The argument of integrated suites vs. stand-alone (best-of-breed) systems has been around for as long as there have been integrated enterprise solutions. And experts have never been able to reach a final consensus on this debate, and for a good reason. Each approach has its strengths and weaknesses.
This argument is particularly relevant to companies looking at ERP implementation. These companies have probably had multiple line-of-business systems already in place for different functions like accounting, inventory or sales. Should they keep those systems or have them replaced by ERP? After all, ERP is essentially a comprehensive suite of enterprise applications that is supposed to integrate every function and process across an entire business.
Pros & Cons of each strategy
Best-of-breed strategy calls for selecting and implementing a market leading solution for a particular business function or department. This approach focuses on delivering the most comprehensive functionality and usability targeting at a very specific group of users.
Certain departments may have very focused and specific requirements that can only be met by niche applications. If the best possible functionality is such departments require, then you should go with best-of-breed systems. These specialist systems generally take less time to implement than an integrated suite does. The specialist vendors tend to better understand the needs of individual function.
An ERP suite, on the other hand, is more time-consuming to implement and can cause a major disruption to day-to-day operations of businesses. Some departments may be unwilling to do without their familiar systems.
That said, deploying multiple stand-alone systems may not facilitate interdepartmental end-to-end processes due to multiple databases and user interfaces. Having to deal with an enterprise-wide integrated suite is definitely an advantage with respect to user training, integration and ongoing maintenance. This approach also provides better scalability if your business is expanding, and could be a more cost-effective alternative than buying and maintaining multiple systems.
An integrated enterprise suite seems to be much more expensive to purchase at first glance. But when you take into account all components of the TCO (total cost of ownership) such as installing, deploying, upgrading and maintaining, you may end up with a completely different conclusion.
In reality, it is much more common for businesses to maintain a mix of integrated suite and best-of-breed applications. That is, ERP is deployed in tandem with a number of specialist systems for certain areas of the business.
Read more: Top 5 Benefits of Implementing ERP
The rational decision is not either “ERP only” or “best-of-breed software only” approach, but to find the right package for your business. Certain areas that need specialist applications should be identified. And the ability to integrate smoothly with these applications should be high on the priority list when selecting your ERP vendor and product.
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