The Era of Best of Breed Solutions: Experts Weigh In
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One of the greatest advantages of working with best-of-breed vendors compared to solutions provided by single suite vendors is that best-of-breed vendors are focused on solving specific use cases within specialist areas, which means that the expertise that they can provide in relation to that area is especially strong. For this reason, there has been significant growth in establishing hybrid best-of-breed and suite environments, rather than pursuing a more traditional 100% suite approach.
What Are the Benefits of Best-of-Breed Procurement Solutions?
Benefits of practitioner knowledge
As Pierre Laprée, CEO of Per Angusta points out, best-of-breed solutions are frequently built by procurement practitioners for procurement practitioners. “The fact is within a lot of the big suites, the incumbents and the legacy players, few have ever been really close to what Procurement is and the result is that these things have been built by people with no real procurement experience, or second-hand procurement experience. So, they are brilliant pieces of technology, don’t get me wrong, but to me, as a former practitioner, it always feels slightly disconnected from my day-to-day reality.”
On the other hand, being able to tap into practitioner knowledge means that a specific issue can be addressed more rapidly and with greater success. Costas Xyloyiannis, CEO, HICX explains, “With best-of-breed, you’re getting a specialist who has thought through an issue with a lot of other customers, saving you a lot of time. So, you are accessing this specialist knowledge. What this will also translate into is better user experience and adoption.”
Why the ‘best-of-breed versus single suite’ mindset is wrong
Adopting best-of-breed is not the same as a rip-and-replace of existing P2P or ERP systems.
Costas points out, “People have probably used a number of suites and there is a place for the suite, I wouldn’t argue against that. […] It definitely isn’t a one or the other because they themselves actually are best-of-breed at something.”
The issue comes when trying to extend the single suite to cover use cases for which they are not optimized. It is this approach which has been hindering advancement in Procurement. As Dr Elouise Epstein, Partner at Kearney, maintains, “Traditional technology is wholly inadequate to support the digital evolution. There is a mountain, an overwhelming amount of evidence, to say that the way we’ve done it in the past doesn’t work. Kearney is one of the leading management consulting firms in the world. You don’t hire us to implement one of the traditional providers. You only hire us when there’s either a huge opportunity or a huge problem. And I’ve built my career coming in off the back of failed implementations. So, I have seen this, it’s abundantly clear that we have to do something different.”
This drive towards finding a new approach has opened up the market, as Pierre Laprée confirms, “As a result, we’ve seen more solutions that have been addressing very specific needs, very acute pains on the market that were not properly fulfilled by the suite vendors.”
Community of experts
To find out more about vendors in the best-of-breed space, we decided to share some of the insights from conversations taking place between the leaders of the some of the organizations that are capitalizing on the growth in this marketplace as part of our most recent best-of-breed webinar series, which included Pierre Laprée of Per Angusta, Sammeli Sammalkorpi at Sievo and Adriano Garibotto of Creactives.
Pierre was working as a Procurement Director at Adecco when he identified a gap in the market and started building Per Angusta, which is a SaaS-based Procurement Performance Management solution, which, as he describes is ‘built by buyers, for buyers’.
Sammeli Sammalkorpi was keen to fix procurement analytics problems, which is why he co-founded Sievo in 2003. Today, Sievo is a ‘best-of-breed spend analysis solution combining procurement expertise and machine learning for more reliable spend visibility,’ and manages more than $850 billion spend annually. Speaking about the growing market for best-of-breed solutions, he explains, “Because of cloud, because of APIs and so forth, it is feasible for companies to complement transactional process systems with these best-of-breeds.”
Adriano Garibotto is Chief S&M Officer at Creactives, which is focused on helping ‘global procurement and supply chain teams to cleanse, enrich and harmonize their data’ through the use of AI. He explains that, due to the complexity of modern Procurement processes, handling them manually is impossible and inefficient. “This is the reason why artificial intelligence comes to the stage in this specific area. If you want to really have a real understanding about what is going on in your procurement, in your stock management, in your processes, you need to know exactly what you are buying. To do so in large corporations, artificial intelligence is the only option,” he adds.
A common theme across all the conversations was the importance of robust data. On the topic of data, Dr Epstein points out, “We have, as a procurement function, skated by, ignoring data for too long, or just taking a very narrow sliver”. If Procurement problems are to be solved, the data foundation needs to be sorted first.
Costas Xyloyannis co-founded HICX in 2004, as he experienced first-hand the burden of bad supplier data on both buyers and the suppliers. As a result, he worked on building a low-code platform with a single-entry point for data which removes the need for supplier management through manual processes such as Excel. Costas champions the need for this single-entry point for information to provide a single source of truth for supplier data. This makes procurement operations easier and more efficient, allowing for visibility which otherwise wouldn’t be possible. “For me it’s vital that, if you want to operate efficiently at scale, you have a single source of truth. I think it’s very difficult otherwise to run digital initiatives or automation without having that foundation,” he states.
Adriano Garibotto says that the consciousness around the importance of good data quality has been growing for the last ten years. He believes good data is crucial to the success of procurement processes. “In the last years with more and more sophisticated processes supported by those platforms you require more sophisticated fuel, and the more sophisticated fuel is the quality of the data,” he explains.
A foundation for innovation
Costas remarks that, “the key takeaway is how best-of-breed is an innovative ability. There are a lot of facts out there to show that the old way isn’t working. We’ve also seen that best-of-breed is going to happen. So, you can either plan for it, or let it happen. But it’s going to be much more successful if we are planning for it.”
One of the ways of planning for it, is making sure an appropriate strategy is in place. Experts warn randomly buying multiple software is not a best-of-breed strategy. Although they may be new and exciting, they may or may not fit the overall goals of the organization.
Sammeli Sammalkorpi explains how the approach differs from having single vendor suite providers. “With best-of-breed, you actually need a strategy. I think with the suite it was easier to put your hands up and say now the suite provider takes care of everything and I just pay the bill. The best-of-breed strategy requires more attention and thinking from Procurement on how to drive it. I think it leads to much better solution as well, but it does require more responsibility by the practitioners.”
Costas highlights the importance of being selective and explicit with the requirements, as that will be much more effective, efficient and profitable in the long run, which comes back to data. “People connect with this view that ‘Oh, I went and bought a bunch of random point solutions, hence I have a best-of-breed strategy’. Well, no, you don’t. That’s not what best-of-breed strategy is. It’s not buying random solutions and then saying, ‘We’re best-of-breed’. The idea is that you’re explicit, and you have a strategy. What does it mean to do that? Well, we need to have some kind of data foundation for this, particularly concerning master data.”
Transparency, Collaboration and Agility
With the right data foundations, best-of-breed solutions are providing more options and therefore exciting new opportunities for Procurement to improve transparency, drive collaboration and become more agile.
It is heralding a new era for Procurement, putting it at the forefront of some of the biggest challenges facing organizations and calling for more cross-functional collaboration than ever before.
To watch the webinars, check out the related resources below, and connect with practitioners through their LinkedIn profiles:
- Sammeli Sammalkorpi, CEO of Sievo
- Adriano Garibotto, Chief S&M Officer at Creactives
- Dr Elouise Epstein, Partner at Kearney
- Pierre Laprée, CEO of Per Angusta
- Andrea Sordi, Clinical Professor at Haslam College of Business
- Costas Xyloyiannis, CEO of HICX.