Beware ERP: Expense & Regret Purchasing - Coupaget.coupa.com/rs/coupa/images/Expense-Regret-Purchasing-ebook-vFINAL.pdf · you’ll regret it! ... it’s rarely a convenient time

Beware ERP: Expense & Regret Purchasing 10 Reasons Why ERP Can’t Deliver Smarter Spending and Savings ACoupaeBook

Feelfreetorepublishexcerptsfromthiswhitepaper,aslongasyoulinkbacktohttp://www.coupa.comforattribution.Andit’salsookaytosharethisreportinitsentiretywithanyoneyouthinkmightbeinterested.Infact,I’dbedelightedifyoudid.

Coupa Software BEWARE ERP: EXPENSE AND REGRET PURCHASING 2

Introduction Thereisareasonwhy65%ofERPimplementationsfail.ERPsolutionsarecomplex,requireanobsceneamountofresources,aredifficulttodeployandevenmoredifficulttouse.Nowdon’tgetmewrong,ERPsoftwaredoeshaveitsplaceinthetechnologyecosystem–it’sabsolutelyterrificformanagingtransactionsandgeneralledger–I’mjustsayingitsplaceisnotinpurchasing.

EveryprocurementprofessionalknowsERPsystemsaren’tmuchhelpwhenitcomestoturningbusinessesontosmarterspendingpractices.Chancesareyou’rethevictimofanIT‐ledprojectteamthatconvincedthepowersthatbetospendhundredsandthousandsofdollarsonanERPsystemthatwould“solvealltheirproblemsandsavethemmillions.”Nowyou’reforcedtomodelyourprocure‐to‐payprocessonwhatyourERPsystemcansupport–andnotnecessarilyonwhatisbestforthecompany.

Nowhereyouare,stuckwithapurchasingprocessthatistime‐consuming,costlytosupportandavoidedateveryturnbythepeopleyouneedtouseit.Ratherthanfollowtheprocess,employeespurchasewhattheyneedandexpensetheitemslater,confidenttheywillbereimbursedforthepurchase.Managershavelimitedinsightintospendingasitoccursandoftenregretwhatthey’veapprovedoncetheyfindoutjusthowmuchtheywentoverbudget.

You’vehadenoughofthisERPmadnessandarereadytosellyourvisionfore‐procurementbutknowtheERPdefensewillcomeup.Sohowdoyoumakeyourcasefore‐procurement?Hereare10reasonswhyyourERPsystemcan’tdeliversmarterspendingpracticesorthesavingsthatcomewiththem:


Number 10. No one can figure out how to use it

Inanerafordownsizing,rightsizing,doingmorewithless,andwearingmultiplehats,procurementgroupsnolongerhavetheresourcestosupporteverypurchasingneedintheorganization.Employeesarebecomingincreasinglyresponsibleformanagingtheirownrequisitionsandsupplierrelationships,anddon’thavethetimeorpatiencetonavigateacomplexsystem,orresearchpoliciesandprocedurestopurchaseofficesupplies.Ifthesystemisnotintuitiveandeasy‐to‐use,youremployeeswillsimplyworkaroundit.Letthemexpenseit,andyou’llregretit!

KnowYourUsersandWhatTheyNeed

ERPsystemswerebuilttobesophisticatedenterprisesystemsforcertifiedexpertsandprofessionals.Asaprofessionalaccountantorbuyer,youattendsomein‐depthtrainingclasses,putonyourthinkingcap,andfigureitout.Butifyouareanaverageemployee,it’sunacceptablycomplicated.

Don’triskarevolt(oryourcareer)‐completewithgraffitiwrittenonthebathroomwallsaboutyourfailedrollout‐byforcingemployeesintoasystemyouknowistoocomplicatedtouse!Knowyourusers,knowwhattheyarecapableofandgivethemasystemthatlet’sthemeasilygetwhattheyneedandgetonwiththeirday.

