January 29

What We’ve Got Here is Failure to Communicate

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Communicate with APIs...or on the blackboard

One of the best things about working on an eSourcing and Vendor Lifecycle Management platform is that I get to talk to people in an incredibly broad set of fields because procurement is a universal function across all enterprises in all verticals. Since I talk to such a broad range of people, it is always striking when I hear the same complaints over and over again: it suggests the existence of a big problem.

The most common complaint I see at the enterprise level is about systems that don’t talk to each other. Any company that is large enough to have systems siloed by department necessarily faces the challenge of sharing data between those systems. The bulk of these applications were never designed to communicate well with others — they were designed to be the system of record. Unfortunately the nature of enterprise IT has evolved such that the very concept of a single system of record is outdated. In 2018, software products must communicate with other software products, but many incumbent systems simply don't perform this function well.

The problem is so severe that IT departments are actually "going rogue" to solve it when the organization can’t agree on a resolution. According to Zapier, an API integration company primarily targeting small businesses and individuals, one of their biggest surprises has been “the uptake in use of its new developer program tooling amongst enterprises creating their own integrations for internal teams.”

Though these challenges span the whole organization, they are particularly acute in procurement, which necessarily interacts with functions — and therefore systems — across the entire enterprise. I’ve heard stories of having to retype the same information into not two, not three, but five or more different systems (compliance, finance, legal, ERP, risk, procurement...) in order to complete a sourcing process from beginning to end! The opportunity cost alone boggles the mind, but when you add in the obvious potential for error this introduces, the total cost of these inefficiencies is staggering.

The kicker is that not only does this problem directly destroy value in measurable ways, it also impedes the adoption of other solutions that could improve efficiency and add value in other areas. Procurement has seen an explosion of excellent, innovative software in recent years. The most interesting and useful of these products are point solutions designed specifically to address common pain points and to do a small number of things very, very well. Because of this explosion of innovation, companies that are in a position to adopt a “best of breed” approach to their procurement infrastructure have benefited tremendously. But for companies with legacy systems that already don’t talk to each other, adding a “best of breed” point solution to the mix may just exacerbate the problem by adding another system to manually copy data to and from. The cost of this additional complexity can easily swamp the benefits the new system might bring.

However, this speaks to the viability of an approach that can not only make innovative point solutions available to procurement organizations, but also dramatically improve the ROI on existing software applications. Whereas in the past, the inclination would be to replace one monolithic enterprise system with another, buyers can now look to point solutions that can integrate with a wide range of existing systems and use them as the “glue” that binds everything together. Rather than adding to complexity, a good point solution can become a “force multiplier” by leveraging existing APIs to synchronize data across previously siloed systems.

Here at Vendorful, we speak API. Our strategic sourcing system was purpose built to integrate with systems such as SAP, Ariba, Bravo, BirchStreet, Coupa, Oracle, PeopleSoft, Archer… just about any system with a data interface. We don't want to forcibly replace an organization's existing sytems, but rather allow organizations to extract more value from the investments they have in place. Hello data and goodbye silo!

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