Digital shopping without cost traps

This difference is particularly important in SAP-based procurement landscapes. SAP ERP acts as a system of record here: master data, transactions, authorizations and business rules are maintained centrally and must be reused consistently in procurement processes. If the actual integration costs are not taken into account at an early stage when selecting a solution, the complexity is shifted to the integration layer - with a direct impact on project runtimes, process stability and total cost of ownership (TCO).

Hidden costs

Implementation is one of the most visible and at the same time most variable cost blocks. Some projects go live in around a hundred days, others require several hundred or even a thousand days of consulting. The decisive factor is how efficient a solution is as standard, because the more processes that can be mapped without additional developments, the lower the implementation costs and subsequent adjustments. 

An overly narrow „fit to standard“ approach, on the other hand, means that unavoidable deviations quickly lead to individual expansion projects, the development, testing and maintenance costs of which are often underestimated over the entire life cycle. 

“The subscription price is just the tip of the iceberg. Anyone who only compares license costs and function lists overlooks the real cost drivers.”

Natalia Parmenova,
Chief Revenue Officer, BeNeering

Procurement organizations should specifically question which processes are supported as delivered, how departmental or country-specific processes are handled and what experience is available on typical project runtimes in comparable environments. Integration is at least as important. In classic architectures, an additional integration layer is set up. The ERP uses this to transfer master data and transactions to the procurement solution, which in turn returns orders and invoice data - often on the basis of periodic data copies. If synchronization is only carried out once a day, the procurement solution works with outdated information between runs, which leads to considerable additional work in cleaning up and correcting errors as well as additional compliance risks. 

An architectural approach that consistently relies on the ERP as the leading system and does not require additional middleware reduces these effects considerably. License and operating costs for a separate integration platform are also completely eliminated.

The most expensive life cycle phase 

After the go-live, the longest and often most expensive phase of the software life cycle begins with ongoing operation. Monitoring, troubleshooting, process adjustments and release management permanently tie up resources. Different technologies also require different qualifications. Those who manage SAP cannot automatically administer proprietary middleware. A clear TCO advantage therefore arises where implementation, operation and further development can be managed by the same teams that already support the ERP.

Clarify TCO in the selection process

Very different approaches are often compared in tenders: standardized, ERP-related solutions on the one hand and individual developments on generic platforms or low-code stacks on the other. Although these approaches can be compared using license prices and function lists, the differences are enormous from a TCO perspective. This makes it all the more important that integration principles, necessary additional software, maintenance costs and required skills are also systematically queried in RFPs in order to make the actual total costs visible. (rk, source: BeNeering)