GiveThemAmazon.com‐likeEase‐of‐use

It’snocontest;e‐procurementsolutionsarethehandsdownwinnerwhenitcomestoease‐of‐use.Fromonlinecatalogstosupplierpunch‐outsites,it’sasfamiliaraspurchasingsomethingfromyourfavoritewebsite.Inaddition,youcansearchforspecificproductsandservices,reviewrelevantbuyingpolicies,comparisonshopandviewsupplierratingsandbuyerfeedbackmakingitinfinitelyeasiertocompleteyourpurchase.

Inmanycases,employeesfindthatane‐procurementsystemis“easiertousethanavoid.”Sosaygood‐byetospendingsurprisesandunapprovedexpensestatements.Bygettingemployeesto“buyin”tothesystemanduseit,youmaximizeyouropportunityforsavingsandyourabilitytocontrolspendingcompany‐wide.

MakeYourCasefore‐Procurement

HelpthemunderstandhownegativitytowardyourERPsystemwillcostyoudearly!

• Ifyoucan’tusethesystem,howonearthdoyouexpecteverydayemployeestofigureitout?Makeiteasierthanexpensereporting,andwatchadoptiongoup.Noonewantstoshelloutfromtheirownpocketandtrackpaperreceiptsifthere’sabetterwaytobuy.

• Whileeveryoneend‐aroundsthesystem,we’llsuffer:decreasedproductivity,lostleveragewithsuppliers,higherprices,andincreasednon‐payrollcostsby15%


Number 9. It is too slow and unproductive

FormostemployeesfillingoutapaperformisfasterthansubmittingarequisitionthroughyourERPsystem.What’smore,mostemployeeswouldratherjustgodowntothelocalstore,getwhattheyneedthenandthere,andsubmitanexpensereportlatertoaccountforthespend.Plus,mostERPtoolstake30‐45secondstologintoandtonavigatearoundtheendlessmenustotherightformfortherightrequest.Nottomentionthetimeittakestoprocess,getapprovalsandactuallyreceivetheitemyouneed.Nowonderemployeestrytoavoidtheprocessatallcosts.

UnderstandthePainsandObstacles

Acommonmisconceptionaboutchangingemployeespendhabitsisthatifyoumaketheprocessdifficultenough,fullofforms,reviews,approvals,tapdancingandhoopjumping,employeeswillnotspendanythingbecauseit’sjusttoodarnhard.Nottrue.Itonlyappearsthatyouareachievingresultsbecauseallofyourspendisnotundermanagement.

Butdon’tbemistaken‐employeesarespending,you’rejustnotseeingituntilamonthortwolaterwhentheysubmittheirexpensestatementsandyouarewonderinghowyouwentoverbudgetagain.Theyarebuyingoutsideofthesystem,outsideoftheapprovedprocessandoutsideoftheapprovedsuppliersandpre‐negotiatedprices.

EmpowerProductivity

Let’sfaceit,youremployeeswerenothiredtomanageapurchasingprocessorunderstandhowyourcomplexERPsystemworks.Somakeiteasyforthemtofollowtheprocess,ortheywillfindaneasierwaytogetwhattheyneedtogetthejobdone

RatherthanforcingemployeestopurchasethroughaforeignERPsystem,simplify!Usefamiliarconventions,andusee‐procurementtoincorporateeverythingtheyneedtocomplywithpurchasingguidelines,solicitcompetitivepricing,andprovidetherightinformationfororderingandbilling.

WeoncecountedthenumberofclicksandfieldentriesittooktobuyapencilthroughanERP.Theanswer?37.


Whattypeofworkenvironmentdoesyourorganization’sleadershipwant?

• Doyoureallywantpeopletobespendinganhourtryingtofigureouthowtobuyastapler?

• Canyourisknegativemoralebyforcingemployeestojumpthroughtime‐consumingandmindlesshoopsinsteadofdoingwhatitistheyarehiredtodo?


Number 8. It is inconvenient for managers

I tcanbearguedthatERPsystemsarereallytheidealtoolformanagers.Afterall,itisapowerfuldataandreportingenginewithaccesstoeveryconceivablemetricandstatisticneededtomakeinformedbusinessdecisions.It’ssophisticated,it’sexpensive,andit’scompletelyinconvenientformanagerstouse!

