Ten or so years ago, IT departments were enthusiastically adopting best-of-breed software policies. Different software applications had areas of particular strength, so it made some sense for a company to cherry pick its way through the market offerings, choosing only those applications that best fit the company needs.
Companies purchased ERP [enterprise resource planning] software, warehousing systems, financials software, customer resource management systems, supply chain management systems, asset management systems, transport systems and more. Rather than requiring one big deployment project, the best of breed policy allowed IT departments to focus on discrete needs and to purchase and implement applications over a period of years. Because each solution typically involved a limited number of people or departments, the impact of the deployments was contained. There seemed to be less “bad press” or disruption to the overall business compared to a major integrated systems deployment.
Fast forward to today, however, and things have changed. Software vendors have realised that there is far more money to be made by offering stronger, more comprehensive, tightly integrated ERP suites. Over the past few years vendors have been actively acquiring technologies and developing their systems, so that today, the market offers a wide range of integrated solutions for every need.
Integration begins with deployment
The passage of time has also helped to highlight an underlying problem with the best of breed policy: best of breed is a tunnel vision policy that ignores the need for a holistic view of the business. Disparate systems may work well on their own, but they can't always talk together easily or effectively. This has a major affect on management's ability to view the business and negatively impacts business agility.
It can be a nightmare trying to integrate best of breed applications to create a cohesive whole that is capable of sharing data, supporting workflows and facilitating automation and process efficiencies.
The problem with integration starts with deployment. A business must be able to import existing finance, distribution and data, customer contact information from sources such as spreadsheets or an accounting package.
The second and more critical integration issue is the need for the ERP system to work seamlessly with other systems such as manufacturing and distribution systems, or with the systems used by suppliers and customers. For example, if a business deals with any of Australia's major supermarket chains, it is likely to receive orders online via an Electronic Data Interchange [EDI] system. A collection of best of breed applications will have difficulty dealing efficiently with an EDI order. In these circumstances, staff often find themselves double-entering data into different systems, dealing with different databases that between them, hold multiple versions of the truth. Trying to ascertain the exact status of an order – from production, sales and distribution systems – can be all but impossible.
Compare this to an integrated ERP suite that receives and processes the order, automatically forwarding information from one department to the next so that the order is accepted and documented, picked, dispatched and invoiced as quickly and effortlessly as possible. The transaction is reflected in production plans and inventory. Right across the business, the flow-on effect is noted and actioned.
To get around the problem of isolated applications, companies may try to integrate their disparate systems but there's always a lingering concern over whether modifications or future application upgrades will affect the integration and whether further development will be required with each change to the system.
Moreover, it takes time and money to establish integration between applications that were never designed to talk to one another. Although a fully-integrated ERP solution may initially appear to cost more than a selection of disparate applications, once the cost of integration is factored in, the best of breed solution is quite likely to emerge as the more expensive approach.
Consistency versus individuality
Individuality is an interesting and engaging trait in a person but when it comes to software, consistency in appearance, operation and performance is important. Within an integrated solution, every module is designed to work the same ways as all the others. Once staff learn one module, they pretty much know how the others are going to operate.
When using best of breed software however, every application has its own unique characteristics. Screens, short cuts, command keys will all differ. This makes it harder for staff to learn the systems. It takes longer for new staff to become productive and, because each application works differently, there is a higher potential for error.
One or many suppliers?
There's one more major differentiating factor between best of breed and integrated ERP solutions. The former approach involves dealing with multiple suppliers for deployment, support, maintenance and training. There are many relationships to be established and managed. The latter involves just one supplier. When things need to be modified or customised, or if the business wants to provide input on the future direction of the software, there's just one relationship to deal with, and one organisation to contact.
The changes in the market over the past decade have turned the tables on the best of breed versus integrated ERP solution debate. Due to the problems of integration, lack of uniformity and the sheer number of vendors involved, best of breed solutions have become more complex, more costly and more time consuming to deploy and manage when compared to integrated software suites. When you look at the lifespan of business software, the changes and upgrades that will occur over that time, the costs to maintain the system and the business benefits that accrue from free-flowing data, it's clear why organisations are choosing to ditch their best of breed policies in favour of integrated ERP suites.
Robert Frandsen is the managing director of InfoMotion