ERP Vs P2P: A Head-to-Head Matchup
- All Industries
- Procure to Pay
ERPs can be found in almost every organization. Usually drawing the eye of finance or IT they are widely used to connect and manage data from multiple business units.
While this sounds like a one stop shop for all business data, the harsh reality is that ERPs are not designed for procurement.
They excel with handling and connecting finance, accounting, or HR data but when it comes down to something that requires a large degree of flexibility, they ultimately fall short.
Procurement is a complex function that requires a lot of both flexibility and collaboration. At the end of the day, ERP capabilities just simply are not a fit and leave a lot to be desired.
Often ERPs have to be pieced together in an ad-hoc fashion in order to provide organizations with the services they really need. In doing so, procurement is the area that suffers the most.
This results in teams often looking outside of the ERP system for answers but that has its own host of problems including a lack of visibility, inefficiency, or quite frankly, a large amount of wasted money on a system that procurement can’t and won’t use.
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Here are six of the most common problems you are bound to encounter:
- Cost: First and foremost, traditional ERPs are costly, and that doesn’t even factor in the extra expenses associated with time to get up and running. When needing to add in or develop an extra module for procurement needs the costs quickly skyrocket.
- Time to Implement: ERPs are naturally very slow to implement. An example from a Gartner report illustrates this: “One client reported that it had decided to run two pilots and compare an ERP vendor’s on-premises module to a cloud-based specialist solution. Before the company had even configured the ERP module, it had already finished the entire pilot of the specialist solution.”
- Poor User Experience: With so many ERPs having to be supplemented with ad hoc solutions, users experience frustrations and confusion. Being forced to move between different user interfaces can kill both productivity and overall adoptability.
- Extreme Complexity: A good user experience is a must have for today’s technology solutions. Traditional ERPs are too complex, and the add-ons must follow the broader ERP suite in terms of functionality.
- Inflexibility: With an all-in-one mentality, end users are being forced into solutions that offer limited flexibility in order to fit the broader ERP spectrum. This often draws the comparison of running procurement through an ERP as “fitting a square peg in a round hole”.
- Narrowly Focused on Finance Functions: Many times, procurement capabilities are dragged along with ERPs when procurement and financial functionality are assumed to be sourced from the same vendor.
There is a better way to address these headaches by looking beyond your ERP and considering a procure-to-pay solution instead. By integrating a cloud-based procurement solution you can drive more value, be more strategic and increase savings.
Or if it’s the right move for your organization, you can take a major step forward by leveraging a source-to-pay platform, which provides a single source of truth and visibility into a solution suite including spend analytics, sourcing, contract lifecycle management, supplier management, eProcurement and accounts payable.
These cloud-based solutions are easy to implement and provide a quick return on investment. As opposed to ERPs, eProcurement systems are implemented within months instead of years.
The return on investment is almost immediate, with the initial cost of an eProcurement system just a fraction of the cost of an ERP.
Also, an eProcurement solution provides tangible spend savings through strategic sourcing, spend reduction and identifying cost saving opportunities.
You need a solution designed to fit your needs, not a “one size fits all” system.