Five easy pieces

From the June 2022 print edition

Extensive disruption at the beginning of the decade put resilience at the top of the agenda for most organizations. Now, more attention than ever is being placed on how digital procurement solutions can be used to boost agility.

But as digital transformation accelerates and procurement teams look beyond their established P2P or S2P suites to address pain points, this shouldn’t be done in a haphazard way. To be successful, organizations need a plan as to how new software is identified, selected and implemented.

When adopting best-of-breed technologies, what should procurement consider? The following are five key factors.

Stop comparing best-of-breed versus single suite
One of the greatest advantages of developing a best-of-breed stack is that organizations can benefit from vendor expertise in a particular area. With best-of-breed you are accessing this specialist knowledge. This means that specific issues can be addressed more rapidly and with greater success, which translates into better user experience and adoption.

Large P2P suites, on the other hand, can feel disconnected from the day-to-day reality of users because they are often restricted to a core set of use cases that apply to the broadest range of companies. Of course, compared to an individual best-of-breed vendor, the suites have considerably more capacity to invest and innovate. However, when taking the best-of-breed ecosystem, the combination of expertise, agility and resources makes this option compelling for many use cases.

This is not to suggest that suites no longer have their place. They address core procurement functionality for many organizations exceptionally well and are ‘best-of-breed’ for several scenarios. It’s not a question, therefore, of one or the other, but rather how to identify and select the best solution today, while maintaining flexibility to adapt to tomorrow’s challenges.

Know the benefits of an environment that enables specialist solutions
A best-of-breed enabled environment means that organizations can plug-and-play different solutions into large suites or other platforms that are provided by experts in their respective fields. They can empower users to self-serve even complex changes to forms, to adapt workflows or manage integrations, while providing an accelerated time-to-value and a superior experience for suppliers.

The best-of-breed approach yields many other advantages. For instance, it enables focused investment in solutions that address specific requirements. The approach offers depth and scale of knowledge. Because each best-of-breed provider tends to solve a relatively narrow set of business challenges, they have significant in-depth experience in their area.

The approach also supports agility, because it’s far easier to make changes to the overall technology landscape if an enterprise is not locked into one vendor. Incidentally, the combination of these advantages results in new solutions brought to market more rapidly, which enables access to innovation.

Make planning a priority
The Procurement Technology Landscape 2021 by Procurement Leaders reports that 59 per cent of procurement functions are targeting a best-of-breed approach to technology this year. But while best-of-breed adoption is accelerating, experts warn that randomly buying multiple software is not a strategy. Be mindful not to get carried away with new solutions that address specific pain points in an elegant and user-friendly way.

There’s a tendency when implementing a suite to adopt the standard workflow and practices that the suite best supports. This can be fine if it meets your requirements. However, while a best-of-breed strategy requires more upfront planning to decide how to assemble the various components to work together, this additional prep results in a much richer and deeper solution that more closely meets individual business goals.

Organizations that incorporate best-of-breed into the environment in a planned manner can realize the full benefits of the approach. To be efficient and profitable in the long run, it’s important to be explicit about what the organization requires and select software accordingly, in a deliberate manner.

Put data at the heart of your strategy
Having a plan in place also helps to prevent data silos from occurring, which need to be avoided. Underpinning any procurement process is robust data that’s accessible across different services and platforms. It’s key to have the right centralized platform configuration to enable a best-of-breed landscape.
The route to achieving good quality data is a single-entry point for information. It is much simpler to funnel data through one entry point down into different systems rather than creating multiple systems, then struggle to bring it all together. This helps to provide a single source of truth for supplier data, making procurement operations easier and more efficient.

The result is visibility, which otherwise wouldn’t be possible, and a foundation from which digital initiatives or automation can be run. To further avoid creating silos, data should ideally be consolidated, integrated and governed across systems.

Future-proof your approach
Something else to account for in a best-of-breed landscape is adaptability. With the best will in the world, no business can predict what their data needs will be in 10 years. The environment should remain as useful in a decade as it is on day one. It’s worthwhile building a supplier data model that can evolve as new systems and use cases are introduced over time.

It’s also good to consider user experience in the landscape design – both from the perspective of internal teams and in particular the supplier. For example, avoid having multiple systems, each with their own accounts and credentials, to support a more positive supplier experience.

Encouragingly, large mature organizations with complex requirements across source-to-pay have initially been driving the trend towards best-of-breed alternatives. As procurement moves forward, the potential for digitization is significant. With good planning, best-of-breed provides organizations with the best mechanism to support digital transformation and future-proof themselves.

As organizations work to build supply chain resilience through best-of-breed, procurement should consider the value of big suites, specialist solutions, strategic planning and centralized data management – while adopting a forward-looking mindset.

Costas Xyloyiannis
is co-founder and CEO
of HICX, a supplier experience management solution.