Living by our own ethos: How Ramp saved time and money with procurement

As the finance lead for procurement at Ramp, I spent much of last year working with folks across the company to improve how our team of 600+ employees purchased resources for work. The organization was growing fast and our procurement process wasn't keeping up: we were overpaying for software, approvals were taking too long, and it was hard to track our committed spend. As a company dedicated to helping businesses save time and money, we knew we could do better. 

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With the help of Ramp Procurement, we overhauled our entire procure-to-pay experience. Since soft-launching our new system last September, we’ve saved over 6 hours of review per month and $350k in vendor spend. In this article, I’ll dive into what we did and learned along the way.

Step 1: Diagnose the pain 

Previously, we used a Slack workflow to gather requests and ping approvers. Approvers would then follow up with employees to get additional information that they needed. Upon approval, Finance would issue employees a Ramp card and/or a PO. As the final step, employees would update a giant spreadsheet that served as the source of truth for active vendors at Ramp. 

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On the surface, this seems pretty straightforward. But over time, we noticed major cracks in our workflow:

• Employees couldn’t remember the process—and some didn’t even know we had one. Contracts were coming in from all corners: Slack, email, Ironclad, Google Docs, etc. 
• Even if people remembered the process, they followed it poorly. Missing information in requests led to approval delays and suboptimal contract terms. Our vendor spreadsheet was constantly outdated.
• Approvers worked in multiple tools that didn’t talk to one another. They didn’t know when it was their turn to take the next step. Employees didn’t know the status of their request. 
• Accounting spent a lot of time chasing mysterious invoices that didn’t match any open purchase orders (POs).

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With these pain points in mind, we set out to design a better system. 

Step 2: Align on requirements across teams 

We started by mapping out what different teams—Finance, Legal, Security, IT, etc.—needed to vet vendors.

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From our historical data, we saw that our employee requests mostly fell into four buckets: contractors, professional services, software/SaaS, and digital assets (e.g. domains, fonts, etc.). For each request type, we asked ourselves:

• What business context do we need?
• What’s our overall risk tolerance? 
• How do we ensure the request is within budget? 
• Who needs to approve or be notified? At which spending thresholds?  
• Is a security review needed? How should we vet vendors who get PII or sensitive information? 
• What kind of contract paperwork do we need? Can we use a standard agreement to expedite review?
• What do we need to see in the master service agreement (MSA), data protection agreement (DPA), or terms of service (TOS)? 
• What additional documentation do we need to verify intellectual property rights?
• For software/SaaS requests, how do we ensure tools integrate with our existing stack? How are users going to access the tool and how will licenses be provisioned? 

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If you are revamping your procurement, I strongly recommend you do a similar exercise with your team to standardize how you mitigate vendor risk for different request types. You’ll want to balance your ability to enable employees while keeping your organization safe. Sending out a form with, say, 50 security questions when a vendor has a SOC 2 may create more friction than real security value. Vendor requirements will differ from company to company, based on your risk tolerance and available team resources. 

Step 3: Create one place to go for employees to request spend and submit vendor information 

Once we had a firm understanding of what approvers needed, we were ready to revamp our intake process. 

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First, we consolidated the number of places people had to go for approval. Despite a detailed wiki page and regular reminders, very few people followed our Slack process. However, people were great about using Ramp to request budget for their everyday needs, like T&E and SaaS. 

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With the help of our product team, we migrated our Slack workflow to Ramp, and now Ramp takes care of prompting employees to submit vendor details when they request certain types of spend. With procurement requirements embedded into their spend request workflow, employees are finding it much easier to stay compliant.

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Step 4: Create custom intake forms and approval workflows 

Next, we optimized our intake forms and approval chains to minimize the back-and-forth between approvers and requestors. We use Ramp’s conditional questions to keep forms efficient and collect just what approvers need—no more, no less. For example, if someone indicates they need more software seats, Ramp asks them for a seat order form. If they are renewing an existing software vendor, Ramp prompts them to upload the previous contract.  

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With Ramp automatically routing requests for approval, we can now be confident that all requests are being properly vetted. I can be sure that our negotiations team is reviewing requests with an annual contract value of $100k or more, to prevent overspending. Legal can be certain that Finance and business owners have reviewed payment terms. Security can rest easy knowing all new vendors underwent security reviews. If approvers get added mid-stream, they can see past comments to quickly get up to speed.

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I estimate we’ve saved over $350k in the last four months alone through more consistent negotiations of larger contracts, supported by our new intake system. This intake system works so well that it is now available to everyone using Ramp Plus, through Ramp Procurement. 

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Step 5: Integrate with your contract management tool 

Legal and infoSec review is notoriously difficult to handle because of the risk and tools involved. At Ramp, we use Ironclad for contract management. In the past, employees had to create separate Ironclad and Slack requests to get all the necessary sign-offs. This required them to submit duplicate paperwork and track approvals in multiple places.

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Ramp Procurement integrates with Ironclad so it automatically triggers Ironclad workflows when requests are created. Contracts and comments get synced bi-directionally so approvers in Ironclad receive information automatically. Once the Ironclad workflow is completed, the executed Ironclad record is pulled and stored directly in Ramp. 

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Our Head of CyberRisk Paul Yoo estimates his team is saving 10+ minutes per request, while our Senior Counsel Oliver Reimers notes that the number of contracts with approval issues has decreased significantly.

Step 6: Set up automatic PO notifications for Accounting 

The final piece we tackled was how PO information got to Accounting. Our Accounting team was spending too much time every month chasing vendors and employees about delayed invoices. 

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Now, Accounting gets notified automatically when POs are created in Ramp. They can ensure all incurred expenses are reflected in the appropriate accounting period, even if the invoice hasn't been received. POs sync to our ERP (NetSuite) where a record is auto-created. They dynamically update as invoices are matched and paid, so the team always knows how much ‌remains on contracts.   

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Step 7: Roll out the new process

Our old system taught us an important lesson: great procurement starts with your employees. As the final step to our overhaul, we created a thorough rollout plan to help the whole company learn about the new process. We developed all-hands communication, internal documentation, new hire training, manager training, Slack announcements_, and more. 

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At each stage of the rollout, we made sure to not only emphasize what was changing, but also why: As a growing company, we need to strengthen our controls—financially, legally, and from a security perspective. This responsibility doesn’t just fall on the shoulders of people involved in procurement. Rather, everyone—from new hires to the most tenured employees—is responsible for ensuring good use of company resources. 

Avoid surprise spending and shadow IT in 2024

At Ramp, we’re constantly looking for ways to live out our mission of saving time and money—starting with our own processes. As the company grew, our procurement operations had to evolve to help us stay efficient and keep spending under control. If you’re having trouble controlling vendors and committed spend, it’s probably time for you to revisit your procurement too. 

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Ramp Procurement was instrumental in streamlining purchasing for our hundreds of employees. See if Ramp Procurement is right for you - check out our demo here. 

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Thanks to Oliver Reimers, John Yang, and Paul Yoo for their insights.