In part one of this two-part blog series, we talked about the need for Procurement Performance Management and the approaches that teams may consider for achieving its benefits. Some organizations may try to piece together a solution from existing tools or create one in-house, building their own platform as opposed to buying one.
However, there are many critical considerations in the build vs. buy decision process that are overlooked, with hidden costs and burdens that may emerge later for those who embark on a build-it- journey. Time to ROI and long-term costs of carrying the solution are two examples of measurements that should be assessed before a decision is made.
Per Angusta has worked with more than 130 global procurement teams to implement our Procurement Performance Management (PPM) platform in the past decade. In that time, we have learned a lot from those customers about driving solution value and helping companies navigate this debate.
Here’s our recommended seven-point checklist to evaluate whether buying or building a PPM solution is the right choice:
1. Does your procurement team have the capacity, experience and resources available to guide the development of a Procurement Performance Management software solution?
Procurement teams are often trying to manage tactical and strategic initiatives and many are struggling to meet organizational demands without additional resources. It is unlikely they can (or should) divert time away from critical tasks. Even if your procurement team isn’t maxed out, they specialize in purchasing and building supplier relationships – not software solutions. It is unlikely that your procurement team will be able to successfully guide IT, having never been through a process of this magnitude before.
2. Is engineering truly up for the mission?
Just because engineering can build something doesn’t mean they should. It also doesn’t mean they are available when you need them to be, so your project must be prioritized relative to other organizational needs. Yes, your engineering team may have expertise in technical development, but they won’t have a product development background that is specific to procurement and can’t bring PPM best practices to the table. It’s also likely they may be lacking the exact set of technical capabilities needed to execute procurement-specific software development.
3. Will you be able to integrate with other solutions as needed?
A good Procurement Performance Management solution also makes use of your other procurement data, and integrations are key for that to be successful. Are you able to build the integrations you need to make your solution successful? This will involve collaborating with other vendor applications and building the technology needed for a frictionless connection.
4. Are you prepared to devote the time to deployment, training and documentation?
Building the solution is only half the battle. Once that is complete, you need to deploy your solution, train your users, and create documentation for ongoing usage. All of that further burdens your already strained resources and piles on additional costs.
5. Are you prepared to maintain your solution on an ongoing basis?
All tools need to be maintained and updated to ensure that you can continue to support the needs of your procurement team. After deployment, you will need to ensure you have the internal resources to scale, update, ensure uptime, and make enhancements based on new business needs, also further adding to the overall cost of your solution. As an example, how will new feature requests be handled and prioritized in the future, alongside other organizational demands?
6. Can you ensure that you are configuring the appropriate data security measures?
You will be expected to maintain data security to a standard with will protect all client, supplier, and internal business information. This can be a difficult task even for teams that are dedicated to security. Integrations with other applications must meet security standards as well.
7. Last but not least, how much will it ultimately cost you?
To truly evaluate the cost of your bespoke solution, you’ll need to consider the following.
- How much will it cost IT to develop and implement the solution?
- How much will it cost procurement resources to help gather the requirements and define their needs?
- How much did it cost for internal teams to deploy the solution and train users?
- How much will it cost procurement and IT resources to manage this solution over time?
- How soon can the solution be available to users, and what is the “lost opportunity” cost associated with waiting until then?
Building your own solution is likely to tax your in-house teams too much, and you may end up with a solution that doesn’t even do what you actually need it to do and which doesn’t incorporate best practices from other PPM-driven organizations. Buying a dedicated solution like Per Angusta has so many benefits for companies.
- You get a solution that is ready to deploy in days.
- You get all the functionality needed by procurement teams without using any internal IT resources.
- You have the use of a purpose-built platform that is 100% dedicated to PPM.
- You gain access to ongoing user support and platform enhancements.
- Data security measures are already built into the platform.
- As a cloud-based app, new product enhancements that continuously promote PPM best practice are immediately available to all Per Angusta users.