Today’smanagersarefirefighters,handlingescalatingprioritiesanddealingwiththeproblemdujour.Thoughconnected24x7throughtheiriPhonesandBlackberries,theystillcan’tgettheiremailbacklogunder100.Thelastthingtheyneedisyetanothersystemtoaccess,anotheradministrativetasktoremember,andanotherprocesstoadaptto.

Yourmanagersarebusyenough

Flexibilityisessentialforsuccessfulmanagerswhoarejugglingmultiplepriorities,projects,employeesandmeetings.AndunfortunatelyERPsystemsoftenrequiremanagerstoapprovepurchasesonlythroughthesystemandinaveryparticularway.Theproblemis,it’srarelyaconvenienttimeformanagerstodropwhattheyaredoingtologintotheERPsystemtoprocessrequests.

ForcingmanagerstousearigidERPsystemtoapprovepurchasesandmanagespendwillonlycausefrustration,dissatisfaction,andpeopleultimatelygoingaroundtheprocess.Andbeforeyouknowit,yourmanagershavelostallspendcontrolandvisibility–alose/losesituationforeveryone.

Therighttoolsmakeallthedifference

Effectivespendcontrolmeansspeedyandefficientreviewanddispositionofspendingrequests.Otherwise,youriskdelaysandbureaucracythatslowdownthebusiness.Buttomaintainthiscontrol,youmustprovideemployeeswiththetoolsthatworkwithhowtheyworkandnotonesthatforcethemintoarigidconstruct.That’swherethevalueofe‐procurementcomesin.

Withane‐procurementplatform,managerscaneasilystayontopofspendrequestsandbudgetsthroughemailalertsandevenapproveorprovidefeedbackonrequisitionsstraightfromtheiremail,Blackberry,iPhoneorothermobiledevice.


ExplainwhyERPsoftwareletsmanagersdown!

• Peoplewon’taskpermissionbeforetheybuyunlessapprovalshappenfast

• Managersdeservetheconvenienceofapprovingstraightfromemailormobilephone

• Onaverage,youshouldbeabletocompletetheapprovalprocessinunder12hoursvs.thetypical2‐3weeksrequiredtocompletetheapprovalcycleinERPprocurementmodules


Number 7. It can’t prevent over-spending

WhenyourERPpackagewasfirstimplemented,thereisnodoubteveryoneintheorganizationhadthebestofintentionsandthehopethatitreallywouldsolvealltheproblemsyouthoughtitwould.Andwhileithasdeliveredonthepromiseofmanaginginformationandpossiblyenforcingsomepoliciesandprocedures,nowthatthesolutionisdeployedyouhavediscovereditsabilitytohelpmanagespendandpreventoff‐contract,wasteful,maverickspendingleavesmuchtobedesired.

ERPdeliversbadspendingnewsonlyonceit’stoolate

Everyquarter,theaccountingdepartmentperformsa“close”andrunsreportsfromtheERPsystemtoseewhathappened.Didweover‐spendcomparedtoourgoals?Toooften,theanswerisyes.ButyourERPsystemcan’tpreventover‐spending–itsimplyreportsit.

Findingoutthatyouoverspent,twoorthreemonthsafterthespendhasoccurreddoesverylittletohelptheorganization.Youhavenoopportunitytocoursecorrect,nowayofknowingwhenyouapprovedthat$10,000purchasethatyoujustpushedyourspend$8,000intothered.Themoneyhasalreadybeenspentandthereisverylittlechanceforyoutorecoverthatspendonceithappens.Andthat’swhyyoudeservebetter!

e‐Procurementwarnsyouaheadoftimesoyoucanact!

Imagineifyouknewinreal‐timethatyouweredangerouslyclosetobeingoverbudgetandapprovingthosenextprojectswasgoingtoputyou$25Kover,wouldyoudosomethingaboutit?Wouldyoudelaytheotherthreeprojectsorfindamorecosteffectivewaytoconducttheprojects?Absolutelyyouwould!

