August 01, 2017

Best-of-Choice Solutions for Procurement

The debate between a best-of-breed versus an integrated solution has been going on for quite a while in all aspects of business operations, including procurement. In early days, procurement users faced a choice between stand-alone systems that specialized in a single area of procurement or an integrated system that offered functionality for each area but was often limited in capability and complexity.

Adopters of best-of-breed solutions were happy that they were able to have a robust system that addressed specific needs and pain points (such as spend analysis or sourcing optimization), and often experienced easier implementations and more feature-rich options than offered by the alternative. Meanwhile, integrated suite adopters enjoyed having everything within one single system without having to integrate outside applications.

These differences still exist today, but the technology industry has evolved to a point where it can offer the best of both world, where procurement users now have the best-of-choice. Different from an integrated suite, best-of-choice refers to fully integrated platforms that offers best-of-breed modules with built-in rich functionality within a single shared repository. This allows the procurement function to have end-to-end procurement automation combined with comprehensive dashboards that serve both strategic needs and operational processes.

Best-of-choice procurement solutions include:

  • Spend analysis
  • Contract management
  • Sourcing
  • Supplier value management
  • Procurement
  • Invoicing

Additionally, these platform’s model should allow it to be engrained into the business so that it can deliver more value for the organization. According to Spend Matters, truly effective procurement technology must be:

  • Workflow-driven: have a configurable workflow that can be customized to each type of spend done by the firm and adaptable to the products or services that the firm is purchasing.
  • Process-oriented: support the spend categories and accompanying processes
  • Open by design: built on open standards that allows the system to connect with other key systems
  • Easily extensible: able to seamlessly integrate with new modules and functionality to fully support existing processes and add new ones as spend categories are added or modified.

Ultimately, best-of-choice solutions should be open and flexible solutions, which are modular and scalable with fully defined integration points and that solve end-to-end procurement challenges.