Iain Saunderson, CTO, Spinnaker Support, sees procurement teams ‘leading the charge’ challenging tech investment.
Procurement teams are moving beyond best price or reliable supplier methodology and stepping into roles challenging the status quo of organizational spending and technological investment.
One area they’re paying close attention to is enterprise resource planning (ERP) systems, recognized s the nerve center of organizational operations that, when fine-tuned, can unleash new levels of efficiency, opportunity and innovation.
Foundational to operational functionality, ERP systems are often inflexible and expensive to maintain and upgrade – which is why, as enterprises evolve and demands for agility and adaptability grow, the traditional models of ERP maintenance and support are being looked at more closely.
And it is procurement teams leading the charge, seeing ERP systems as strategic platforms capable of fostering greater business flexibility and growth while being mindful of maintaining their stability. They recognize that every dollar saved from operational efficiencies or smart renegotiation can be reinvested into areas that spur innovation and competitive advantage.
So how can your team make this a reality?
Consider third-party software support – an alternative to vendor software support which works more like a partner than a supplier relationship. It promises personalized, responsive and cost-effective support solutions tailored for ERP systems. Unlike traditional vendor support that comes with hefty price tags and rigid service structures, third-party providers offer a nuanced and personalized approach – at a fraction of the cost.
What exactly makes third-party support a strategic asset in the eyes of procurement?
It’s the combination of direct cost savings, operational agility and the freedom it offers businesses to dictate the pace of their own technological advancement and not be beholden to the vendor’s preferred support policies.
Of course, recognizing and understanding these benefits is one thing – persuading IT leaders and C-suite executives to overhaul their ERP maintenance systems is another.
In fact, we often hear from these leaders that software support alternatives are “too risky” or “don’t provide the necessary security and compliance requirements.”
Here’s how to challenge these misconceptions:
Balancing risk and innovation
The relationship between procurement teams and IT departments can be tense. IT departments, often inherently risk-averse, tend to favor the stability and predictability of the in-house support contracts provided by established ERP vendors.
Their reluctance to shift from these traditional platforms stems from concerns about potential risks and the uncertainty of transitioning to a new support structure.
Procurement teams, on the other hand, are increasingly recognizing that adherence to vendor support contracts might pose its own set of risks. These risks are not always immediately apparent but can have long-term implications for your organization.
Staying with a vendor’s support often means being locked into their ecosystem, subject to their timelines for upgrades and patches, and their pricing structures.
This dependency can stifle innovation and agility, as organizations are forced to follow a path dictated by the vendor, rather than one aligned with their own strategic objectives.
Third-party software support, however, mitigates these risks while driving innovation. Contrary to the perceived uncertainty of moving away from traditional vendors, third-party support can provide a more stable and controlled environment.
These providers specialize in maintaining and optimizing existing and legacy systems, extending their lifespan and ensuring they continue to meet the needs of the business without the disruptive cycle of mandatory upgrades and system overhauls.
Third-party support partners also bring a level of responsiveness and support for customizations and that traditional vendors do not match, offering solutions tailored to the specific needs of the business – whatever its size or operating industry – ensuring that ERP systems are not just maintained but optimized and aligned with the organization’s evolving goals. This approach reduces the risk of operational disruptions and interoperability issues, which are common concerns when undergoing major system upgrades imposed by vendor timelines.
In addition, third-party support can alleviate the financial risk associated with vendor support contracts in providing far more competitive pricing, freeing up valuable resources that can be reinvested in strategic initiatives rather than being consumed by maintenance costs.
For procurement teams it’s about shifting the perception of risk from the fear of leaving a known vendor to the opportunity cost of stifling innovation and operational flexibility.
Security and compliance
Compliance and security concerns are often top of the list of perceived reasons to stay with the vendor’s in-house support.
When vendors shift their priorities to newer software releases, offering limited or sustaining support for older systems, it leaves many businesses in a precarious position – especially those relying on older or highly customized versions of ERP software.
The absence of new security patches for these legacy systems not only heightens the risk of cybersecurity breaches but also puts companies at odds with ever-evolving regulatory requirements.
The need for bespoke support is most critical when businesses are met with new government mandates affecting financial reporting or cybersecurity – or when vulnerabilities in the software are discovered. Under the traditional vendor support model, businesses are often left to fend for themselves, as these vendors prioritize their latest offerings, leaving legacy systems in a support limbo.
This is where the role of third-party software support can really add value.
Unlike traditional vendor support, third-party providers are not tied to a specific product lifecycle. Their focus is on maintaining and securing the ERP systems currently in use by businesses, regardless of their age or version – an approach ensuring that companies are not forced into unnecessary and costly upgrades just to stay compliant.
Third-party software support providers offer a more agile and proactive approach to security and compliance, ensuring your critical vulnerabilities are addressed before they become exploitable. They know the regulatory landscapes and can tailor their support to align with specific industry requirements.
The benefits extend well beyond direct financial savings.
Being able to reallocate both financial and human resources toward initiatives that drive strategic growth means that business leaders can venture into new market territories, fuel innovation or enhance the customer experience.
Freed from the constraints of rigid upgrade cycles and the end-of-life support timelines typically imposed by traditional ERP vendors, organizations are empowered to chart their own destiny.
This new found autonomy enables businesses to make decisions that are aligned with their specific strategic goals and adapt to evolving market conditions, rather than being tethered to vendor-dictated schedules.
Procurement teams understand that with a strategic application of third-party support, ERP maintenance can be transformed from a line-item expense into an innovation enabler.
We believe that they’re well positioned to convince their IT and C-suite counterparts of this, too.
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