Emburse, a leader in travel and expense solutions, has launched its inaugural Tech Spend Index, offering insights into how mid-size to large organizations are allocating funds across major technology brands. Drawing from $30 billion in expenses processed for 6,300 companies and over 10.2 million employees, the report provides a deep dive into trends shaping technology and advertising spend amidst challenging economic conditions.

1. SaaS Spend Trends: Growth Amid Challenges

• Steady SaaS Investment: Despite declining SaaS revenue growth earlier in the year, spending rose by 7.7% in Q2 2024 compared to Q2 2023, highlighting the critical role of SaaS in business operations.
• Key Vendors:
  • Adobe, HubSpot, Salesforce, Shopify, and Zoom remain indispensable for collaboration and marketing.
  • Shopify saw a 43.1% increase, leading growth, followed by Monday.com (23.6%) and DocuSign (20.6%).
• Year-Over-Year Shift: SaaS spending accounted for 5% more of total expenses than the previous year.

2. Advertising Spend: Resilience Despite Economic Headwinds

• Overall Decline: Ad spending dropped by 6% in Q2 2024 compared to the prior year.
• Flat Allocation: As a percentage of total expenses, ad spend remained consistent, reflecting its strategic importance in business growth.
• Top Ad Platforms: Google, Meta, and LinkedIn dominate the ad spend landscape.

3. Rise of Generative AI Tools

• Explosive Growth: Spending on AI tools like OpenAI’s ChatGPT skyrocketed by 600% year-over-year, showcasing growing reliance on generative AI to enhance workflows.

4. The Impact of Decentralized Spend

• Out-of-Pocket Spending:
  • 20% of SaaS and 16% of ad expenses were reimbursed after employees initially paid out of pocket.
  • This indicates both employee reliance on these tools and the financial burden they bear.
• Challenges for Finance Teams:
  • Decentralized spend creates unplanned expenses, risking productivity and profitability.
  • Organizations must address these issues to improve financial control and compliance.

5. Strategies to Manage Decentralized Spending

• Expert Insight: Adriana Carpenter, CFO of Emburse, emphasizes the importance of visibility and control in decentralized spend management.
• Proposed Solutions:
  • AI, analytics, virtual cards, and automated workflows.
  • Pre-approved budgets and simplified processes to reduce employee burden and ensure compliance.

The Tech Spend Index underscores the importance of balancing innovation and expense control. While businesses continue investing in tools to drive growth, addressing decentralized spending is essential to enhance efficiency and maintain financial stability. Emburse remains committed to equipping organizations with solutions to streamline spend management while enhancing employee productivity and experience.