Recover Unclaimed Supplier Discounts and Rebates with ServiceNow Source-to-Pay
Organizations often focus on securing favorable contract terms with suppliers. However, without effective systems to track and enforce these agreements, significant savings opportunities — such as volume discounts and rebates — can go unclaimed. This post explains how companies recover unclaimed supplier discounts and rebates using ServiceNow and AI
ServiceNow Source-to-Pay (S2P) is a comprehensive solution that elevates the ServiceNow platform and drives out cost and overhead. Another way that Outcome Driven Solutions (ODS), enhances S2P is by helping organizations automate the recovery of unclaimed supplier discounts and rebates, leading to substantial financial benefits.
The Challenge: Unclaimed Supplier Discounts and Rebates
Large organizations typically allocate a significant portion of their budget to indirect spend, encompassing areas like IT services, facilities management, and office supplies. According to industry insights, indirect spend can constitute up to 20% of an organization’s total revenue. Inefficiencies in managing this spend can lead to 10–30% waste, equating to significant financial losses.
For an organization with $1 billion in annual revenue, this translates to approximately $200 million in indirect spend, with potential waste ranging from $20 million to $60 million annually.
The Solution: Leveraging ServiceNow Source-to-Pay
ServiceNow Source-to-Pay streamlines procurement by integrating contract management, supplier performance tracking, and financial workflows. Key features include:
Centralized Contract Repository: All supplier agreements are stored in a single, accessible location, facilitating compliance and audit readiness.
Automated Compliance Monitoring: Real-time tracking of contract terms ensures that volume thresholds and rebate conditions are met and acted upon.
Integrated Financial Workflows: Seamless connection between procurement and finance systems enables accurate invoice matching and payment processing.
By implementing ServiceNow S2P, organizations can proactively manage supplier agreements, reducing the risk of missed savings.
Enhancing Value with Outcome Driven Solutions
While ServiceNow S2P provides the foundational infrastructure, Outcome Driven Solutions offers specialized enhancements to maximize rebate and discount recovery:
Intelligent Clause Extraction: Automated identification of rebate and discount clauses within contracts ensures that savings opportunities are not overlooked.
Spend Milestone Alerts: Notifications are triggered when spend thresholds approach rebate eligibility, prompting timely action.
Supplier Communication Automation: Streamlined processes for notifying suppliers when rebate conditions are met, expediting the rebate process.
Comprehensive Reporting: Detailed analytics provide insights into recovered savings and areas for continuous improvement.
Case Study: How a Large Healthcare Organization Found Hidden Savings
A prominent healthcare provider with $1 billion in annual revenue faced challenges tracking and recovering supplier rebates across its extensive network. Given that indirect spend can account for up to 30% of a hospital’s total operating expenses, the organization recognized the potential for significant savings.
By implementing ServiceNow Source-to-Pay in conjunction with Outcome Driven Solutions, the organization achieved:
Are on track to recover $18 million within their first year
A 60% reduction in manual processing time, allowing staff to focus on strategic initiatives
Improved compliance with contractual terms, reducing audit risks
This case underscores the tangible benefits of integrating advanced procurement solutions in the healthcare sector, where efficient management of indirect spend is crucial for financial sustainability.
Conclusion
Unclaimed supplier discounts and rebates represent a significant opportunity for organizations to enhance their financial performance. By leveraging ServiceNow Source-to-Pay, implemented and optimized by Outcome Driven Solutions, organizations can automate procurement compliance, recover negotiated savings, and drive stronger financial outcomes.
