Best-of-breed or integrated suite? 10 questions to consider
The best-of-breed vs. integrated suite battle has been ongoing since integrated enterprise resource planning software first came on the scene. In the early days, buyers were forced to choose between stand-alone systems that performed one function very well (e.g., accounting, production planning) or one integrated system that offered modules for each function, but with varying degrees of functional depth.
Each approach presents its own merits and potential drawbacks. Early adopters of best-of-breed systems loved that they could get a robust system to address specific needs. Advocates touted how easy they were to implement and how much more feature-rich they were relative to integrated suite offerings. On the other hand, integrated suite users enjoyed having everything in one system and not having to integrate applications.
While these differences are still present, the industry has evolved to give buyers some of the best of both worlds. Over time, integrated suite ERP vendors such as SAP, Microsoft, Infor and Epicor have built functionality for just about every industry segment and business need. The push for true service-oriented architectures (SOA) is reducing integrated suites' historical rigidity, making modular implementations easier and reducing the total costs of ownership.
On the best-of-breed side, technologies such as .Net, J2EE, XML and SOAP make systems open and more easily integrated. Our 12-person company recently completed a simple SOAP integration with one part-time developer, for example. The recent trend towards software-as-a-service (SaaS) is also helping lower up-front costs of purchasing new systems.
If you find yourself deciding between implementing a best-of-breed application or an additional module from your existing ERP vendor, consider the following questions:
1. Are your needs for the new application really that specialized, or can they be met by your ERP vendor's (potentially) broader offering?
A surprising number of buyers tend to think their business is unique. Software vendors have been addressing those unique needs long enough that many of them have been addressed in the packaged product.
2. Do you really need the systems integrated, or are you OK with two stand-alone systems?
A lot of buyers start the research process assuming that integration is essential, when many business functions are more disparate than they think.
3. Does your ERP vendor offer (or come close enough to offering) what you need?
As ERP vendors have built out functionality over time, many can meet more business requirements than their customers realize. If a vendor can't meet 100% of them, it may be worthwhile to sacrifice functionality for a smoother implementation.
4. Do you have the IT resources necessary to perform a complete integration?
While integrations are more easily performed due to the reasons mentioned above, they still require IT expertise and commitment from end users.
5. Are the near-term hurdles of implementing a suite or best-of-breed system justifiable for long-term business improvements, or are they prohibitive?
Just like any investment, IT managers need to consider that the near-term challenges (training new staff, migrating existing data, or modifying business processes) may be worth the long-term benefits gained with the right software system.
6. How truly integrated is the integrated suite vendor's offering?
If the ERP vendor acquired the system, it may not be "truly" integrated. It might just be a best-of-breed system with some basic integration. If the vendor built it themselves, it could use a different code base and therefore not be tightly integrated with the ERP suite's older core.
7. Is the ERP vendor's solution close to a best-of-breed system?
Some ERP vendors have invested so much in specific applications that they achieve functional parity with best-of-breed systems.
8. What is the long-term viability of the best-of-breed vendor?
While some best-of-breed vendors are financially and strategically viable, others may be too young and/or have too narrow of a focus to survive in a competitive industry.
9. Will the ERP vendor give you such a significant price discount that it offsets the sacrifice in functionality?
Buyers who are looking to add a module to an existing ERP system can usually expect to pay much less than implementing a best-of-breed system. However, best-of-breed systems can sometimes cost about the same.
10. Does the new applications category (i.e. CRM) merit a different deployment model (i.e. SaaS) than your back-office ERP system (i.e. on-premise)?
If so, implementing a best-of-breed system might make more sense. This is becoming increasingly popular for SaaS systems that require collaboration and/or remote access.
The software research and selection process is notoriously difficult. Buyers who consider the 10 questions above should be well on their way to making the right front-end decision between integrated suites and best-of-breed systems. Sometimes that decision is the hardest one to make.
Austin Merritt is vice president of Software Advice, a free online resource with reviews and comparisons of enterprise resource planning (ERP) software. He has performed a number of roles at the company, ranging from marketing and research to blogging about software trends and news.
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