Should you insource or outsource your e-procurement solution?

Choix internaliser ou externaliser
July 8th, 2021
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The health crisis has highlighted the need for companies—and procurement departments in particular—to accelerate their digital transformation. Their agility, productivity and resilience are all at stake. For procurement departments, one of the first steps towards digitalisation involves setting up an e-procurement solution. By dematerialising the transactional process, e-procurement solutions can cut indirect costs and also improve visibility in terms of expenditure. However, this type of project begs an important question: Should you insource or outsource your e-procurement solution?

How do you choose the right e-procurement option?

Generally speaking, there are two ways of implementing an e-procurement solution within your company:

  • Insource: If the company has the necessary skills and resources internally, it can rely on its own IT department. With this solution, the company's information system (ERP) must be compatible with its supplier's system.
  • Outsource: Alternatively, the company may turn to external partners. This option may require a significant financial investment (depending on the volume of orders/invoices) but it also offers a faster rate of digitalisation. On top of this, outsourcing this service can actually help companies access suppliers that are already working with these various partners more quickly.

To make the right choice, it's a good idea to carry out some market research from both a technical and a financial standpoint. Some suppliers may also support companies in offering advice.

Who are these external partners?

There is quite a wide range of players known as procure-to-pay partners. These include firms such as SAP Ariba, Coupa, Ivalua, JAGGAER, Proactis, Synertrade, Basware and Tradeshift. Each company has its own unique features and benefits. Some are more source-to-contract or procure-to-pay orientated, while others specialise in specific industries or even types of company.

These players also face a new challenge in the form of marketplaces. In this case, we're talking about software used to build a marketplace as opposed to multi-vendor e-commerce sites. Having previously had a business-to-customer focus, these companies have taken a turn towards business-to-business. Examples include Mirakl, Wizaplace and IZBERG, who offer their key accounts a marketplace for internal users, with products and suppliers that have been negotiated by procurement departments. These marketplaces are particularly successful in terms of user experience, but there is still some room for improvement when it comes to procurement features.

Whether you choose to insource or outsource the implementation of your e-procurement solution, the project's success also depends on the involvement of internal customers. That is why user experience and change management are two fundamental things to take into consideration, alongside purely technical elements.