According to Forrester’s report, “Create a Modern Software Strategy with AI Driven Platforms and Their Ecosystems,” fewer than one-third of global software decision makers state that simplifying their software landscape is a high priority. To remain agile in dynamic business environments, this should be a top main concern.
Cloud transformation – Now or never
The current ERP approach can be described in one word. “Complex.” And because of their complexity, they inhibit organizations from becoming nimble, and without agility, they’re stuck with legacy applications, on-premise solutions, and clunky technology that ages organizations by keeping them stuck in the past. Instead, modern businesses need to simultaneously be flexible and customer obsessed. They must turn away from the older, technological approaches and take steps to adopt open ecosystems and microservices-based approaches.
According to Forrester’s report, “Create a Modern Software Strategy with AI Driven Platforms and Their Ecosystems,” “Overdependence on one vendor creates commercial and technical risks.” And Forrester isn’t the only analyst suggesting this new mode of thinking. Gartner’s “Critical Capabilities for Procure-to-Pay Suites 2019” report suggests a similar notion, stating that “Organizations should understand that P2P vendors are not one-size-fits-all.” So how do you take this vision and create a unique experience best suited for your organization’s needs?
Strike a balance between over- and under-standardization
The ERP era of the 1990s and early 2000s wasn’t a shining moment. It left customers with legacy applications heavily customized to their organization. These customizations hindered agility and prevented businesses from being able to respond to change. And though overstandardization has its qualms, so does the other end of the spectrum.
Having too many solutions and a lengthy list of vendors has its problems. For one, too many disparate systems create dislocated and chaotic data. Fragmented data created by siloed applications can lead to inaccurate business decisions and disjointed customer experiences. Costs and risks also heighten.
So, if neither overstandardization nor understandardization is the answer, what is? It’s about finding that happy medium in the middle that avoids both extremes and locates a balance that best suits your organization’s needs and goals. Forrester states that, “Leaders and their teams can avoid taking on too much risk in their software portfolio while also fostering technology-driven innovation by leveraging SaaS products and services around their core business platforms.” The best way to achieve this is by following these steps, as suggested by Forrester:
1. Decide on your core team of platforms. Discuss what exactly it is you need, and then use these platforms as the foundation of your business. As time goes on, you can customize them further. But, start with the basics and make sure key stakeholders are on the same page when it comes to your core platforms.
2. When you do decide to customize your platforms, only do it if it will, as Forrester puts it “positively differentiate your business.” In other words, don’t customize just for the sake of customizing. If you do, you’re just falling back into the same bad habits that got you here in the first place. Instead, adopt an approach that encourages thoroughly vetting your decision to customize.
3. Don’t underestimate the strength of services providers and don’t be afraid to use them. You want to ensure you’re teaming up with services providers that understand what business looks like in a future that strikes a balance between overstandardization and understandardization, starting with simplification and access to a long tail of specialized skills.
The future of smart business applications
Modern SaaS products are jam-packed with innovation, flexibility, ease of use, and ease of implementation. The best of those are already equipped with the ability to let customers create unique UIs, workflows, business rules, and data models. However, Forrester predicts that over the next 3-5 years, “the products that will win in this new market will be: open, integrating easily with other leading platforms; dynamic, anticipating deviations from plan and proactively correcting course; and built with AI, not just adding it on.”
All modern software companies understand the importance of AI and other intelligent technologies. But Forrester warns that given the future landscape, the main differentiator between products won’t simply rest in the AI they possess, but how a development team applies these technologies.
Smart business applications in the future will do the following:
“Alert up, not drill down.” Businesses should rely on software to help them become proactive and predictive, not reactive. Basware’s intelligent order aggregation is an example of this. The software spots that you order from a certain supplier with a certain level of frequency, notices that you’re requisitioning, and based off past data can suggest that you wait a day or two in order to bundle items into one PO, saving on shipping and handling costs.
“Automate processes.” Automated processes equal less human intervention, leading to less tedious manual work, fewer errors, increased data capture, and quicker overall processing. Basware AP Automation reduces exception activity through flexible matching, payment plans, and automated coding. In Gartner’s “Critical Capabilities for Procure-to-Pay Suites 2019” report, Basware was ranked #1 for both the AP Automation critical capability and AP use case.
“Deliver specialist domain expertise via context-specific recommendations.” Those who lead the pack in AI are creating and catering their technologies to help users solve business problems and inform their strategy with data.
Key Takeaways – Prepare for the evolution of the P2P ecosystem
First and foremost, revisit Gartner’s main message from their “Critical Capabilities for Procure-to-Pay Suites 2019” report to get the full background: There’s no longer such thing as a full procure-to-pay (P2P) suite. Instead, it’s time to adopt an integrated approach, a P2P ecosystem that provides a central location for all the unique plug-ins and applications that best fit your organization. Additionally, get a full understanding of your organization’s application ecosystem. Lastly, play an active role in your ecosystem development.
Basware as an Ecosystem provider
Basware is proud of our history of providing innovative technologies and procure-to-pay (P2P) solutions to our customers. But we understand that being a leader in the industry means understanding how we fit into the larger landscape and the future of P2P.
For years, we’ve driven the idea that multi-ERP setups fail customers, and in the same way, we agree with the research that shows a one-size-fits-all P2P vendor will eventually fail its customers, too.
We firmly believe in a future where a microservices architecture will enable customers to manage both vendors and spend through a core spend management platform like Basware’s but also allow them to capitalize on the latest in specialist services by providing an ecosystem of plugin applications.
Ready to learn more?
Learn more about the changing environment of software and download the full Forrester report. Questions? Contact us here.