Withe‐procurement,youcantrackspendingagainsttargetsinreal‐timeandevenbealertedwhenspendreachescertainlevels.Sinceyouhavetheinformationyouneedwhenyouneedittomakethebestspenddecisionspossible,youareabletocoursecorrect,delayadditionalexpensesandultimatelysavethecompanymoney.

Inaddition,youhaveaviewintorecentspendingpatternsandpredictorforecastwherespendingwillfallfortheremainingmonthsallowingyoutobepreparedandplanforlonger‐termspendandsaveinitiatives.


Helpthemseethefuturesoyoucanshapeit!

• Wouldn’twerunthebusinessbetterifwecouldaccuratelyforecastnon‐payrollspend?

• Shouldn’twebesettingspecificspendingtargetsforourbusinessandtrackingagainstthosetargetstomaintainmargins?


Number 6. It promotes a bureaucratic work environment

It’snosecret–whengiventheoptionpeoplewilltakethepathofleastresistanceeverytime.Whowantstospendthetimejumpingthroughhoops,fillingoutforms,chasingdownapprovalsandcallingpurchasingeveryotherdaytoseeiftheiritemhasbeenorderedandwhenitwillarrive.Whydoallofthatwhenyoucansimplygotoaretailstore,instantlypurchasewhatyouneedandjustexpenseitlater?ButthisisexactlywhatemployeestendtodowhentheyareforcedtopurchasethroughacomplicatedERPsystem,makingitimpossibletoeffectivelymanageandcontrolspend.

Employeeswanttodoitthemselves,butareblockedateveryturn

Theinternethasremovedtheboundariesofbusiness.NowasmallbusinessinGeorgiacansupplypeachpreservestoaParisiancafé.Thereisincreasedcompetition,improvedglobalinfrastructureandacompletelynewwayofdoingbusiness.Companiesthatwillsurvivemustbeabletoadaptandusethefullpotentialoftheonlineworldtooperatemoreefficiently.

ERPsystems,howeverhavefailedtomoveintothe21stcentury.Theycontinuetocopy20thcenturybusinessprocesseswhereinformationwasplacedinsilosandaccessibleonlyto“thosewhoneedtoknow.”Thismeansthatwheneveranemployeewantstocreateorcheckonthestatusofarequisitionorpurchaseorder,theyhavetorelyonphoneandemailtocontactthoseintheknowtofindouttheinformationtheyneed.Notonlyisthismethodinefficientandtime‐consuming,italsocausesincreasingfrustrationanddisruptionforyourpurchasingteamandemployees.

Helpemployeeshelpthemselves

Thenewgenerationofemployeeshaveneverbeenwithoutacomputer.Theirlivesareonlineandthelinesbetweentheirpersonalandprofessionalslivesarestartingtoblur.Theyknowhowtoshoponline.Theyknowhowtolookforagooddealbutareunabletousethatskillforthecompany’sbenefit.WitharchaictechnologieslikemostERPpackages,employees’handsaretied.Theyareoftenpowerlesstomakeapositivecontributiontotheorganization.

Ane‐procurementplatformempowersemployeeswiththeinformationtheyneed–fromreal‐timeapprovalstatustoadirectcopyofissuedPO’stobeingabletoratesuppliersonthequalityofthegoodsandservicesreceived–toeffectivelymanagetheirpurchasesandcompletetheirday‐to‐daytasks.

MaketheCasefore‐Procurement

Getthemtounderstandthedifference!

• Wouldn’twebebetteroffgettingemployees’helpinunderstandingthewho,what,when,andwhyoforderingandhowtogetthingsdonewithgreaterefficiency?

• Shouldn’tourdedicatedpurchasingprofessionalsbemaximizingtheirtimeonnegotiatinggreatdealsandsteeringpurchasingpoliciesvs.re‐keyingordersandansweringstatusquestions?


