Best-in-breed vs all-in-one: which source-to-contract solution should you choose?
As more of the world’s procurement organisations undergo digital transformation, it can be challenging to decide on which steps to take next to deliver the most value. Is an all-in-one solution for every step of the procurement process better than best-in-breed solutions for individual processes?
As more of the world’s procurement organisations undergo digital transformation, it can be challenging to decide on which steps to take next. Should we move all steps in the procurement process to digital services at once, or incrementally? Do we look at an all-in-one solution for source-to-pay, source-to-contract, or purchase-to-pay? Is siloed data from best-in-breed solutions better than centralised data from one general provider? What will deliver the most value for our organisation?
The all-in-one solution
All-in-one systems provide a suite of software solutions for each step of the procurement process, normally grouped into source-to-contract and purchase-to-pay solutions by vendors. All of the data produced in such an arrangement makes it easy to produce comprehensive master data sets that are easy to handle and to convert into business intelligence insights.
One potential drawback, however, is the level of sophistication of individual modules within all-in-one systems. There may well be a number of modules that perform at a near-optimum level, but others may be insufficient in terms of their features and data collection capabilities. This means that organisations may face bitter disappointment should the solution be rushed through its implementation without the appropriate prior research.
When should I use an all-in-one solution?
If you are in the early stages of initiating digital transformation, an all-in-one solution presents an opportunity to skip over several years of incremental changes so you can modernise your entire procurement process in one go.
An all-in-one solution is also well-suited to highly-centralised organisations, as you can continually build deeper business intelligence of a longer, sustained period with the likelihood of disruption causing a need to change vendors being extremely low.
On the other hand, a best-in-breed solution is one that focuses on delivering the best possible experience for one particular stage of the procurement process. If your organisation relies heavily on a high number of vendor relationships, for instance, you may implement a Contract Lifecycle Management (CLM) solution that allows you to stay on top of the obligations and scope of each vendor contract.
The data this solution creates will most likely be extremely detailed and rich. A challenge may arise however when integrating this information with other data stacks within your organisation, as it may be structured in a format that makes it difficult to extract further insights.
When to deploy best-in-breed solutions?
Best-in-breed solutions make sense for organisations that are quite advanced in terms of their digital transformation. They have already laid the groundwork for each stage of the procurement process, and they have developed the capability and need to work with more sophisticated tools and deeper data sets to drive competitive advantage.
In addition, decentralised organisations located in multiple time zones and locations may find it easier to tailor their vendor choices to meet the needs of the market and of the partners and vendors they work with. Maintaining a single solution may, in fact, be of detriment in some cases, as your procurement processes are forced to adapt to your chosen platform instead of finding a solution that delivers the most value.
When choosing solutions, a general rule of thumb is to try to work with as few systems as possible without impeding the effectiveness of your operations. You need to weigh the advantages delivered by a particular solution against the challenges you will face when integrating it with your master data and ensuring it complies with company policy.
On the other hand, carefully assess the track record of all-in-one solution providers. In some cases, you may be presented with a suite of software made up of a number of pieces built by independent developers and packaged with the same branding. You may then want to consider looking for a provider that has developed their own unified solutions in partnership with their customers.
Finally, research the amount of support on offer in terms of onboarding, data integration, and training. Without adequate support, the solution you choose may end up becoming a problem you don’t need.
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