Say Goodbye to Closed Systems with New Purchasing

Spend Matters welcomes this guest article by Vroozi.

As Spend Matters and Vroozi wrote in their jointly produced research paper Declaration of the New Purchasing: A Buying Manifesto:

Article 9: Closed systems – by design or by technology limitation – will fade and user choice will facilitate an accelerated natural selection away from proprietary applications and networks and those that simply fail to interoperate.

Closed system environments will turn users off by limiting choice. Much as Yahoo failed to become the online e-commerce portal – not to mention search tool – of choice because of its proprietary systems, Amazon succeeded because of its open architecture that allowed all participants (tech users, suppliers, distributors, customers, internal Amazon businesses, etc.) to “plug in” via open and published standards. Ultimately, businesses will “see through” falsified open models such as the Ariba supplier network that may leverage open connectivity standards but has a business model that creates a closed, proprietary environment.

When an enterprise makes an investment in something – be it a product, service, business process or even an employee – they likely won’t be too eager to see that investment go to waste. Investing time or (especially) monetary resources into something is enough of a reason for organizations to do all they can to see that investment through for as long as they originally intended.

Letting systems investments fall by the wayside because of advancements in technology is the reality of the modern business world, but it doesn’t make it any easier for a lot of organizations to deal with. Even for those enterprises that are by no means strapped for cash, the competitive nature of the business just adds to the investment of resources as reasons that old, outdated equipment often lives on for longer than it should be afforded to do so.

But, what if we told you that the ease of upgrading your antiquated solutions through interoperability with modern technology will continue to get easier? That’s what we’ve declared to be the case in the “New Purchasing” environment.

In the old days of the enterprise solution, companies ranging from small to midsize to those in the Fortune 500 were faced with the impasse of either overhauling their business processes or heavily reinvesting in their legacy systems to upgrade and customize the solution for which they’ve already sunk massive resources into purchasing, maintaining, and training employees to utilize.

For procurement departments, in order to use the ERP system they’ve spent millions of dollars on, enterprises will need to customize their legacy systems to allow for an interoperability to take place. That’s what we called “best of breed.” However, with the proliferation of cloud offerings and the advancements in cloud security, companies now have an easier time finding a solution that fits exactly what they need to accomplish for a specific function. Now, all they need to do is leverage open APIs to connect new cloud solutions with their existing ERP investments.

Closed systems will continue to fade. Using open APIs to connect with another solution solves a specific problem for many an enterprise. For leveraging procurement technology, the only task now becomes finding the best ingredients to create your own perfect salad – rather than ordering that salad off of someone else’s predetermined menu.

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