Why Free Spend Management Solutions Aren't Really Free

Read time: 10 mins
Why Free Spend Management Solutions Aren't Really Free

What do you think when you hear the word "free"? How about zero cost? You may want to think again.
If you ever hear "free" in the context of an enterprise resource planning solution (ERP), you can be sure those solutions aren't going to cut it. The costs are likely to be much higher than you think, especially compared to a dedicated, specialized solution.

Key takeaways:

  • Don't fall into the trap of getting your organization tied up by free solutions.
  • Specialized platforms are more efficient, flexible, and they can prove their ROI.
  • The best practice is to leverage Business Spend Management (BSM) solutions before you try the "free" ERP spend add-on.

The ugly truth about "free"

There's no such thing as a free lunch, and there's certainly no such thing as a free Business Spend Management solution. That's the ugly truth.

There are two major problems with tacked-on spend management tools

The problem with so-called free solutions is that ERP software providers want their customers to believe there's a "one size fits all" solution to every business resource problem. After all, they offer a generalized platform with plenty of back-end customization.

Unfortunately, there are a couple of problems with this when it comes to Business Spend Management. First of all, full control over spend across an entire organization goes well beyond the scope of an ERP.

Part of the issue with scope is the way that software providers built these products. Many of the biggest ERP vendors only recently started doubling down on their off-premises-only approach.

The relationship between business spend management and CRM, ERP, and HCM

Second, because BSM extends the value of an ERP, it means the ERP’s spend management capabilities are often little more than an afterthought. Service providers tend to throw in basic functions to support a claim that the platform has a specific capability, to prove a use case, or for other basic goals.

The bottom line is that these add-ons are not an ERP's primary function. And just as ERPs aren’t used for customer relationship management for the selling side of the house, ERPs aren’t a fit for Business Spend Management for the spending side of the house.

You spend a lot of money to build yourself into a corner

Think about BSM in many of the big ERP suites. Sure, you can often hack the free spend tools of these platforms to get them to do what you want, but is it worth it?

More often than not, the free procure-to-pay (P2P) tools only support narrow use cases, and even then with varying levels of success. Further, they aren't usually configurable to the needs of your organization. The end result is typically a lack of insight into spending and gaps in financial controls.

In our experience, "free" is never worth it. Companies spend way too much trying to make a free tool function when they could just use a highly configurable platform to immediately get everything they need.

In the best-case scenario, you manage to put together a system that works by cobbling together various tools. However, in addition to all of that development time and money, you end up spending resources on break-fix and maintenance, too.

For all those resources — you only get basic functionality

The real tragedy is that, even with considerable ongoing customization efforts, the so-called free tools in an ERP still fail to perform up to Coupa’s standard. The hack job never matches the a platform’s real-time, multi-dimensional forecasting capability, and, as we mentioned before, it costs much more to build and maintain in-house.

The basic purpose of spend management tools is to get all of the right information to your decision-makers. If you implement Coupa, as opposed to building out a free option, you typically spend less money, have higher employee adoption, unlock unprecedented visibility into spend, and start delivering higher-quality insights faster.

The matchup: Coupa's holistic platform vs. free ERP solutions

Free ERP solutions may seem tempting at first but they sacrifice the functionality and flexibility needed as your organization grows and requires strong controls over spend.

Coupa is a cloud-native solution that understands an expanding business’s needs and is built to integrate with all of the enterprise software tools of complex organizations on a global scale. Businesses use Coupa’s platform to become more financially fit and manage all the ways a company spends money — through procurement, invoicing, expenses, and payments — as well as the related processes to initiate, control, and optimize this spend.

If there's still any doubt in your mind as to the overall benefits of Coupa vs. free ERP add-ons, a quick comparison will put it to rest. Spoiler alert: a source-to-pay platform like Coupa outperforms ERP, in addition to being easier to use and costing less in the long run.

Stronger data and operational security

A chain is only as strong as its weakest link. In a system involving various different solutions and blind spots, you have a lot of different risk profiles.

With Coupa, built-in automation and workflows help control risk from the very start. These are things that you might have to engineer into a "free" ERP solution.

Most enterprises deny employees the ability to modify any aspect of the implementation without opening a tech ticket, for example. This provides a clear record of all processes, requests, and ownership over actions and decisions. Whether you're performing an audit or backtracking from an adverse change, that's a valuable record to have at your fingertips.

Better spend behaviors

You want to encourage good spending behavior — within reason. An easy-to-use, highly granular, holistic platform like Coupa makes it much more attractive and straightforward for employees to utilize their budgets for events, team-building exercises, education, and other clearly defined, productivity-increasing spending.

