Custom versus standard procurement integrations: What is the difference?

Organizations purchase software to run the business better or more efficiently. When different systems or software “talk” or interact with one another seamlessly, the gains in productivity and new insights is often greater than the sum of its parts. These interactions are classified as standard or custom integrations.

In this blog post, we will cover the following topics:

1. Past versus present: How have integrations evolved? 
2. What is the difference between custom and standardized integrations?
3. What are the benefits of procurement integrations?
4. Why are standard integrations more prevalent?
5. What does the future look like for procurement integrations, microservices, and beyond?
   

Past versus present: How have integrations evolved? 

Ten to fifteen years ago, the only type of integration available, if you wanted two disparate software platforms to interact with one another, was via the custom integration path to facilitate interaction between one another. With cloud computing and Software-as-a-Service, the modern era of software patches, and releases being maintained by the software provider, a new collaboration environment between complementary software product offerings emerged.

Presently, most of the world’s largest SaaS offerings have standard integrations with each other, and those that do not are planning them as part of their roadmap.

As an end-user, I would love it if all software interacted with each other in an intelligent (“not haphazardly” versus “artificial intelligence”) fashion. Adoption could conceivably increase exponentially as the friction to use the software decreases. The days of software operating in isolation or a silo are numbered as businesses recognize every software tool requires some input or foundational data for productivity.

What is the difference between custom and standardized integrations?

A custom integration means that the software, website, system, or platform is enabled to interact with another software, website, system, or platform that requires significant software development time. Typically, this requires software development in the realm of weeks and months for the linkages to be created and work effectively.

Standardized or “plug-it-in” integrations mean that the software, website, system, or platform is enabled to interact in one or more common use cases with another software, website, system, or platform in a manner that has been pre-established. Pre-established means that the software development efforts for one or more common use cases have already been written and developed and it’s a simple configuration change. As such, these integrations are typically accomplished within 5 to 30 minutes with a click or minor change configuration files. Sometimes these integrations are called or classified as “connectors.”

What are the benefits of integrations?

Several buzzwords come to mind when the rhetoric of connected or interconnected is articulated. Standardized integrations are rapidly driving these interconnections. The world is quickly recognizing that the more software that can interact with one another, the greater the value that can be unlocked.

What are the benefits of procurement integrations?

Software in the procurement space is following in the footsteps of other leading Software-as-a-Service (SaaS) offerings. Many of the largest SaaS players come with standard integrations with one another, especially if they are complementary product offerings.

Most organizations have an Enterprise Resource Planning (ERP) platform and procurement specific software seeks to add or augment its base functionality. Procurement software is growing by leaps and bounds as companies begin to recognize procurement’s role as a competitive advantage (not merely as a cost cutter). While every organization with a procurement department is on their own journey (from non-existent to cutting-edge, intangible value-measurement KPIs), the procurement software industry has several product offerings wherever your organization happens to land.

As an individual contributor who attempts to bring a fair, objective opinion to integrations, it should come as no surprise that Fairmarkit has several pre-built, standard integrations with Coupa, Salesforce, SAP Ariba, Oracle (JD Edwards & eBusiness Suite/iProcurement), basware, ServiceNow, Zycus, Workday, Munis, and MS Dynamics GP. 

The integrations (what and how they interact with each other) vary by ERP/CRM or base platform you are integrating Fairmarkit with. An integration guide and more information about Fairmarkit’s integrations can be found here. 

In the contract life management space, Icertis, for example, has standard integrations with Microsoft Dynamics, Microsoft Teams, Office 365, SalesForce, and Workday.

SourceDay which operates as a collaboration tool between buyers and suppliers in PO, RFQ, AP, and Quality arena, is another example that has an out-of-the-box, standard integration with Oracle Netsuite and Acumatica.

Why are standard integrations more prevalent? 

While some standard integrations are free, many standard integrations do have a nominal fee which is typically considerably less than what it would cost for a custom integration, where you may not know when and how well the integration will turn out.

With a greater interconnected world, plug-it-in integrations become more prevalent each day because software providers recognize:

1. No one wants to pay for it once, so everyone else can benefit
2. Ease of use and productivity increases
3. “You’ve made it” or at least the appearance of success when software integrates with several globally recognized platforms
4. Custom integration that goes off the rails may result in significant negative feedback amongst those that may have similar systems the software is attempting to integrate with

What does the future look like for procurement integrations, microservices, and beyond?

Certainly, it’s easy to say all software must have pre-built integrations for any and all software purchases going forward, but that’s unrealistic.

What is realistic is working closely with your business and information technology partners to better understand the strategic direction of the organization as it relates to productivity.

1. Decisions around legacy software need to be made: a) work towards deprecating b) using them as is c) bringing them into the 21st century (custom integration with existing software platforms).
2. Are there new integrations or connectors now available for existing software you’ve purchased, that might save minutes each day, or decrease user frustration?
3. What divisions or business areas would be energized if there was greater data or business understanding?
4. What real-time or near-real-time data or interconnections would have the most impact on course corrections or changes in business behavior?

Software platforms are an ever-changing landscape and the “as-a-Service” revolution that is taking place, certainly allows for amazing collaboration between competing and complementary software vendors.

The start-up space continues to create, iterate, and advance niche solutions to build upon large behemoths by focusing on agility, user experience, quick releases, and frequent deployment times.

A webinar by Dr. Elouise Epstein for tealbook is the best I’ve seen in terms of how integrations via microservices (API) could be leveraged to create the best in breed solution companies and users have desired since the beginning of the computing age.

As a procurement professional, I recognize that buying enterprise software typically means trading off some features or usability to have an “integrated” experience between all the modules or pieces of the software puzzle. There isn’t a clear platform behemoth that excels at everything it purports to accomplish. Some modules are inherently better than others and this causes user angst among those that must use modules that are less than ideal. I’m hopeful that a microservice/API and standard integration world is within reach.

Software service providers span the range of existence where some work to augment software giants and others hope to disrupt them. New entrants typically come with better usability, lower maintenance costs, high customer service, high user adoption, and considerably lower operating costs. A future where niche software with pre-built integrations with both large ERP/CRM software giants and other niche software is very appealing.  This is certainly a situation where perhaps one can have their cake and eat it too. Only time and collaboration will tell if it’s a viable concept and business model in practice.