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5 questions on finding your ‘best fit’ digital procurement technology, featuring analyst Magnus Bergfors

This sponsored Viewpoint article has been provided by Basware
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Magnus Bergfors, Spend Matters Lead Analyst

Spend Matters note: Because of the coronavirus outbreak, Basware’s conference in Europe was canceled and Spend Matters’ Magnus Bergfors was not able to speak there. So this interview is being shared here.

Basware sat down with Magnus Bergfors, VP of European Research and Lead Analyst at Spend Matters, to hear his take on the selection, adoption and integration of digital procurement solutions. Read more to learn how your organization can best determine the need for procurement technology, how to select the right technology vendor and how to choose between end-to-end and specialist digital procurement solutions.

1. How do you determine the need for an increase in procurement technology?

There are a lot of different ways your organization can determine if it’s time to consider an increase in procurement technology. But, at the core of your planning, it really depends on your business needs and strategic roadmap. When considering procurement technology, it’s important to determine exactly what you’re trying to achieve with the technology itself.

Ask yourself a few questions:

  • Why are you considering procurement technology?
  • Do you need to free up resources? If so, which ones?
  • Are there specific areas where it’s most important to implement these technologies?

Determining your organization’s procurement technology needs is all about asking as many “whys” as you need to chisel away at your most vital business objective.

It’s crucial to note that a blanket approach to your digitalization campaign won’t cut it.  In other words, it’s unrealistic to insist that your organization digitalizes all of procurement with an end-to-end approach on a tight, rigid timeline. It's just not realistic. Sure, it’s exciting to think of all the benefits of digital procurement and to want to jump the gun on getting the technology installed as quickly as possible. But there are benefits in the slower approach.

One benefit is having a much higher chance of success. Digitalizing an entire process and department is a big undertaking that should not be taken for granted. Yes, the benefits are very appealing, but your organization must be prepared to not only support the adoption of the technology, but also support the processes and the skills of the users who will actually be using the technology. You can’t simply throw a procurement solution in the mix and hope that it gains success on its own. It takes support, planning, training and the right mind set from all stakeholders and users to achieve the highest levels of success.

2. What’s the best way for a company to decide on the right vendor for them?

Deciding on the right vendor boils down to having identified your critical use cases and determining what it is that you're trying to achieve. Then, it's a matter of going out to scan the market to find vendors that can help you achieve these results.

Though it might seem overwhelming, have no fear; there are a lot of resources out there, including those provided by Spend Matters, to help you identify the best-fit vendor for your requirements.

During your vendor selection process, your organization should identify your "must haves" and your "want to haves" when it comes to what a vendor can provide. It’s important to note that there is a difference between these two categories. Your “must haves” are what relate to your core business objectives and your “want to haves” are those features that would help but aren’t immediate to your business plan.

And finally, when deciding on the right vendor, try to focus on value rather than cost. This can be a hard pitch to throw to your procurement and finance teams, but the value of a perfect-fit digital procurement solution will save you time, energy and therefore costs in the long run.

3. Specialist versus end-to-end source-to-pay suites — what’s the best approach?

An end-to-end source-to-pay suite often seems more appealing than a specialist solution at first glance. And there are advantages to it — there’s no doubting that. The most practical one is from an IT management perspective. Your business will have fewer solutions to deal with and fewer integration points with an end-to-end approach. Second is that you get a similar look and logic across multiple solutions, making it easier to use. The third advantage is in the analytics where you can have data from multiple modules succinctly located in one place.

However, there are many practical issues, too, when looking at end-to-end solutions. One being that your organization sacrifices specific functionalities with a unified suite. When you sacrifice too much, it starts impacting your ability to manage your spend and stay agile in your operations. A lot of the end-to-end suites in the market today aren’t natively developed or integrated and are instead made up of acquisitions, some of which are better integrated than others.

4. What are the specific gaps you see where providers fall short within the P2P domain?

Specifically, AP is where providers typically come up short. This is because historically the full suite procure-to-pay vendors and source-to-pay vendors tend to come from a strictly procurement background. A lot of them have built out invoice matching capabilities — but not necessarily the full AP requirements.

In a lot of cases, these vendors address AP from a very procurement-centric point of view, which means that their solutions aren’t ideal for managing all your organization’s invoices. The solution might work OK for invoices that originate within your P2P solution. But for most, that won’t cover all the invoices you actually process. Additionally, most of the solutions today have approval workflows for non-PO invoices, but matching against other PO sources, POs from other source systems, or doing multiple lines per invoice may not be in their wheelhouse. So, if these are things that are important in your day-to-day operations, your business should really dig deep into each vendor’s capabilities and ensure they support those types of requirements.

5. What are some best practices going forward that companies can use to establish procurement technology within their processes?

There is a common thought among many businesses that if they begin to invest and pay for a procurement technology, then it’s necessary to have 100% of spend and all users integrated within just a few months. But this type of hyper-accelerated approach just doesn’t work and certainly isn’t feasible on top of all the other business initiatives and day-to-day operations occurring. Instead, it’s recommended to consider a phased approach where a digital procurement solution rolls out in phases across geographies, such as countries or business units.

The good news is that procurement solutions are getting better and easier to use. So, after implementation, it's all about getting your team to actually use the new technology and make it as simple as possible for them to follow the path of least resistance. If you can make it easy for people to order an item, then you probably have a higher chance of user adoption.

Learn more

Ready to read more about the top digital procurement vendors in the market? Learn about Basware’s and other solution vendors’ rankings in a full report here.

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