With the demands on procurement becoming ever more urgent, CPOs in nearly all industries are coming around to the value of going digital.
5 Procurement Software Myths... and Truths
There’s an old saying, “never mind the width, feel the quality!”
In today’s technology market, that translates as “don’t concern yourself with whether you can use this thing, look at all the clever stuff it can do!”
Procurement software is no different in that so much emphasis is placed on feature, feature, feature by developers and traditionally-minded commentators and buyers alike that there is a danger of missing the point that this tech is supposed to be used - often and regularly – to drive savings and value. Not to show how clever the user is to figure out how to do something highly esoteric and ultimately pointless.
The feature and function arms race, driven by this lack of appreciation of what B2B software is “for” has led to a “me too” mentality amongst software vendors.
Today, there are a lot of messages that all procurement software vendors convey, and so often that regularly prospective clients are heard to say, “well, everyone says that.”
Suppliers have a tendency to promote the good stuff and divert attention from the challenges associated with their products, and so the desire to jump on the bandwagon is understandable.
But recently it’s become clear that not all stories that sound the same are actually representing the same underlying facts. So here are some myths (some stories) that all vendors will tell you.
1) All procurement software vendors are offering a cloud solution
This is false. For the sake of brevity we’ll divert you elsewhere for the detailed discussion, but the fact is that software-as-a-service, offered by other software vendors is not Cloud. Cloud procurement software -offered as far as we can tell exclusively in the form SMART by GEP - is not SaaS. It’s Cloud-native. The difference is immeasurable, the benefits of cloud over SaaS are astonishing. Don’t be misled. It may look like a cloud, but if it’s really a SaaS then it ain’t cloud!
2) All procurement software vendors offer a unified platform for source to pay
This is also false. Do not make the mistake of confusing a unified platform with a suite of modules. If the various pieces of software that comprise a suite were written separately, at different times and designed to be standalone first and foremost, then bundling them together might make commercial sense for the vendor, but it doesn’t constitute a fully interoperable solution for the buyer. Only if the functions you need have been built on the same underlying “engine” should you expect your sourcing application to talk to your contract application, to talk to your purchasing application and so on. Think of it this way, you used to have a phone, a camera, a computer, a games console, a TV, a personal hifi and a note book. Today, you have a tablet. One of them is a suite of modules, the other is a unified solution.
3) All procurement software vendors are offering a mobile solution
Well, this isn’t exactly true either. Being able to use a browser on a smartphone is not a mobile solution. Today, what procurement professionals need is access to the right functionality, at the right time, on the most appropriate device; and that is not just being able to use a browser in a café. Today, a mobile strategy that works for the procurement pro must include a portfolio of apps and applets that all form a procurement ecosystem. So, an approvals app for rapid and precise approval and rejection of orders, invoices and the like is a far better use for a smartphone than examining performance data and spend trends. That’s where the tablet apps should come in. And nobody is going to draft a 100 clause contract on a glass screen, so the plug-in that invisibly integrates Word with the procurement system is what is needed here. Mobile computing is a huge enabler for procurement, if it’s done right.
4) All procurement software vendors offer the same stuff; Spend analytics is spend analytics, whoever does it.
This is just about as big a myth as one can get. Now, granted, a sourcing application should let you run an RFP process, and if it doesn’t then it’s not a sourcing application. And you can argue that which is better to use can be a matter of personal preference. But, when it comes to the critical elements – like spend analysis – then there really is a huge disparity between those who claim to offer a spend analysis solution and those offerings that really deserve the title: solution. After all, spend analysis is not reporting and graphs. OK, it IS, I’ll admit, but only if the data you’re reporting on is to be trusted, is accurate, is categorised the way you want and actually represents the truth of what you’re spending, where and with which suppliers. The reporting part of spend analysis is only the end of a long chain of processes, often unseen by the procurement professional that transform your chaotic, messed up, incomplete and poorly formatted data from a multiplicity of sources into a single source that you can query with confidence. If your vendor can’t offer you this complete service, rendered to a taxonomy that works for you, regardless of the type, location, language and format of your data sources, then you’re not being offered a spend analysis solution.
5) Despite what procurement software vendors tell you “upstream” and “downstream” are fundamentally different, and it makes sense to get “best-of-breed” for each.
Nonsense. It is true, no doubt, that there are different groups of users at work upstream and downstream. Upstream we have the sourcing and procurement professionals who look for opportunities, negotiate with suppliers, execute contracts and spend their time create the vehicles for savings that need to be driven by the business to reach ROI. Upstream, they are responsible for Source to Contract. Downstream we have purchase requestors and accounts payable folks, and everyone in between who just need an easy and straightforward means to order what they need, when they need it. They deal with Purchase to Payment. But, here’s the thing. It is the Downstream people who have to drive the vehicle for savings in order to realise the promise that the Upstream guys sweated to deliver. Enforcing a disconnect between source-to-contract and purchase-to-payment puts an unnecessary firewall between the contract and the purchase. How do you handle compliance, utilisation, performance and control maverick buying when, fundamentally, the procurement people and the buying bods are working in different systems? Yes, different groups of users need different user experiences and different feature sets, but that doesn’t mean, and shouldn’t mean that different applications from different vendors is anything like a good idea.
But then we would say all that – what with our being the only cloud-native, unified source-to-pay vendor who offers the most comprehensive spend management solution that has a real mobile strategy.