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The Rise of the Ecosystem in Procurement and Sourcing

Tuesday, March 2, 2021

5 minute read

The Rise of the Ecosystem in Procurement and Sourcing

Though there may be some organizations where a sole procure-to-pay (P2P) suite works just fine for their sourcing and procurement needs, for the majority of larger organizations, and especially those operating on a global scale, that’s not the case.

 

Digitization of procurement and sourcing are in full force and the applications that provide these services are, too. But these vendors typically offer full end-to-end procure-to-pay (P2P) suites with only a part of their solution dedicated to procurement and sourcing. Times are changing. And the days of an end-to-end P2P suite are coming to an end.

Change your view of integration

According to Gartner’s report “Don’t Assume You Have to Use a Source-to-Settle Suite to Digitalize Procurement and Sourcing,” “One of the main reasons that buying organizations are attracted to the full suites is to minimize integrations. While this is understandable, it can’t be prioritized over having the right solutions.”

More advanced applications, like Basware’s, are built with integration in mind.

Basware solutions come with certified ERP intelligence, enabling seamless interoperability with the world’s leading ERP systems, including SAP, Oracle, and Microsoft Dynamics. But our Network of plugins also allows customers to pick and choose, then plugin, the applications and solutions that best fit their needs. And where we’re proud of our roots of providing a history of innovation and P2P solutions, we’re also keen on the idea that in order to remain a leader in our field, we’ve got to adapt and understand how we fit into the larger landscape of the future of P2P.

Gartner supports this sort of ecosystem of preconnected partners. And though this may cause a conflict for many P2P vendors, that’s not the case with Basware. We agree that ERP omnisuites have failed customers and in this same chord, believe that P2P suites will, too. Instead, we’re offering customers a Networked P2P with a strong API framework and 100% data capture. Using this as the core solution, customers can then connect to the specialist solutions they want to assist their business with contract lifecycle management, sourcing, vendor risk management, procurement, or spend analytics.

Consider a Specialist

Though a “one size fits all” tactic might seem like an easy solution to your P2P problems, this sort of blanket approach isn’t practical. It’s clear that no vendor offers a full procure to pay suite that is best in class across all modules. By going with a full P2P suite, customers are locking themselves into suites of uneven quality that will often take years to roll out. This can lead to low and slow adoption rates. And in order to achieve user adoption, Gartner says you “should focus on finding solutions that fits your buying organization’s needs as closely as possible. This means that, in many areas, it makes sense to consider alternative specialist solutions to replace or — in some cases complement — the suite offerings.”

At Basware, we believe that this “microservices architecture” will look a lot like an ecosystem of application plugins, running off a core spend management platform like ours. This gives customers to ability to hand-select specialist services best suited to their needs. These types of services could include:

  • Solutions for complex sourcing categories, like packaging and logistics.

  • Linkages via API to data sources addressing sustainability, supplier diversity & other dimensions of supplier risk.

  • Procurement Savings Forecasting

Next steps in your P2P ecosystem journey

As organizations become more comfortable with an ecosystem approach to procurement and sourcing technologies, they can also begin to understand their vendor’s partner ecosystem and how it aligns their roadmap.

Leading procure-to-pay vendors have established ecosystems with many preconnected and verified partners across various application markets. This includes partners such as ERP vendors, tax engines, supplier data providers, and strategic sourcing application vendors.

To understand the value you can derive from a vendor’s product ecosystems, and to evaluate the effectiveness of its community, Gartner recommends requesting the following:

  • Data from the vendor outlining the number of ecosystem participants, the trajectory at which the ecosystem is growing, and insight into those that use it regularly.

  • Metrics that disclose the number and frequency of documents, components or templates being uploaded by the vendor to the community (often called an online library).

  • A summary of the past three years of product updates originating from, or inspired by, suggestions from ecosystem partners.

  • Customer references that you can contact directly for an assessment of the vendor’s product ecosystems, and any user groups that they may participate in.

Ready to learn more?

Learn more about the ecosystem approach to P2P in our on-demand webinar with Forrester. Watch it here.