I had a quick call the other day with a procurement executive at a large company you’d probably recognize who asked me a question which I’m hearing more and more of these days. And that’s: what is the best course of action to take given a short-term solution need — in this particular case, it was contract management — but an IT-driven emphasis over the long haul on standardizing on their ERP providers procurement capabilities. In this case — as in many — the ERP provider in question had an inadequate answer with their current solution (despite their positioning).
I tossed out a few names including the usual contract management suspects to consider including Upside, Nextance, Procuri, Ariba, Emptoris, and even Iasta (with their new capability), but suggested that the solution he would chose might end up being a long-term one after all. And that’s because there’s a good chance that ERP will not catch up to the level they require, and even if they eventually did, why would you want to rip out a solution that was faster, better, and cheaper — not to mention completely separate from ERP in focus?
Seriously, I’ve had enough of companies wanting to standardize all buy-side technology on ERP because IT thinks it’s the easy thing to do. Sure, HR is a logical extension of payables. But Spend Management is not (because it touches so many points outside the enterprise, in addition to the system of record).
Going forward, in an ideal world where bloggers like me get their way, ERP will need to compete on its own merits in sourcing and procurement, rather than simply delivering a 60% (or 80%) solution that’s just good enough (good enough for whom, should be the question to ask). In my view, this level of achievement might be good enough for transaction processing. But it’s not when it comes to driving value through better sourcing and procurement where domain expertise, solution depth, and category knowledge are all critical to drive results.