Build Vs. Buy Part 2: Choosing Your Path to Procurement Performance Management

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. 

SpendHQ has worked with more than 500 global procurement teams to implement our Spend Intelligence and Procurement Performance Management (PPM) platforms 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 digital procurement solution is the right choice:

1. Does your procurement team have the capacity, experience, and resources to guide the development of a digital procurement solution?

Procurement teams are often trying to manage tactical and strategic initiatives, and many struggle to meet organizational demands without additional resources. It is unlikely they can (or should) divert time away from critical tasks. Even if your team isn’t maxed out, they specialize in procurement 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 task?

Just because engineering can build something, that 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 may not have a product development background that is specific to Procurement. That means they may not be prepared to include critical spend intelligence and PPM features that you need for success. 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?

As SpendHQ’s Chief Product Officer Pierre Laprée explained on a recent webinar with Archlet Founder Lukas Wawrlra, the best procurement solutions aren’t solitary pieces of software. Quality spend analytics solutions rely on ESG and supplier risk data enrichments. PPM solutions are at their best when they make use of data from other parts of your ecosystem. In other words, integrations are what set today’s digital procurement solutions apart.

Building these integrations will involve collaborating with other vendor applications and building the technology needed for a frictionless connection. If you can build them internally, you may be able to create a solution that fits your organization like a glove. Otherwise, you could miss out on critical data or efficiency improvements.

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. Driving adoption of a new digital procurement solution can be a full-time job itself. While we want to be fair to the idea of building a solution in house, deployment and training will become yet another drain on your resources and budgets.

5. Are you prepared to maintain your solution on an ongoing basis?

All software 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, and ensure uptime. You’ll also need to make sure the tool matures with your procurement organization. While building a solution gives you the ultimate flexibility, it also demands that you stay consistently flexible, creative, and open to industry changes long-term. You may find that you’re focused on solution management instead of procurement management.

6. Are you ready to configure data security measures?

Cybersecurity is more important than ever before. You will be expected to maintain data security to a standard that will protect all client, supplier, and internal business information. This can be a difficult task even for teams that are dedicated to security. Your integrations with other applications will need to meet security standards as well, making data security a hefty requirement. 

7. How much will your solution cost?

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 will 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 heavily, and you may end up with a solution that doesn’t even do what you actually need it to do.  If you want to avoid these inherent costs and challenges, then investing in a dedicated best-of-breed solution like SpendHQ’s Spend Intelligence or Procurement Performance Management is the most efficient choice.  

• You get a solution that is ready to deploy in weeks.
• You get all the functionality needed by procurement teams without using any internal IT resources. 
• You have the use of a purpose-built platform.
• You gain access to ongoing user support and platform enhancements. 
• Data security measures are already built into the platform. 
• You’ll have access to 40+ data and process integrations from companies like Darkbeam, Supplier.io, Coupa, and SAP Ariba
• As a cloud-based app, new product enhancements that continuously promote best practices are immediately available to all SpendHQ users. 

Focus on delivering results, not technology. Schedule a demo with us today to better understand how Spend Intelligence or PPM can streamline your path to strategic value.