Spend Matters Untangles the ROI of a Source-to-Pay Suite vs. Standalone Modules
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- Cross-Industry
- Source to Pay
When making the decision to switch from disparate, standalone procurement modules to a suite of source-to-pay (S2P) solutions on the same platform, there are many factors you need to consider. Thus far we’ve discussed the benefits of a suite and how to gain leadership buy-in.
Of all the benefits of the source-to-pay platform, one of the biggest is the total return on investment (ROI) for your organization. And how do you convince budget holders to go with a suite solution? By doing a cost analysis of multiple standalone procurement solutions versus a full suite approach.
When pulling together numbers for the analysis, you will need to remember there are numerous costs to factor into the overall cost of ownership including:
- License fees
- Maintenance fees
- Supporting hardware and software fees
- Supporting personnel fees
- Team member costs for manual data entry and processing
The final cost is especially important to factor in for applications that require a lot of human intervention to manually correct and match problematic invoices.
The following is a sample breakdown of costs pulled from the Spend Matters report, Making the Business Case for Procurement Suites over Standalone Modules: Benefits, Rationale and Hard-Dollar Returns.
Standalone Modules | Up Front Maintenance | ||
---|---|---|---|
Spend Analysis | $100K | $20K | |
RFX & Easy Auction | $50K | $10K | |
Decision Optimization | $150K | $30K | |
Contract Management | $100K | $30K | |
Integration | $100K | $20K | |
Manpower | $200K | $700K | 7 FTE @ $100K |
Totals | $700K | $810K | $1510K |
Suite | |||
License | $250K | $50K | |
Manpower | $0 | $400K | 4 FTE @ $100K |
Totals | $250K | $450K | $700K |
In addition to these costs, you have to consider the savings a source-to-pay suite can provide in terms of bundling and labor. As the report states: “…from module selection, to upfront configuration and implementation, to ongoing supports and upgrades. Conservatively, this can range from 20%-40% less from a bundling perspective and 50%-80% from a labor perspective depending on modules included or supported.”
When you consider the costs of using and maintaining best-of-breed procurement modules you could be looking almost twice the expense of a single source-to-pay suite.
Almost double – that is what you are looking at to continue to maintain and build on standalone modules. The numbers speak for themselves, the ROI for a suite is significantly greater in terms of cost savings and man hour savings. Consider a suite solution like the one JAGGAER offers and start realizing significant long-term cost savings today.