Number 5. It isolates you from the outside world

YourmostrecentERPreportsshowthatyouwereabletoshave3.5%offyourquarterlyspendandyouthink“notbad,savingsomethingisbetterthansavingnothing”.Andmaybeitis,butwhatiftherewasthepotentialtosaveevenmore?

WithyourERPsystem,yourviewoftheworldislimited.Youcanonlycompareyourperformanceagainstyourhistoricaldataandallthatwilltellyouishowyouaredoingbasedonpastperformance.Whatitdoesnotprovideisinsightintowhetherornotyourperformanceisinlinewiththemarket,whichisessentialinordertogetaleguponthecompetition.

Howdoyouknowifyouaredoingagoodjob?

Youknowwhybenchmarkdatacoststhousandsofdollarstoacquire?Becauseitisdifficulttogetandwhenyouhaveitthevalueitprovidesisimmeasurable.Gettinganinsideglimpseofthecompetitionprovidesyouthecriticalinformationnecessaryforstrategicplanningandbeingabletostayaheadofthemarket.

WhenyourERPpackageishostedonyourdedicatedserverswithonlyyourinformation,youareisolatedandalone.Youareunabletoknowwhetheryourprocurementpracticesarecompetitiveorlagging.Sohowcanyoubeexpectedtotaketherightactionsthatwilldelivergreaterefficiencyandsavingsforyourbusiness?

Youneedtocompareyourorganization’sperformancetothemarket!

OneofthebiggestbenefitsofaSaaSprocurementsolutionisthatthereisasingularplatformthatalltransactionsareprocessedthrough.Andwhiletheplatformstillkeepsdataseparateandsecure,havingacentralizedsystemstandardizesthewaydataiscollectedandprovidesawaytoeasilybenchmarkperformancemetrics.

Thisaggregatedinformationempowersyoutoconstantlyassessimprovementopportunitiesbybenchmarkingyourprocurementprocessesagainstthemarketaverage.Byknowinghowyoucompare,youcanquicklysetgoalsandtargetparticularpartsofyourprocurementprocessforimmediateimprovement.


Helpthemunderstandgreatprocurementisaboutmorethanguessing!

• Howwillwesetaggressiveyetattainableimprovementgoals?

• Wouldn’tyouliketousemarketcomparisonswherewearelaggingtomotivatetheorganizationtochange?


Number 4. It blocks employees from saving money

Withtheonsetoftheinternetandnewtechnologies,globalcompetitionhasexplodedleadingtotherapiddevelopmentandreleaseofnewproductsandservices–drivingpricesdownandincreasingtheopportunitytofindabetterdeal.Pricescanchangeweekly,andinsomecasesevendaily.Itwouldbeimpossibleforanypurchasingorganizationtokeepupwiththesepricefluctuationsforeverycategoryofspend.Andbeinglockedintoasix,nineortwelve‐monthcontractwillnotincreaseyourchancestotakeadvantageofloweravailablepricesandthesavingsyoucouldachieve.

ERPande‐Commercedon’tmix

Beforeeverysupplierontheplanethadawebstoreandeverybodystartedshoppingonline,thewaytobuysomethingwastopagethroughathickcatalog,findtheitemsyouneed,filloutyourorderformwithallthethingsyouneeded,gettheorderapprovedandfaxitovertothesupplierforfulfillment.

ERPsystemsarejustastepupfromthisancientwayofdoingbusiness.Sure,youcanuseyourERPsolutiontomaintainalistof“ApprovedSuppliers”fordifferentcommodities.Youcouldeveninputcontractsforitemsatpreferredpricing.Butforcategorieswhereproductsandpriceschangequicklyyouneedadifferentapproach!That’sespeciallytrueinthisknowledgeeconomy,whichisincreasinglycharacterizedbyservicesbusinessesandindirectspending.

