E-Sourcing Provider Selection: ERP vs. Best-of-Breed Recommendations

Given the importance of taking a use-case approach to evaluating sourcing technologies based on individual organizational requirements, maturity and characteristics, we suggest procurement organizations to avoid jumping to any permanent conclusions based on the cursory analysis in this paper, whether or not a particular ERP sourcing solution is a better fit than a best-of-breed toolset. There are certainly arguments to make for both solution types – and even for deploying more advanced sourcing capabilities alongside an ERP-centric sourcing deployment.

However, there are still key takeaways that are worth considering in the context of this incomplete look beyond the ERP sourcing “fits” we have explored. In general, organizations that have the following demographics and characteristics are likely a better fit with a best-of-breed path separate from (or in conjunction with) ERP sourcing tools:

  • Sophisticated sourcing capabilities with developed category management practices that seek to solicit more creative ideas and responses from suppliers
  • A procurement structure that favors (or follows) moving to a cross-organizational center of excellence model
  • Engaging procurement in the consistent (rather than one-off) sourcing of complex services categories, with an emphasis placed on implemented value
  • Viewing supplier engagement and collaboration as front and center to competitive advantage (rather than an overt focus on negotiation and sourcing cost reduction)
  • A developed and robust approach to commodity management as part of a procurement and/or trading function (integrated with procurement)

 

To read the full list of demographic and related characteristics, please download the complete analysis today: Evaluating the Capabilities of ERP Providers Compared to Independent Vendors – Know Your Size Before Trying on the Suit (available for free in the Spend Matters Research library).

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