Vendor Portal Systems are fast becoming a high priority within large enterprises.
In 2014, Deloitte put out their Global CPO Survey annual survey where they claimed that 65%procurement leaders endeavored to invest in a Vendor Portal system rather than upgrade their ERP.
Enterprise Resource Planning or ERP can be defined as a particular kind of business management system with the primary goal of improving both the performance and effectiveness of an organization’s internal business structure and processes. As such, an ERP system integrates numerous business activities across various organization’s structures, such as purchasing, product distribution, and planning, inventory control, CRM, etc.
The ultimate goal of a corporation is to create one complete and centralized system, where their company can collect, store, process, and interpret data. In the modern world of business, the ERP systems cover all core business divisions, including finance, sales, accounting, HR, marketing, etc.
If you are looking to upgrade your internal P2P functionality, you will need to make a choice between deploying an external ERP upgrade vs. implementing an external Vendor Portal System. Keep in mind that, due to the enterprise-wide reach of the ERP system a properly integrated external Vendor Portal system will deliver the feel and form of an add-on module.
Why Choose the Vendor Portal System?
Vendor Portals were introduced as gateway systems facilitating many P2P functionalities and bridging the gap between the ERP and the various systems for eProcurement and eInvoicing. Who doesn’t like the idea of having both the enterprise reach of an ERP system and the functional flexibility of an external Vendor Portal? Well, the answer to that is simple, the ERP providers themselves do not like it.
The ERP providers themselves have gone to great lengths and at great expense to introduce complex add-on modules available as upgrades to help deliver more functional control. However, installing and managing ERP upgrades can be quite costly. Additionally, you always have to take care of extra costs associated with frequent customizations, upgrades, updates, and regular maintenance.
On the other side, Vendor Portal systems can be configured and deployed at a fraction of the initial cost and expense of the ERP systems. We should also take into consideration the much faster implementation and ability to generate quicker returns, which are advantages reserved for Vendor Portal systems. An independent and dedicated Vendor Portal system can be implemented in a couple of weeks. The Return on investment becomes evident very soon. In sharp contrast, an average ERP system requires months or even years to be successfully implemented. As you might’ve expected, companies very often hesitate to invest is solutions, which don’t give them quick investment returns.
The Final Verdict
It’s not an exaggeration to say that a dedicated Vendor Portal system can outmatch an ERP system on cost, performance, speed to ROI and usability. Additionally, Vendor Portal Systems are designed to scale up for large companies and down for small companies. Traditionally, the ERP systems are designed primarily for large enterprises and are intended for private sector firms which can afford them.
The ERP systems simply lack the functionality essential for addressing government policies about fully transparent processes. Moreover, the ERP systems are inflexible, while offering a limited maneuvering space scope for creating eCatalogs, among other things. For what is worth, you can customize your ERP system, but to a certain degree and with a significant increase in your costs. On the other hand, your Vendor Portal System can be easy, quick, and efficiently integrated into your business system at an affordable price and with a surprising ability to be tailored to match your specific needs. Many of these systems are delivered via a SaaS-based subscription model.