Is your ERP the right solution for your teams?

Your Enterprise Resource Planning (ERP) solution might appear to be a desirable option for your teams with its ‘all-in-one’ features and functionality. But this may not be the case. Even though you’ve used it for a long-time, it may not contain the depth of a best-of-breed, specialist spend control solution. From implementation costs to your ERP’s limitations, you could be holding your organisation back from increasing compliance, control, and potential savings.

There are a number of reasons why your ERP might not be as suitable as you first thought:
  1. Not agile enough. Businesses require agility: the ability to change when business priorities shift or when hit with a pandemic. With an all-in-one approach, the agility is lost. Changes occur more frequently in public procurement than your IT team’s ability to upgrade ERP versions. At Proactis, the integrated, end-to-end nature of its platform means that new functionality and enhancements are continually being introduced, allowing us to stay on top of market needs.
  2. Access for all. Think of the vast number of people in your organisation buying goods and services. Do they all have access to the ERP system? Probably not. Buyers in the organisation should have access to a platform to easily buy from negotiated contracts, at agreed prices, from authorised suppliers. If they don’t have access, they’ll find a workaround resulting in zero visibility of what’s being spent. And because ERPs are rigid, and have often been pieced together throughout the years, the user experience might be poor, leaving your Procurement and Finance teams frustrated.
  3. Information management and access. Similar to your ERP system, a system to support spend control processes is built around management of, and access to, base information. Most of that information is probably not currently held in your ERP system, such as the details about supplier qualifications, supplier contracts, RFx documents and related supplier responses, and supplier catalogues. Transactions involve details of purchase requests, purchase orders and invoices – mainly during the time before they are recorded within ERP.
  4. Guided processes. Because employee adoption is so important to the spend control process, and because many employees will be ‘non-expert’ users that interact with the system only occasionally, it is very important that the functions they use are extremely intuitive, fast and easy. A best-of-breed spend control system can efficiently and correctly ‘guide’ employees through processes such as self-service buying (e.g. selecting items in a shopping cart), requests for expert assistance (e.g. help with buying a new laptop), simple supplier quote requests (e.g. selecting temporary employee services), or detailed RFx requirement definitions (e.g. for an IT service contract).
  5. Workflow and business rules. Unlike most ERP functions that are about maintaining base information and recording the fact that something happened, spend control processes are much more about facilitating the flow of activity among employees, managers, procurement professionals, accounts payable personnel and suppliers. For that reason, most spend control is based on automated workflow that uses various user-defined business rules like approval thresholds and routings and on generation of alerts for time-based activities like contract reviews. Highly flexible, easy to configure workflows and business rules are very important in a spend control system.

Ultimately, spend control processes and the supporting system are largely outside the scope of most ERP systems. During our Navigating spend control transformation webinar, James Arvin, Director of UK Public Sector & Higher Education from leading ERP-provider Unit4, explained that: "There isn't a system in the world that can do everything, certainly not everything well. And that's where, from a Unit4 perspective, key partnerships with organisations like Proactis really come to the forefront. And having integrated, complementary sets of technology can enable the bringing together of not just the technology, but the business processes and people."
 
Our cloud-based procurement solution is a platform that can seamlessly integrate with your ERP and offer you the depth of functionality your organisation needs to remain agile and competitive in today’s market - while also retaining the benefits of your ERP solution.
 


The spend control process?

Spend control is a structured business process that dramatically increases the control and visibility you have over what your organisation spends for all types of goods and services.  It’s a process you use to significantly reduce costs by ensuring that only truly needed and properly authorised goods and services are purchased, and by making sure you obtain best possible value when they are. It also serves to dramatically reduce invoice processing time, effort and cost in Accounts Payable, as well as creating greater efficiencies in Procurement and throughout your organisation. 
 
But you may be wondering if it is possible to implement effective spend control without first replacing your existing ERP system. You know from experience that process can be long, expensive and risky. You don’t want to do it if you can possibly avoid it.
 
The good news is that you can deploy highly effective spend control around just about any core financial management or ERP system. In fact, it makes good sense to use a spend control system that is outside the bounds of ERP for two important reasons:
  1. Spend control is about managing business processes that are outside the realm of ERP. For instance, it manages the processes before a PO or invoice hits ERP and before a supplier is added to ERP. And it uses a whole new range of information about suppliers, RFPs, contracts and catalogues that is not even in your ERP system.
  2. Spend control involves many more people than those who use ERP. Parts of your system will be used by practically every employee. Other parts will be used by your suppliers who are outside the four walls of your organisation.
Because the business processes are so different, and because so many people will always be ‘non-expert’ users, the nature of a good spend control system is quite different from the nature of most ERP systems. Modern spend control systems have been designed to remove complexity and guide users through intuitive step-by-step processes – a different approach to the transaction processing model within most ERP systems.
 

Consider the following:

Do you need to replace your existing ERP system before embarking on a spend control program? 
Unless you have other reasons for replacing it, the answer is almost certainly no. If you are getting the fundamental financial management and reporting capabilities you need today, most integrated end-to-end systems are not going to disrupt that, but will certainly give you more information to work with – especially a longer-term view of your cost pipeline.  

Is the procurement system that comes with our ERP system your best option? 
Very few, if any, ERP systems have a procurement system with the range of applications to fully support both the Source-to-Contract and Procure-to-Pay business processes. Those that come close have all acquired and packaged together the solutions they offer, so they may be no more integrated than solutions from elsewhere. 

If your ERP system offers this option, you will probably want to consider it along with best-of-breed options. Just keep in mind that, because ERP and procurement are relatively separate systems, the advantages of a solution from a provider that is fully focused on spend control may well outweigh the advantages of a single solution provider.

Can you deploy a single spend control process across multiple ERP systems? 
Many companies are doing this today. If you have several different ERP systems supporting different business units within your organisation, you can gain tremendous advantages by implementing a common spend control ‘umbrella’ across all of those business units while integrating as needed with each of the individual ERP systems. An integrated end-to-end system enables you to aggregate demand, consolidate suppliers and collect spend history across your entire organisation. This can lead to greatly increased spending power which results in better suppliers, greater volume discounts and lower overall costs.
 


We can help you to decide whether your ERP the right solution is right for your teams.

Talk to us today