Empoweremployeestofindsavingsopportunities

Thereareafewcategoriesofspendwhereyourepeatedlyorderthesameitemstimeandagain,andpricesfluctuatelittle‐centralizedpurchasingcontractswithpreferredpricingmakessenseforthosetypesofexpenditures(likepartsforanassemblylineorsuppliesfortheoffice).Butmoreandmore,whatemployeesneedwillchangeday‐to‐daydependingonanorganization’sshortandlong‐termgoalsandobjectives.

e‐Procurementgoesbeyondthetime‐honored“approvedsupplier”mentalitytoleveragecrowdsourcingtofindthebestdeals.Withacrowdsourcingapproach,youremployees“doatworkwhattheydoathome”.Theyshoparound.Theycheckoutavarietyofvendors.Theyfindbargainsanddealsthatyourpurchasingteamisn’texposedtoandtheypurchaseatthelowestprice.Andthebestpart,you’restillincontrolandyou’respendisstillundermanagement,allwhilesavingfarmoremoneyandstayingontopofthemarket.


Givethemexamplestheyknowaretrue!

• Howmanytimeshaveyoupersonallyfounddealsonlinethatwerewaybetterthananoldcontractprice?

• Sneakuponthem:didyouseethatfantasticdealonOverstock?Nowaywe’resavingthatkindofmoneywhenpurchasingthroughourERPpackage!


Number 3. Your suppliers hate it too!

Youcanprobablythinkofahundredbetterusesofyourtimethanduplicatingefforts,rekeyinginformationandpushingpaper.Guesswhat,socanyoursuppliers.Themoretimethattheyhavetospendmanuallyprocessingpaperwork,thelesstimetheyhavetospendonstrategicinitiativesthatwillultimatelyprovideyouwithbetterproductsandservices.Notonlythat,butthemoreresourcestheyneedtodedicatetomanualtasks,themoreyouwillenduppaying.

YourERPsystemmakesyouacostliercustomer

Asageneralrule,themorehandsthathavetotouchaproductorserviceinordertodeliverittoanendcustomer,thehigherthecost.Sowhenyoursuppliershavetomanuallyre‐keyeveryPOyousendbecauseyouareusinganERPsolutionthatdoesnotallowyoutoautomaticallytransmittheinformationtheyneedtofulfillyourrequest,howdoyouthinktheyrecoupthosecosts?

Chancesarethoseadditionalcostsarebeingpassedontoyou.Andasyourpurchasingteamisnegotiatingnewcontractsandmorepreferablepricingtodeliversavings,theyarefindingitismuchmoredifficulttogetthepricedownifworkingwithyouisinefficient,complicatedandrequiresalotofhighoverheadresources.

Youwantsupplierstolovedoingbusinesswithyou

Withe‐procurement,supplierscanelectronicallyreceiveordersandsubmitinvoices.Noneedformanualre‐keying,highvolumesofphonecallsorfaxes.Usinganout‐of‐the‐boxAPIconnectororsomesimpleXMLyoucaneasilyenabletheseefficienciesandtakeadvantageofthesavingstheybring.

Inaddition,manye‐procurementsolutionsprovideawaytotapintosuppliernetworkswhereyoucanfurtherimproveyourabilitytoworkseamlesslywithyoursuppliers.Throughthesenetworkssupplierscanaccessanonlineportalwheretheycanmaintaintheircontactinformation,publishcontractitemsandpricestoyou,andevenconnecttheironlinestore.


HelpconnectthedotsbetweenERPsoftware,thepurchasingorprocurementorganization,andpoorsupplierrelations

• Aren’twetiredoflostordersandcrisisphonecallswithsuppliers?

• Wouldn’titbebetterifsupplierscouldreceiveorderselectronicallyandavoidanyre‐keyingmistakesintheirordermanagementsystem?

• Don’twedestroyourleverageincontractnegotiationswhenweregularlypaylateduetodocumentationandprocessproblems?


