Should CFOs Upgrade ERP or Invest in an S2P Platform?

Enterprise resource planning (ERP) systems have long been essential for managing back-office operations, but their implementation is often complex, costly and time-consuming. 

As businesses aim to streamline their technology stack, many CFOs and CIOs default to ERP upgrades.

However, a growing number are turning to source-to-pay (S2P) platforms for a faster, more cost-effective way to unlock value.

Here we take a look at the key considerations for CFOs and CIOs when comparing ERPs to S2P platforms. 

Time-to-value

ERP upgrades can take three to four years and cost millions, all while tying up resources. In contrast, S2P platforms can be implemented in about a year, providing faster returns. 

By adopting S2P first, companies create a "margin multiplier effect," where small operational changes lead to outsized gains in efficiency, productivity and sustainability.

S2P platforms help avoid the hidden costs of ERP upgrades, such as post-merger integrations and ongoing training for users on non-essential processes.

In fact, savings from S2P can help fund future ERP upgrades, giving organisations a shorter payback period.

Alignment on priorities

According to Coupa's Strategic CFO Survey 2024, almost three-quarters (73%) of CFOs report misalignment with CIOs on business priorities. 

This lack of collaboration is a missed opportunity to drive profitable growth through technology that supports both finance and IT needs. 

Given that IT often ranks as a company’s second or third-largest cost, aligning these roles can lead to significant margin improvements.

Financial models and business agility

When evaluating ERP versus S2P, financial modelling is key. 

For example, Summit Materials ran scenarios comparing internal rate of return (IRR), net present value (NPV) and payback periods for both ERP and S2P.

It found most value came from S2P, with quicker wins in cost savings, compliance and risk mitigation. In comparison, ERP upgrades offer long-term benefits but are slower to deliver returns.

Today’s fast-changing business environment demands agility. ERPs can be rigid, with customisations that silo data and slow down decision-making. S2P platforms, on the other hand, consolidate data across systems and streamline processes, making it easier for organisations to adapt to new challenges. 

Often, ERP systems complicate financial controls, leading to workarounds that compromise compliance. In contrast, S2P platforms offer a unified process that guides employees towards buying the right products from approved suppliers, ensuring compliance and maximising value capture.

CFOs should ask how well their systems support:

• Guided buying processes
• Value capture through contracted goods and services
• Rapid approval changes to mitigate fraud and adapt to regulatory needs, particularly around ESG compliance

Improved collaboration

ERP upgrades can stall due to misaligned priorities and financial goals. Effective change management, however, depends on collaboration between CFOs, CIOs and other leadership roles. 

By asking tough questions early on about the risks of sticking with legacy systems and how new investments deliver value, finance and IT leaders can drive faster, more agile outcomes.

ERPs have been foundational to many businesses, but a rapidly-evolving marketplace requires more flexible solutions.

For CFOs and CIOs, adopting an S2P-first approach is one that’s often overlooked on the path to unlocking faster value and ensuring long-term success.

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