The latest procurement technology landscape report by Procurement Leaders shows that 59% of organizations could choose the best-of-breed approach for digital transformation of their procurement function by 2022. A system is called “best-of-breed” when it’s among the leading systems in its referenced category or niche. Whereas, a single suite is a large enterprise application that offers add-on modules to fulfill varying requirements but these modules are often not as extensive as a specialized system.
This report has further stirred up the endless debate of single suite vs best-of-breed, which has been a hot topic ever since enterprise suites came into the equation. But the debate might be close to a conclusion now.
Let’s try to understand both sides of the argument with an example – a large procurement department that already has a P2P system wants to improve its ability to track savings in the procurement pipeline.
One argument is that an add-on module of the existing P2P system will be tightly integrated with the platform, providing users with several important advantages like consistent user experience, simplicity in customer support, and a central view of operations.
Meanwhile, professionals in the best-of-breed camp say that these special solutions are leaps ahead in harnessing innovative technologies and will deliver evolving value on your investment. They are also much easier to implement and can be molded to unique business requirements. Whereas, P2P systems struggle to go beyond a single line. Do you also want to specify the risk level of suppliers and trigger additional workflows above a certain risk level or at user discretion? A piece of cake with niche solutions. But with your P2P suite? Not so much.
In 2022 and beyond
In theory, a single solution to the most pressing inefficiencies in an organization is a great scenario. Employees will love the affinity – if, somehow, you find an add-on module of a large suite that exactly mirrors (or at the least, is similar) to what you were or should be doing, the vendor plans to regularly upgrade it to meet evolving business needs, and it fits the ‘critical’ business requirement of the vendor to get prompt customer support. In other words, it might not really be possible or viable for any vendor to offer this without cutting corners.
In today’s business environment with increasing business complexity, an ineffective band-aid solution can actually hurt your business objectives in the long run. You must consider if you are trying to give a simple answer to a much more complex problem.
In the context of our example, can the solution also be tightly integrated with your organization’s Contract Lifecycle Management (CLM) system, which can then track your contract’s performance during its entire lifecycle? Or will the solution be agile enough to support your efforts to manage supply chain volatility?
Due to the increasing relevance of such specific requirements, especially post-COVID, best-of-breed is increasingly the preferred approach. These changing dynamics are further supported by technological advancements that have significantly mitigated the challenge of integration with the evolution of data standards and open systems architecture.
Things to keep in mind
While the difference between both approaches has narrowed considerably, there are still two things you need to thoroughly evaluate to ensure the system that seems to fit your needs today actually fits your needs in the long term.
- Process integration, not just data integration To be clear, if a special-purpose solution doesn’t offer integration with other business applications at all, it hasn’t really earned the best-of-breed status. The evaluation criteria should now look at “how well” it integrates with other applications.
- Alignment with vendor’s future roadmap The technology often gets a lot of attention in the best-of-breed approach. You ensure it fits well in your organization’s processes, test integrations, features, and change management feasibility. But a commonly overlooked aspect is the evaluation of vendor’s future plans. Do they see the future path of development the same way you do? Are they ready to evolve to support your function’s changing needs? Asking such questions can turn a good investment right now into a future-proof investment that delivers increasing value over the years.
Ask the vendor to demonstrate what the integration would look like and whether the solution will integrate at the application level. Actions taken in one application should automatically be updated in different locations and applications so your employees can have real-time access to the same information.
The other aspect is data integration, which is widely offered by vendors now, but you still need to ensure that the vendor is able to eliminate redundancies and ensure data quality.
ABOUT THE AUTHORS
Amit Garg is the Founder and Principal Architect of smartContract – an Enterprise Contract Lifecycle Management Solution that applies the latest Legal Tech to open up enticing possibilities for companies to get maximum value from their contracts. Amit is a serial entrepreneur and with a deep passion for innovation has spearheaded multiple successful enterprise products that solve the most complex business problems and streamline the processes with a focus on productivity and unparalleled visibility.
Velkumar Bahulayan is a distinguished procurement leader with over 30 years of experience leading large procurement functions, predominantly in the IT and ITes space. His experience spans across prestigious global organizations with excellence of leading several transformation projects, administration and launches.