Number 2. It is completely stagnant

WhenERPsoftwarefirstburstontothesceneitssingularpurposewastoorganize,manageandreportonlargevolumesofdataforplanningpurposes.Andthroughtheyearsasnewtechnologieshavebeenreleasedandoldertechnologieshavereceivedafaceliftandbeenenhancedtomeetchangingbusinessneeds,ERPsystemshaveessentiallystayedthesame.Ithasn’tgottenanyeasiertousenorhasittrulyexpandeditsabilitytohandleotherfunctionssuchaspurchasing.SowhilemarketingmightrepackageyourERPsystem’scapabilitiestoseeminglyaddressaspecificneedlikerequisitioningorinvoicing,it’sessentiallyjustlayeringadifferentUIontopofanout‐dated,archaicERPtechnology.

Assolidasastone,andasunchanging

Accountingisatrickybusinessandonethatreliesonaccuracyandconsistencytobeeffective.Onceyou’vebuiltasystemthatbalancescreditsanddebitscorrectly,it’sbesttoleaveitalone.Andthat’spreciselywhatERPvendorsdo.

EveryfewyearsyourERPvendorwillreachouttoyouaboutupgradingyoursystem.Andwhileinmanyothersoftwareapplicationsthatmightmeanaddingnewfeatures,enhanceexistingcapabilitiesorevenmaketheUIabitmoreuserfriendly.ButintheworldofERPtheseupgradestypicallyconsistofbugfixesandnotmuchelse.

Howwebuyischanging,andyouneedasystemthatadapts

Ifonethingisclearintoday’s“new”economyit’sthis,businessasusualisnolongerbusinessasusual.Technologyhasdramaticallychangedthewaywedoeverything,fromhowwecommunicatewithoneanothertohowwegettheinformationweneedtohowwegetthegoodsandserviceswewant.

e‐Procurementcontinuouslyadaptstomodernbusinesspracticesandchallenges.Andit’sdeliveredasahostedsolutionviaSaaS,youarealwaysup‐to‐datewiththelatestinnovationse‐procurementhastoofferwithouttheneedofgettingyourupgradeonyourITdepartment’scalendarsincee‐procurementdoesnotrequireanyhardwaretomaintainorsoftwaretoinstall.


HaveanhonestconversationaboutthePurchasingcapabilitiesofyourERPsystem

• Whenwasitlastupdatedwithanewfeatureyoucaredabout?

• Howdifferentwasthesystem3yearsago?

• Howhasittransformedyourbusiness?


Number 1. It is built for accountants, not procurement

Let’sbeclear,ERPsoftwaredoeshaveitsplaceinanorganization;it’sjustnotinpurchasing.ERP’sstrengths–managinglargequantitiesofinformationandtransactionsandpullingsophisticatedreportsandtrends–makeitanidealsolutionforfinance.Justlikeyouwouldn’tuseaspreadsheettobuildyourwebsite,youshouldn’tuseERPsoftwaretomanageyourprocure‐to‐payprocess.It’snotwhatyourERPpackagewasdesignedtodo,anddoesnotprovideyoutherightfoundationtoempowersmarterspendingandlong‐termcompanysavings.

ERPpurchasingisaboutcheckingabox

ERPvendorshavetoofferallsortsofmodulestowinbusiness.Theyhavesalesforceautomationmodules,marketingmodules,HRmodules,andevenprocurementmodules.However,thosemodulesarerarelythereasonanyonepurchasesERPsoftware‐theyaren’tcompetitiveandneverwillbe.AndaslongasanERPsalespersoncan“checkthebox”andsaytheydoprocurement,they’refine.

Butwhyleavesomethingasimportantasmanagingpurchasesandsavingyourcompanymoneytoasimplecheckboxonalongorderform?Don’tyouandyourcompanydeservesomethingbetter;somethingguaranteedtogetyouontherighttracktosmarterspendingandsavings?

Transformingprocurementrequiresabest‐in‐classplatform

Procurementleadershaveambitiousgoalsthatincludesustainablemulti‐yearsavings.Andwhenprocurementsucceeds,businessesthrive,plainandsimple.Butwhenyouarebuildingyourprocessesuponthewrongfoundation,itishardtotransformyourprocurementeffortsintosomethingthatwillhaveasubstantialandsustainableimpactonyourbusiness.

