4 Reasons Why CIOs Are Looking Beyond ERP for Business Spend Management

As a CIO navigating long-term transformation while juggling short-term goals, you understand how much the market has changed in just a few years.  

Today, CIOs need to equip their organizations with the right tech, tools, and skills to act swiftly and harness data for immediate and lasting value creation. Balancing immediate cost cuts with future planning has become crucial.  

If you can strike that balance, it’s a huge win. Business Spend Management (BSM) shines here—it’s a low-risk, cost-effective strategy that quickly benefits procurement and extends its impact across the entire business, including IT.   

The primary value of BSM is that it provides an end-to-end business process across all aspects of spending.  

This, in turn, empowers collaboration, improves visibility, and allows companies to move beyond some of the typical challenges that result from a siloed approach to spending.  

Many organizations, of course, use their existing enterprise resource planning (ERP) systems for spend management.  

Some ERP platforms offer native procure-to-pay (P2P) modules, but despite the commendable efforts of established solutions like SAP and Oracle ERP to keep up with technological advancements, they face significant challenges from emerging platforms like Moglix.  

This trend is particularly noticeable in the supply chain sector, where CPOs often favor specialized tools over traditional ERP systems, even within organizations that have formally adopted ERP solutions.  

Here are four reasons your ERP software falls short: 

End User Adoption 

CEO Spencer Fung nails it when he talks about Li & Fung’s digital makeover, highlighting that success isn’t just about technology—it’s about getting people on board with using it.  

Many companies struggle with ERP systems because users resist them. ERPs are often designed for top brass and finance, leaving everyday users to maneuver and come up with patchwork.  

Another challenge is ERP training, which can take a whole month—tough for supply chain managers juggling fire at multiple fronts.  

Plus, the complex manual means training needs to be frequent, eating up resources and time, not to mention costs. ERP solutions often miss steps in supply chain workflows, forcing workarounds that lead to unclear reports and missing data.  

And let’s not forget the sluggish and infrequent support responses, a major frustration for supply chain managers who need quick fixes from a support team that neither understands the business or the enormity of the requirement.  

These issues hold back ERP use, leaving many managers stuck with outdated data. 

To really take charge of your company’s resources and boost ROI, businesses need a smart add-on SaaS solution to their current ERP setup—one that’s user-friendly, so people can find what they need and get it approved easily.  

This solution should simplify the procure-to-pay (P2P) process for both employees and suppliers, giving approvers real-time insights into budget impacts before they commit financially.  

Success Kills Innovation 

This isn’t a blanket statement, but it applies to legacy ERP systems.  

They’ve been trying to keep up ever since cloud platforms emerged. To their credit, SAP and Oracle have been making efforts to adapt, releasing new cloud-based versions.  

However, instead of just moving to the cloud, these legacy ERPs should have been completely rewritten. 

To be fair, part of the reason they haven’t done this is because they can’t. ERPs have large, important clients who are used to the way things currently work, and making big changes can be tricky without upsetting them. 

Legacy ERP systems rely on outdated technologies and architectures, limiting their ability to adapt to modern business needs and integrate with newer technologies and APIs.  

Their rigid structures also make it difficult to customize or configure for unique business cases and processes. 

Lacks Adaptability 

ERP systems were primarily designed to handle transactional data and internal processes, focusing more on operational efficiency than on strategic functions like Business Spend Management.  

As a result, they lack the specialized features needed for advanced spend analytics, indirect procurement, and real-time cost savings insights. 

For instance, a retail company using an ERP system for supply chain management might face difficulties in adapting to sudden changes in supplier pricing or demand fluctuations.  

Integrating new spend analytics tools or dynamic procurement processes could require extensive reconfiguration, leading to delays and increased operational costs.  

This rigidity hinders the company’s ability to respond swiftly to market changes, optimize procurement, and achieve cost savings. 

Deployment Cost 

ERP systems can be incredibly expensive, costing millions of dollars just to purchase and deploy. To get started, companies need to buy licenses for each individual module and suite they want to use.  

On top of that, integrating ERPs often means hiring consultants.  

These consultants take the time to understand the business structure, recommend a new system architecture (sometimes reengineering structures and processes to align with best practices), map the old system to the new one, evaluate and clean up the available data, configure the application, and oversee the rollout. 

Way Forward with Moglix 

At Moglix, we’ve been at the forefront of bringing digitalization to supply chains.  

It’s clear that despite all the talk about digital transformation in supply chain management, many large companies still stick to spreadsheets and isolated apps.  

Forward-thinking CIOs like yourself are taking charge of overhauling outdated ERP systems. In preparing for the future, you must not just tech be innovators but also strategic partners, working closely with CFOs.  

You need to strike a balance between IT’s need for flexibility and the growing complexities in finance.  

It’s about embracing change to stay agile in an ever-changing business landscape. 

Moglix has been, for almost a decade, leading the charge on digital transformation not just in India but also in the UAE, helping organizations in the UAE stay ahead in their digital procurement journey, with its most comprehensive procurement solution.  

Moglix’s integrated procurement saas solution, automated workflows, and catalog-based buying solutions, combines with its state-of-the-art physical warehouse network to revolutionize your business’s approach to procurement. Click here to know more. 

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