Are Best-of-Breed landscapes emerging as the new Suite?
New trends taking hold
On Wednesday 23 September, I had the fortune to be able to attend a webinar hosted by Procurement Leaders, featuring speakers Frank McKay and Clement Duquerroy, respectively CPO of Jabil and CPO of Accor Hotels, on the topic of ‘Best-of-Breed vs. Suite ProcureTech.’
As a representative from the best-of-breed software side, it was welcome news to hear that the most recent research from Procurement Leaders confirmed that the general trend is now clearly towards best-of-breed landscapes – and that sentiment data has significantly changed since 2014 when they ran a similar study, in which it was found suite options were favored. It was also encouraging to hear the results being further validated by other CPOs on the call.
As such, I wanted to share a few key comments and insights from the session.
Larger and more mature organizations driving the trend
Not surprisingly, it is the larger and more mature organizations that are driving the trend. They have not only experienced first-hand the short-comings of the single suite, but also have more complex requirements across Source-to-Pay than what a single suite solution can handle.
Most suites, despite claiming to offer a ‘one stop shop’, are not really integrated at all, but rather are based on different architectures and solutions that have been acquired over time. The general advice is: Don’t fall for the marketing pitch from suite sales executives that a suite is ‘seamless’ across all their suite modules. Most aren’t – and they do not always work well within the suite itself, let alone in combination with external solutions.
As the discussion from this webinar validated, the case for best-of-breed is getting stronger and stronger in the quest to gain end-to-end visibility, as the consensus is that suites are failing in this.
Objections to overcome
Moving towards best-of-breed can led to tension with IT, who often still see tech investments through an IT lens, rather than through the eyes of stakeholders or users. This places an increased emphasis on Procurement’s need to be able to articulate the scope of its requirements and win against the typically IT-led argument around architecture simplification and integration, which in today’s world is much less of a relevant objection. Depth of core features and user friendliness are key decision factors when choosing best-of-breed.
Interestingly, the trend in solution architecture within more mature organizations is towards IT becoming more stakeholder-led. Mature companies are adopting an IT business partner model, with the objective of helping the business to acquire solutions that meet the stakeholders’ needs, with IT itself focused on ensuring that the solution integrates well into the enterprise architecture and that it meets security standards.
Return on investment
Among the many encouraging conclusions from the webinar, from a best-of-breed perspective, was the ever-increasing validation that decisions to go down the best-of-breed route have been providing significantly higher return on the investment. The reason: they target specific challenges more effectively.
On a personal note, this is also clearly evidenced by the valuation that best-of-breed based companies are achieving compared to single solutions that are claiming to be good across the board.
The most powerful point made in the discussion was around what is often the main challenge in technology investments, namely user adoption and usage frequency. The panel argued that, with best-of-breed solutions, they achieve much greater success against these two factors, which are very strong selling points of moving towards best-of-breed landscapes. But don’t just take my word for it, you can listen to the playback of the webinar for yourself.
Any comments welcome in what is such a relevant and important topic for Procurement at the moment.
Finally, thanks to Procurement Leaders for an insightful webinar and for sharing the interesting research stats from the comprehensive investigation into this topic – and for bringing in the CPO viewpoints, which, given the practical experience that they have had to inform their views, is hugely valuable.