To suite or not to suite?

In today’s post I thought I would go back to one of my favourite subjects: suites vs. specialist solutions. It’s a topic that sometimes feels ‘beaten to death’ but it remains a very important question, especially for organisations that are about to make a procurement technology investment decision.

In my previous role at Gartner I spoke to hundreds of clients a year, and one common question I was asked about was ‘the best’ S2P suite. My response always was (and still is) that you shouldn’t start with the assumption that a single S2P suite is the right choice. Now this does not mean that the best choice in the end might not be a single S2P suite, but don’t exclude specialist vendors just because they don’t have a ‘full suite.’ I put full suite in quotation marks here because there are significant differences between both the ‘fullness’ of the suites and the definition of suite from the various vendors. Or in other words, some suites are very light on functionality in some areas and some suites are so called ‘frankensuites’ made up of multiple acquired solutions with limited integrations.

So why am I saying that you shouldn’t assume that a suite is the answer? Well, the easy answer is that no suite is best-in-class across the board for all industries. CLM and SXM are examples of areas where some suites have very light capabilities not to mention more specific areas like direct materials sourcing for example. Secondly, as mentioned earlier, some suites aren’t necessarily as integrated as their marketing might imply. So while it might be tempting from an IT management perspective to have one vendor to deal with, it might not really solve the business problems that you are trying to solve.

All that said, there definitely are benefits to the suite approach as well (if it meets your requirements) even beyond IT management. One advantage is that you (hopefully, but not guaranteed) get a common consistent user experience across the suite, so users can more intuitively learn how to use a new module since icons, and the like, represents the same concept across the suite. Before you count this as a major advantage, you need to figure out how many users will actually use multiple modules.

Another advantage is in the analytics space. By having one suite you can pull data from one module to support decisions and tasks in another module. For example, information from your CLM application can help the end user ensure that you have a valid contract in place before placing an order, and that the pricing is correct. But again this is not something you can assume just because you are buying a suite.

The ‘frankensuites’ made up of multiple acquisitions might not have this specific integration in place. In fact even some natively developed suites might struggle with sharing data across modules as the modules have been designed as standalone offerings that have been integrated later on (i.e. not sharing the same data model). Further, with the emergence of APIs and other real-time integration techniques specialist solutions might be able to share data as well. After all, multitenant SaaS solutions should be able to integrate once on behalf of all their customers.

So what should you do if you are facing this question?

Since there are benefits of using a suite you must balance these with the need for specific functionality that is needed in specific areas. My advice is to evaluate each module on its own merits and then see how much of a single suite that is suitable for you to adopt. View it as an award scenario in an e-sourcing event; the cheapest scenario is the cherry pick scenario where you pick the lowest price per item regardless of supplier. But in this case you pick the solution that best meets your requirements. The risk here is that you end up with a different supplier for each item (or in this case module) which might not be realistic. So the question then becomes how much more are you willing to pay to have fewer suppliers, which then translates into how much functionality are you willing to sacrifice to get fewer application vendors?

For a reasonably complex organisation I don’t think any single S2P suite is sufficient to truly digitalise all of procurement. The question is how much of a single S2P suite you should use, or in some cases, how many complementing solutions do you need to extend your S2P suite?

 

Voices (4)

  1. Fabian:

    According to Gartner and Forrester Coupa can tick the boxes .

    1. Magnus Bergfors:

      Well, as I say in the article most S2P suites can potentially tick the boxes but you shouldn’t assume that from the start.
      But I am curious to know where Gartner states this? If you are referring to the MQs they don’t say anything of the sort (and I should know given that I authored both the last P2P and Strategic Sourcing Application Suited MQ). The MQ’s are market reports that look at a lot of criteria where product is one of something like 10 (the author chooses, and weighs, the relevant criteria for each market) and Coupa was not in the leaders quadrant in the Strategic Sourcing MQ.

  2. Linh:

    Great insights and absolutely spot-on. Do you think specialist solutions might end up being swallowed by the suites (as it has happened before) or is there a a reason for it to not happen?

    1. Magnus Bergfors:

      Thanks Linh! There is no yes or no answer to that question though. It’s safe to say that there will be more consolidation in the market and the suite players (and others) will continue to acquire interesting specialists.
      But at the same time I think increased out-of-the box integrations (via API’s) between specialists will make it less important for the end users.

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