Spend Matters Untangles the ROI of a Source-to-Pay Suite vs. Standalone Modules
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|
|RFX & Easy Auction||$50K||$10K|
|Manpower||$200K||$700K||7 FTE @ $100K|
|Manpower||$0||$400K||4 FTE @ $100K|
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.