If employees have to memorize and then wade through multiple different spending portals or solutions — or even if they have to use an unattractive, clunky interface — they're less likely to spend through official channels, which translates to poor employee adoption.

Quick control over rogue spending

If you need to get spend management in place quickly, then a platform like Coupa is your best bet. There are predictably short timelines to reach full implementation and employee proficiency, so you don’t miss opportunities to control rogue spending during spin-up.

Eliminate training requirements altogether for certain workflows

If you have a patchwork of different systems to manage spend and control costs, it's likely that some of them directly interface with users. In other words, they might look for manual user inputs.

Coupa makes spending money more manageable on an organizational level. The great part is that it eliminates manual tasks that before would have required training for everyday users. It targets inefficiencies so you can cut costs without cutting functionality.

Coupa provides configurability to empower key stakeholders who need insight into and control over spend. Additionally, a whole range of automatic processes and workflow customization supports the employees who just need to spend money: people who need to buy software for their team, swag for a project, or supplies for an event, for example.

Enjoy a rare combination of control and intuitive user-friendliness. It's all made possible by Coupa's holistic view of enterprise data and system-wide process integrations.

Automate manual tasks and eliminate errors

Because Coupa enables a comprehensive view of your business spend, it's much more effective at eliminating manual processes and potential errors that can be detrimental to teams like accounts payable (AP). For example, inefficient processes manifest in paperwork overload, duplicate payments, and late fees as your AP team struggles to track down purchasers, pricing, and receipts, in addition to the ongoing wait for approvals. Getting suppliers to stop sending the paper invoices that are swamping AP and move to electronic invoicing has clear benefits, but it can be extremely difficult to achieve with an ERP system that only provides a one-size-fits-all way of doing business.

This can all be fixed through automation with a P2P platform like Coupa. Because our platform provides suppliers with multiple options for electronic transactions, while more efficiently handling paper for those who simply can’t avoid it, it makes it quick and easy for them to get started. Such automation can improve operational efficiency in spend-related processes end to end, from supplier onboarding to invoice and vCard payments.

Plus, you can quickly catch potential issues, errors, and much more. For example, you can set minimum limits; if a spend event reaches a specific dollar level, you can automatically flag another department into the approval flow to comply with anti-bribery laws or other compliance regulations. You can get the right documents to the right people — without any thought, manual emailing, or file management on the part of your employees.

Configurable dashboards (not different tools)

One of Coupa's main strengths is that everyone in your organization can pull critical spending data. Your executives, executive assistants, accounting teams, and marketing teams all need different information, and a custom dashboard is an excellent way to do this.

In contrast, some free ERP solutions might have you implementing different tools for these different processes. There's much more room for error in that paradigm, both on the human and technical sides. A fragmented solution divides and complicates, leaving data stuck in department silos — Coupa unites and clarifies, enabling better decisions and more successful business outcomes.

Coupa isn't free — but it pays for itself

A dedicated BSM tool like Coupa is simply the right tool for the job. This means that even though Coupa costs money, our experience with clients has shown us that it might as well be free, because it can pay for itself quickly. You probably hear that type of claim a lot when you're trying to select business software, but remember the exact context of the discussion here.

bar graph of the Impact for a representative $1.0B revenue company that has done a full S2P transformation

It goes without saying that Coupa can pay for itself — and more — in terms of organization-wide cost reductions. Our clients focused on cost control choose us for that exact reason. In other words, they've done the numbers and made a detailed forecast of their probable ROI.

However, overall cost is not only what we're talking about. Coupa pays for itself specifically in relation to the half-measure free solutions from your ERP.

Coupa is built to work efficiently with minimal configuration or development. You will ultimately spend much more money operationalizing a “free” ERP functionality than you would using our purpose-built, fully supported platform.

The bottom line is that we've already done all of the heavy lifting to facilitate implementation and integration of BSM at scale.

Target your cost-cutting process

Coupa is an ideal spend management tool because it has a holistic, dynamic perspective on your organization that you want. In addition, the platform also has real-time visibility into every dollar you spend, every invoice in your system, and every piece of inventory you move.

This precise data enables you to take targeted action to reduce spend. Coupa's highly detailed insights let you go in with a scalpel, slicing off unnecessary expenditures without affecting operations. Free solutions and traditional practices, on the other hand, have about as much accuracy as a hacksaw.

See your business potential in action by scheduling a demo

Are you ready to harness the power of accuracy, usability, and efficiency in your cost reduction tool? High-performing organizations save an average of over 6% of their business spend with Coupa.

See why 3,000+ customers trust Coupa’s user-friendly platform for their business spend management.

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