Managing costs throughout the enterprise requires controls, but as with any initiative, these controls become more effective as they become adopted throughout an organization. Enter spend management, the discipline of squeezing the most out of each procurement dollar throughout the enterprise. Once a somewhat mysterious element in a financial department's bag of tricks, spend management has increasingly become integral to other areas in the enterprise, from operations to marketing and product development.

Ariba Inc. (NASDAQ: ARBA) is one of the pioneers of spend management — and over the last 10 years, the Sunnyvale, California, company has tirelessly advocated its use as a key component in nearly any business decision. Sun recently spoke to Christine Crandell, Ariba vice president of marketing, about how spend management can increase competitiveness for companies of all sizes in the global marketplace — and how Sun is helping Ariba develop these offerings.

Q: How does Ariba define spend management?

Crandell: Spend management is how you maximize the return on investment (ROI) from every dollar a company spends. We think of spend management as a journey — and every company is at a different stage in the voyage. Typically, companies start out trying to control their rate of spend — looking for cost savings in procurement or making sure processes are in place for purchasing — and then wind up using spend management as a major contributor to the overall corporate strategy. With the right strategy and solutions in place, companies can do more than just identify savings. They can make sure these savings make their way to the bottom line and improve profits, reduce supply risk, and gain competitive advantage.