UnlikeERP,e‐Procurementsystemsaredevelopedwithonegoalinmind:makeiteasyforthecompanytocontrolspendandsave.That’sit.Everyfeatureandfunction,fromthewayyouworkwithsupplierstohowyoubuytogetthebestpricespossible,arealldesignedtodeliversavingsforthecompany.Sowhynotinvestintherightplatformfromthestartandreallyseewhereyourprocurementeffortscantakeyou.


Helptheorganizationavoidbeingpenny‐wise,pound‐foolish

• Lookforexamplesinotherareas(i.e.HR,CRM,etc.)wherethecompanyhasmovedbeyondERPsoftwaretobest‐in‐classsolutions–highlightthoseareasanddrawparallels

• Askyourselfwhatyouwanttoaccomplishfortheorganizationoverthenext1‐2yearsandwhetheryou’rewillingtoriskyourreputationandcareeronyoursecond‐rateERPpurchasingmodule

• Organizeapilot/bake‐offbetweenCoupaandyourERPpurchasingmoduleandgenerateachorusofcohorts


Summary

Inthise‐bookwehavecomparedandcontrastedmanyofthedifferencesbetweenmanagingyourprocure‐to‐payprocessthroughyourERP’spurchasingmoduleandusinge‐procurement.WehavetalkedaboutwhereERPsystemswork(i.e.accounting)andhowtherearemanynuancesofpurchasing(liketheabilitytocrowdsourcebetterpricesandgreatersavings;ortrue,market‐widebenchmarking)thatitgenerallydoesnotaddress.Butifthereisonlyonethingyoushouldtakeawayfromthise‐book,it’sthis:

ERPsystemsweredesignedtoorganize,manageandreportonmassquantitiesofinformation–nottoempowersmarterspendingandsavings.Ifyouareseriousaboutsavings,youneedtoseriouslyconsidere‐procurement.

So,nomatterhowmanymodulesyourERPvendoroffers,orallthecompellingargumentsyouhearfromthevendor(andmaybeevenyourITdepartment)onwhyyoushould“standardize”onthem,bewary!ERPisthewolfinsheep’sclothingwhenitcomestohowcompaniesmanagetheirpurchasing.Whileitmightlooklikeapurchasingsystemandtheymightsayit’sapurchasingsystem,itismostcertainlyNOTthepurchasingplatformyouneedtopracticethetypeofsmarterspendingthatwillhavearealimpactonyourbusiness.

Learn More

ERP&ProcurementSystems

• InsideERP:MidmarketERPSolutionComparisonGuide

• SourcingInnovation:WhatisaSuccessfulERPImplementation?

• ESourcingForum:TheAgeofthee‐Perp

• SpendMatters:IsSaaSReallyCheaperthanOn‐Premise?Maybe,MaybeNot...

• CoupaTCOCalculator:ComparetheCostofOn‐Demandvs.On‐PremiseProcurement

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• YourFreeTrial


About Coupa Software

Coupaistheleadingon‐demandproviderofsolutionsthatcontrolandstreamlinepurchasingfororganizationsbeyondtheFortune500.Coupae‐Procurementdeliversaneasytouse,fasttodeployandaffordablesolutionforrequisitioning,purchaseorders,RFQs,inventoryandinvoicing,withnohardwaretobuyorsoftwaretolicense.Withdeepdomainknowledgeine‐procurement,abest‐in‐classsoftware‐as‐a‐serviceplatform,anetworkofmorethan2,300suppliers,andafast‐growingcommunityofcustomers,Coupaenablessmarterspendingpracticesthatallowcompaniestosavemoneyquickly.Formoreinformationpleasevisit,http://www.coupa.comorcall+1.650.931.3200.

Documents

Beware ERP: Expense & Regret Purchasing - Coupaget.coupa.com/rs/coupa/images/Expense-Regret-Purchasing-ebook-vFINAL.pdf · you’ll regret it! ... it’s rarely a convenient time