Archive: November, 2016

SaaS: less banging and more touchy feely

If you wish to transform your organisation’s procurement capability then the answer may be to invest in a new source-to-pay (S2P) solution. There are a few enterprise software solutions – where the software is installed on your organisation’s servers – still available. By contrast, software-as-a-service (SaaS) or cloud based solutions – where you “rent” the software which is hosted “in the cloud” and accessed via the internet – are numerous.

The spectrum of SaaS is wide from Coupa which offers spend management only to Oracle which offers, well, almost everything (for a price).

So how is a SaaS different? Here are four distinguishing factors:

  • Consumerisation: unlike enterprise software, SaaS is a multi-tenant environment where the processes have been consumerised to meet the needs of many organisations. Customisation is simply not possible which means that your organisation must change the way they do things to fit the SaaS process
  • Reporting: creating reports requires a scan of the entire database.  SaaS tends to limit the kind of reporting available
  • Installation and upgrade: for a typical SaaS offering, the database software itself is installed and ready to run the instant you sign the contract. But don’t be fooled because there is still a lot of work by a systems integrator (SI) and the customer on data conversion, configuration and training
  • Price and cash flow – SaaS offerings spread the cost over the lifetime of the solution, for example, 7 years

SaaS offers procurement significant benefits, including:

  • Greater spend under management, improved savings and higher compliance through a more integrated end-to-end process
  • A more connected network of buyers and sellers collaborating and sharing real-time data
  • Greater options for financial management of the supply chain that can improve working capital and reduce cost and supply risk

These benefits will not be delivered on their own:

  • To drive adoption, Procurement must understand the human interaction points and ensure that everyone does their bit. Furthermore, there is much greater use of standardised catalogues and documentation. Change management skills in Procurement will be critical to success
  • Procurement must align its roadmap with digital and mobile within the whole organisation. Most business users will ask for mobile approvals, mobile time and expenses, and more hands-off processing. Procurement will have to become tech savvy
  • While the systems delivers the processes, Procurement will be required to analyse a much greater volume of data and deploy a variety of techniques to drive performance. Procurement’s role will be less banging the table and more touchy feely where communication, facilitation and project management are key skills

SaaS will disrupt traditional procurement strategies. Furthermore, it will demand new skills. But the rewards will be significant.