Best of Breed Software vs Fully Integrated

info@omnissoftware.com

Odoo text and image block

 

When businesses are implementing 'line of business' software, they are often faced with two stark choices:

Option 1: Do we simply look for the 'best of breed' in each of the categories of software (eg Accounts, CRM, Helpdesk, Stock Control, Manufacturing) and find some way to hook them all together?  Generally speaking, best of breed ("BoB") applications are installed early in the life of a business, usually because there are not enough users to justify a wider-implemented system. BoB products deal only with a small part the business, often resulting in a slower flow of communication when these systems are disconnected. The more software systems a business has implemented, the more expensive, confusing and difficult it becomes to connect data for overall reporting and workflow. 

Examples might include CRM: Salesforce or MS CRM Accounts: Xero or Sage for Help Desk: FreshDesk or Oracle Rightnow

or

Option 2: Do we choose a single application which integrates all these functions into one end-to-end business process? This class of software is often called ERP or Enterprise Resource Planning, or Business Management Software.  In contrast, ERP software provides a range of applications in an all-in-one integrated system. This will usually include Accounting, CRM, Inventory, Marketing, Project Management. As a result, all areas of your business become accessible from a single log-in and a single data source. (Disclaimer: Omnis Software provides this latter solution, so please understand our views are likely to be skewed. Nonetheless, our experiences of running businesses that have chosen Option 1 has lead to our determination to establish a business that exclusively provides Option 2.)

Examples might include: High end: SAP or Oracle Mid-market: MS Dynamics AX, NetSuite Cost-effective: ERPNext, Odoo


The following matrix might shed some light on the pros and cons of each class of software:


AspectBest of Breed ('BoB'): ERP/Integrated Business Management Software 
Pure product functionality BoB often claims the high ground on this aspect, although be aware you might only be using 60% of the functionality they provide. ERP can occasionally have more restricted functions when compared to BoB. However a high-end ERP might have more functionality than a low-end BoB.  So somewhere in the middle might be a good compromise.  
Issues involved with integration Integrating applications is one of the highest risk and most costly processes a business can embark on. Even worse, once the job is finished, you now need to update all the connections to keep up with the main application upgrades too. Different systems will have different rules, too. One system might expect customer addresses in a particular format, another system might have a different one. Technically, an ERP system is not 'integrated' - it's fully monolithic. A single piece of data, eg a customer address, only lives in one place in an ERP system. When you change it there, it's changed.
"I've used product X for Y years and I never want to switch to something else, no matter how good it is for the other parts of the business" Oh dear. This is often the reason that ERP decisions are made at CEO/Board level. There's nothing wrong with product loyalty, but please don't let an individual or department hold the whole business to ransom.
Ease/difficulty of implementation Implementation of individual applications can often be easier, mainly because the implementation can be phased. However, the integration plumbing is likely to redress that balance. ERP implementation has had a reputation of being disruptive to businesses. This is mainly due to the fact that many parts of the business are being affected at once. However, a well-planned and phased implementation can negate much of this risk.
Sign-on This is one of the biggest issues of multiple applications. For users, logging in and out of systems to get specific information is frustrating and time-consuming. Cutting and pasting data between system is not conducive to good data integrity. A single login will give you access to multiple area of the business. All ERP providers recognise the sensitivity of certain data, so security will be granular enough to allow access only to the data that's needed for an individual.
Cost If you only need CRM and Accounts (for example) costs are likely to be lower than an full-blown ERP system. However, adding the costs and effort to integrate them will close the gap. By the time you have (say) three or four BoB applications, all trying to update each other, you will have an expensive solution. For large businesses with complex requirements, a fully featured ERP system will usually be a big investment. Often the larger part of the costs will be in the consulting and implementation elements. However, more cost-effective ERP systems are coming to the market, and these will cost far less than the equivalent group of BoB applications. And that's before integration is considered.
Choice of cloud-based, or on-premise For some BoB applications such as Salesforce and Xero, cloud is the only option. Few new mainstream applications, especially at the lower end, are capable of running on-premise. Some of the older ERP systems are more likely to run on-premise, especially if they are MRP (manufacturing-based). However, like BoB, ERP systems are becoming more cloud-focused, and this is often related to the concept of SaaS, ie subscription-based. SaaS will almost always reduce up-front costs, and will often be cheaper over its lifetime than on-premise/purchased licences.