Best-of-Breed is good, often very good, but does have its disadvantages if you carry it to the extreme. Depending on your needs, an end-to-end e-Sourcing Suite with competitive functionality, particularly if its on-demand, from one provider might be significantly more advantageous to you than a best-of-breed spend analysis tool from vendor A, e-RFx and e-Auction tool from vendor B, decision optimization tool from vendor C, and contract management tool from vendor D. And the reasons for this go well beyond the initial cost savings of not having to develop and integrate custom integration solutions between four different vendor applications in addition to their integration with your back-end ERP and accounting systems or the efficiency gains from not having to load up four different applications to review the history of an event.
The real benefits become clear when you start implementing Next Generation sourcing strategies. In particular, end-to-end platforms present significant advantages to those organizations that are adopting center-led procurement organizations, taking advantage of guided sourcing, focusing on the transaction, adhering to the mantra of Do Less, Not More, and implementing hybrid sourcing strategies.
In center led procurement, a procurement center of excellence (COE) focuses on corporate supply chain strategies and strategic commodities, best practices, and knowledge sharing while leaving individual buys and tactical execution to the individual business units. Furthermore, in a center-of-excellence, a sourcing professional is responsible for education and training, benchmarking, and best practices. It should be clear that it is much easier to benchmark a process that can be completed on one platform vs. one that can be completed on many, tailor a best practice implementation to a single platform, and train and support users on one platform.
With guided sourcing, the sourcing professional uses the best tools that technology has to offer, deep analytics and optimization, and dashboards and monitors her sourcing projects through a centralized dashboard that provides a deep command-and-control view into the most critical supply performance information. Generally speaking, most dashboards plug into a specific solution and the only way you’re going to get a dashboard with this capability that can cut across multiple solutions from multiple vendors is to undertake a long, costly, custom development project – which will have to be maintained and updated any time any single vendor updates their offering. Thus, the best guided sourcing has to offer is not only easier, but sometimes only possible, in an end-to-end suite from a single vendor.
An organization with a transactional focus likes to follow the transaction from beginning to end, review the transaction when it is complete, and know, at any given time, where it is. With a slew of tools, it is sometimes difficult to know the status of any given transaction without checking all of the tools. With an end-to-end suite, it’s often just a matter of checking the dashboard.
In order to Do Less, Not More, you have to do as little as possible, as efficiently as possible, and get the maximum results possible. This is obviously simpler in one platform, which can automate as much of the process as possible.
In hybrid sourcing, an organization is blending sourcing technologies with third-party supply market and sourcing intelligence and making use of third party business process outsource solutions for parts of their supply and spend management function, when appropriate. A single platform makes a single integration point and, more importantly, if the platform is on-demand both the internal team and outsourcing service provider can share the same platform, giving the organization 100% visibility into all of its sourcing, and not just the sourcing it chooses to do in house.
Of course, this all hinges on the end-to-end platform being competitive with other offerings. Although it is true that not a single component has to be as good as the best of breed alternatives, each component has to at least meet the majority of the organization’s needs. Exceptions should be rare, and not the norm.