One of the benefits that many ERP vendors claim is that they offer a broad range of modules in addition to the core functionality of the solution, such as talent management/HR, treasury management, marketing automation, and, of course, expense reporting. The advantage of leveraging these tools, according the vendors, is that they provide a cost-effective solution and integrate seamlessly into the main ERP solution. However, what they fail to tell you is that when compared to a best-of-breed, standalone solution, the capabilities of their offering often fall significantly short, and won’t fulfill the requirements of more sophisticated or global organizations. As a result, any up-front cost savings become moot.

To use a food-based analogy (given that I'm still digesting those turkey leftovers), choosing an ERP vendor's additional software offerings is like going out for a meal at The Cheesecake Factory. In the same way that The Cheesecake Factory excels at cheesecake, ERP vendors make great core ERP software. However, while The Cheesecake Factory has a huge menu, and can make a perfectly acceptable version of pretty much anything you could ever think to order, if you really want a great steak, for example, you’re more likely to head to a specialist restaurant such as Morton’s or Ruth’s Chris. Similarly, when it comes to the countless other additional software modules that ERP vendors offer, they simply don’t have the background, scalability or functionality to support companies with more complex requirements, particularly when compared to the best-of-breed vendors.

So, if you are currently using an ERP expense module, or your ERP vendor is looking to upsell their expense module to you, how can you tell if it’s time to look at a dedicated solution?

Related: Specialist Expense Vendors vs. ERP Suite Modules: Pros and Cons

First and most straightforward is the user experience that your business travelers have. With the prevalence of easy-to-use, icon-based and drag-and-drop consumer applications on mobiles, employees have come to expect a similarly straightforward experience from the technology they use at work. If your expense interface looks more like a spreadsheet that was designed in the days of Windows 95, it will most likely be difficult to learn and use, easy to forget, and will probably result in low user satisfaction and disengaged employees.

In addition to the look of the user interface, how easy is the solution to enter and submit expenses, particularly on the road, where the vast majority of transactions are made? If the software isn’t mobile-optimized (ideally with a web app that can be easily used across any device), the answer is going to be “not at all easy,” and your most valuable staff will need to spend hours back in their hotel room or the office entering expense details into the system in order to submit them. In fact, even if your ERP expense module has mobile capabilities, it’s still likely that it will have limited functionality. For example, while being able to capture a receipt image on your mobile phone is helpful, if your expense management solution doesn’t have OCR capabilities, allowing it to automatically extract all the transaction data and create an expense line item, your team members will still need to manually enter all of the information in order to submit an expense item.

Related: Putting Expense Solutions’ Optical Character Recognition Capabilities Under the Microscope

More complex expense items should also be just as easy to create, without needing to take additional steps that slow down the process. For example, submitting a mileage claim should be as straightforward as clicking on locations on a map within the expense interface, and then mileage is automatically calculated and a map image submitted with the expense item. If a hotel bill needs to be broken down into individual items such as meals and room and tax, the expense system should be able to extract this data automatically. If not, it could be a huge time-suck. In addition, how does it handle pre-approvals (also known as encumbrances)? If your organization requires pre-approvals for travel purchases, it should be possible to easily attach it to the report at any stage. If your solution can’t do this, you’ll be doing double the work.

While the everyday user experience is a major factor for your road warriors, who can often expense dozens of items a month while on the road, the back-end capabilities are also of paramount importance for an expense solution to deliver on its true potential, and it’s often here where ERP solutions are lacking in key capabilities. For administrators, the ability to create more robust and flexible approval routing processes will mean that the expense solution can easily be configured around your company’s existing processes – not the other way around. Features like simple email approval (online or offline) and the ability to return individual line items without having to reject an entire expense report can also streamline the approval process, while avoiding delays in expense reimbursement.

Related: 7 Reasons Why the Finance Team Should Push for Expense Management

On a more fundamental technology level, innovation is another question. Large ERP vendors tend to focus their R&D efforts on their core solutions, so edge products, such as expense, tend to be left behind when it comes to new features and functionality. As a result, even if their system is just about adequate for your needs now, it will likely soon be way behind the capabilities of a best-of-breed vendor.  

Of course, your ERP vendor will try and throw curveballs for reasons why you should use their solutions. The may claim that having an external solution will mean that it won’t integrate as effectively with your core ERP as their in-house module. However, with all major software vendors now operating open environments with a focus on interoperability, integrating expense data in near-real-time is a straightforward, one-off task, either via connectors or dedicated APIs.

So, while your ERP vendor may claim that adding their expense module can save you money over having to purchase a dedicated best-of-breed module, when you are missing out on many of the time-saving and value-creating benefits that a specialist expense app provides, it really is a false economy. Adopting a best-of-breed solution will not only be a relief to your end-users and administrators, but will also deliver major operational and financial benefits for your organization. To go back to the original analogy, now can have your, er, steak and eat it.

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Selecting an Expense Management Vendor - Best of Breed or One Stop Shop

Selecting an Expense Management Vendor - Best of Breed or One Stop Shop

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