Making the case for off-the-shelf procurement software
- 12 Apr 2019
In any organisation with a sizeable IT function, making a case for software investment to help transform procurement and finance processes inevitably needs to address the question of whether to build that software in-house or to use a commercial off-the-shelf (COTS) system.
In either case, the outcome should be very much better than relying on a manual process or a system that is clearly no longer fit for purpose, but unless there are some very specific circumstances or unique business requirements then the case for COTS is generally overwhelming, as illustrated below:
This document will help procurement and finance professionals faced with this choice, especially where you might be under pressure from within the business to adopt a home-grown approach, to present the case for best-practice COTS software adoption.
The Special CaseSome enterprise applications are indeed so specific to your needs that building is genuinely the only option. This might be the case where you need an application for a bespoke function or business unit where it is very difficult to find experts outside of your own business, and where actually your internal resource actually delivers a far greater level of understanding and expertise than you can find elsewhere.
In all other cases - and especially where mature, highly developed software suites exist to enable application areas such as e-procurement - consider the following:
Deep domain expertise
In-house technical skills are one thing, but how well versed in procurement and finance processes and outcomes is your IT team? Technology across the source to pay lifecycle has evolved hugely in recent years, with vendors drawing on the expertise and experience that comes with working alongside many of the world’s leading procurement teams.
That expertise and knowledge goes into constantly refining and improving features, process enablement, time savings and usability, so that when you buy COTS software you are investing in an aggregate experience covering millions of man hours, driven by the feedback and input from procurement and finance professionals worldwide.
To quote the US politician Donald Rumsfeld, “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.” Developing in-house systems without the experience of a wider customer and user community to draw on means you are inevitably prey to the fact that you don’t know what you don’t know. The system will only ever be as good as the design document.
Until the end of the project when the system goes live and you get to use it you’ll never know what key features and functions you might have missed. And very often when it comes to in-house development, the end of a project is just that, the end of the project. Any future development, refinement, or improvement is subject to a whole new project procedure, with often limited appetite from the IT team to spec and deliver small work packages against a backdrop of other more compelling and business-critical work.
All Medius modules, on the other hand, are upgraded on a quarterly basis as standard and at no additional cost to customers. It’s a living solution, subject to constant improvement and extension informed by our customers and predicated on delivering the best possible outcomes for procurement and finance teams in businesses of all sizes and types.
Sometimes a compelling case can be made for building software when the open market for off-the-shelf products is highly limited, making it difficult to get a system that genuinely marries up with requirements or heightening the risk of price escalation (or even worse provider insolvency) when there is just a handful of vendors to choose between.
The procurement and supply chain software market does not fit either of those pictures. Solutions have been developed to offer exceptional functionality and flexibility at highly competitive market rates, across a wide range of local and international vendors, with detailed market analysis from major industry analysts such as Gartner to identify leaders.
Time to market
Even a well-run development team, with the clearest and most comprehensive specification and no competing demands on resource will inevitably run into delays when building an application outside their area of expertise. But what sort of IT team doesn’t have a packed schedule of other projects to run? Take very careful note of what major and minor projects are planned, make allowances for over-runs and unforeseen business-critical requirements, and identify genuinely how much resource is available to support the delivery of your project.
Best in class procurement software vendors have many years’ expertise in delivering both the software and the change management necessary to drive project success. At Medius our entire focus for over 15 years has been to develop and implement source to pay software – you can’t build that kind of experience and understanding any more quickly.
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