4 Reasons Why Your ERP Software Can’t Do It All
There’s a lot of pressure on today’s CIO. You’re trying to keep technology costs low and rationalize software usage across the company while procurement and finance teams are also trying to cut costs and tighten budgets. They might have already recommended a provider for your company’s spend management system and it might seem safest for you to suggest the Enterprise Resource Planning (ERP) vendor’s solution instead. However, that could be a costly mistake.
Your ERP provider’s solution is probably the result of an acquisition and they likely don’t have a great track record when it comes to integration, which means you’ll be the one left with the stress to make everything work. The ERP’s solution is likely a legacy platform, originally built for back-office functions, not end users, and chances are you’ll spend a lot of IT resources to maintain it.
Just as you wouldn’t rely on your ERP vendor to provide a Customer Relationship Management (CRM) or Human Capital Management (HCM) system, you shouldn’t rely on it to provide a dedicated Business Spend Management (BSM) system either.
Without a purpose-built BSM platform, businesses risk low adoption rates, more expensive fragmented solutions, and the additional complexity of their existing systems – trapping data in silos. After all, you can’t cut what you can’t see.
Consider these four reasons why your ERP software can’t do it all, highlighting the need for a comprehensive BSM platform:
1. Low user adoption
While companies may use ERP systems to provide a strong foundation for business operations, employees often struggle with their user interfaces, even for basic functions. This leads to a surge in IT tickets as users seek help for simple tasks. Naturally, employees seek the most direct way to complete their tasks so when faced with complicated processes, they tend to find shortcuts or bypass the system entirely especially if they’re not receiving the support they need. As the organization grows and hires new employees, significant time and resources are spent training them on the specific systems and technology your company uses. Unfortunately, if these new team members see established colleagues bypassing cumbersome tools, adoption rates only decrease further. When this happens, employees oftentimes just buy what they need and expense it back, or they’ll manage contracts in spreadsheets which only gives visibility to the few people who are familiar with them.
This enables poor visibility and bad spending habits. To truly take command of your company’s resources and productivity and improve ROI, businesses need a strategic extension to their existing ERP infrastructure that’s easy to use so people can find what they need and get it approved. This extension should simplify and streamline the procure-to-pay (P2P) process for both employees and suppliers and provide approvers with real-time insight into budget implications before making any financial commitments. It should be a seamless addition that empowers employees while fortifying the financial backbone of the organization.
2. Increased IT complexity due to multiple systems and solutions
If your ERP provider’s software doesn’t meet the needs of the procurement team, they’ll end up finding their own solutions. The most likely situation will be a patchwork of point solutions, systems, and custom-made apps — Excel sheets for contracts, Access database for projects, and the ERP’s solution for invoices. This results in more rogue spending and poor data visibility. When a vital team member leaves the company, you also risk losing the knowledge of how the patchwork of those systems is managed, and others will look to you to fix the issues. If you’re not able to see or control the solutions that are being purchased, how do you ensure your budget stays on track and that the company’s needs are being met for today and tomorrow? After all, many companies outgrow their ERP and its solutions.
It’s also natural to think that because different systems have the same vendor name attached to them, they’ll work well together. But that’s not the case. For some big ERP providers, the products they have acquired aren’t integrated, even after many years. And when they don’t work well together, the lack of support and service from big ERP vendors will leave you with the added stress of figuring it out and cleaning up the mess.
It’s likely your ERP provider offers a variety of spend management solutions, too. But it’s just as likely those systems will need a lot of input from you to integrate, and with their different code bases and upgrade schedules, you might start the next upgrade as soon as you’ve finished the last one. Support for these free tools is non-existent in many cases, too.
In contrast, a single BSM platform that’s easily integrated with other systems is built to grow and flex with you, covers every P2P need, and provides a friendly interface to encourage its use to give you complete control over where and how data gets created, used, and stored.
3. Little flexibility for changing circumstances
As your company grows and expands, acquisitions are expected. The acquiring company may have different tech stacks, development frameworks, or coding languages. Meanwhile, your company could be using legacy systems that are outdated or incompatible with an acquiring company’s newer technology. Plus, managing these different licenses and support contracts can become complex after acquisition. This leads to obvious challenges in integrating systems, sharing data, and ensuring seamless operations. Merging IT infrastructures also poses significant security risks, including security breaches and data loss, if not managed properly.
With acquisitions expected, especially during times of rapid growth, organizations need a flexible, user-friendly, and easily configurable platform that makes integrations easy. The platform must be scalable, secure, and agnostic to other systems and processes to harmonize your technology, rather than complicate it.
4. Lack of innovation
Legacy ERP systems that rely on outdated technologies and architectures limit their ability to adapt to modern business needs and integrate with newer technologies and APIs. These systems may also have rigid structures that make it challenging to customize or configure to unique business cases and processes. This leads to manual workarounds and inefficiencies. Maintaining and supporting legacy systems is also costly, especially if frequent upgrades and specialized skills are needed. This further strains IT budget and resources.
Not to mention, new technologies like AI and machine learning are transforming business operations. In order to stay competitive, IT leaders need a system that’s constantly evolving and leveraging these technologies effectively.
They need a specialized platform that’s constantly innovating based on emerging industry trends and customer feedback. In addition to customer feedback, a best-in-breed solution should also use AI to provide prescribable insights and analytics.
Easily integrate and extend your ERP with Coupa’s BSM platform
At Coupa, we understand that you may have a knee-jerk reaction when it comes to new software. After all, the company expects you to be effective stewards of IT budget and resources, but you might have been burned by bad implementations and unproven return on investment (ROI) before. We also understand time and resources are limited, which can add difficulties to extending your critical ERP. That’s why our comprehensive platform is built with IT in mind. We have pre-built ERP connectors, no-code configuration, and open APIs to tackle a simple, one-time integration with multiple ERP instances. With our easy-to-use platform, you’ll also drive adoption for teams who have unique spend management needs and achieve higher rates of spend through the system, giving you the visibility to cut costs, software redundancies, and inefficiencies.
Coupa’s unified platform can not only extend your ERP investment and accelerate digital transformation, but it can also help you achieve your overall business goals whether it be increasing user and supplier adoption, futureproofing your tech stack, improving operational efficiency to boost profitability, or freeing up resources to pursue other company initiatives. With these benefits, Coupa is the proven, low-risk option with an accelerated Time to Value and predictable ROI.
Discover why analysts agree about the benefits of Coupa’s platform.
"As opposed to many traditional IT projects that are labor-intensive and require a lot of IT expertise, the implementation of Coupa just didn’t. As most of the IT organization, in fact most of the business, was focused on this big difficult ERP implementation, a very small ninja group of business people and a couple of IT guys got together and implemented Coupa almost overnight. It was just that simple."
Learn more about how you can add business value instead of complexity and costs with Coupa’s BSM platform.
Download our CIO’s Guide to Business Spend Management