the organisation to leverage that investment so all spending is tightly-controlled."

Ease of use is equally important, says Carstens: "In 12 years' experience within the public sector, we've seen that it's not always so easy just to implement a new IT system in the hope that it will solve a particular requirement. If people are not properly skilled to use the system you've implemented, the initial requirements, goals and objectives may not be achieved, resulting in money being wasted. Organisations need solutions that are easy to operate for anybody in the organisation with basic computer skills."

Carstens says ADM's choice of Fraxion Spend Management was based mainly on its ability to easily integrate with most ERP/financial management systems, including custom-built systems. "It sits on top of almost everything, it's Web-based and easily deployable, and its ease of use means it will actually get used.

"That's the only way to get public sector organisations fully-compliant with all legislation while actually getting the job done."