The ERP base is up and running and now the needs of the business demand
the addition of functionality beyond that base. The additional functionality
may be supply chain management (SCM), business intelligence (BI) New Product
Development (NPD), or any of a long list of acronyms. Perhaps your ERP
vendor will not have the extension or its functionality will be clearly
inappropriate for your needs and you will turn to another vendor for the
functionality, a "Best-of breed" vendor. But in many cases, the ERP vendor
will have applications that potentially fill your need and you can get
everything from the "Single Source" vendor. In either situation, is it
better to limit yourself to the products from a single vendor or pick
from other vendors who appear to better fit your needs? Do you go "Single
Source" or "Best of Breed"?
this discussion, two issues will be hotly debated with, in most cases,
a trade off between the two extremes of having the best integration versus
the best functionality. The opposing approaches will each claim they have
both - but a few possible exceptions (I know these exceptions must exist)
do not change the basic issues.
integration is very important, but it is not the Holy Grail. Superior
functionality is very important, but it is not the Holy Grail. Both are
important but it is still rare that you find a solution that has both
superior integration and superior functionality. The debate on these trade-offs
typically follows two standard arguments between the two different types
of vendors. The ERP or single source vendors claim great integration (and
it is usually better) and will also claim their functionality is superior.
The best-of-breed vendors claim superior functionality and also claim
they can integrate. Let's look at both sides and understand the realities
so you can sort the facts from the hype.
The single source vendors (usually ERP vendors but now some SCM vendors)
offer many add-on packages. These add-ons vary in both quality of functionality
and integration. In the past, it was typical that the quality of functionality
for these add-ons was inferior to the quality offered by the dedicated
or best-of-breed vendor. This assumption can no longer be made.
not assume the ERP add-on modules are of less functional quality than
the dedicated best-of-breed vendor's, but also, do not assume they are
better or equal. Always include your ERP vendor's add-on modules in your
search, but evaluate them fully against your needs and the options from
the best-of-breed vendor.
key place to evaluate is in the area of vertical industry needs, often
a weak point. While you may not need the best available functionality,
you do need a practical level of functionality, one that does not limit
your operational abilities.
may be obvious that the integration offered by the single source vendor
should be superior and although this is usually true, it is a dangerous
assumption. Today, many add-on products have been purchased by the ERP
vendors or have been developed with a minimalist approach to address competitive
issues. In these cases, integration may be minimal or even non-existent.
Assuming that purchased modules were built for integration is a dangerous
the vendor made the effort to fully integrate these modules? If the answer
is that they have not, but it is "planned", that should be a contractual
issue. If the module was developed for competitive issues, they may have
taken a "meets minimum" approach to either functionality or integration
or both. Only careful evaluation of both the functionality and the integration
can prove the worth of the single vendor's offering.
modules may be the result of a "partnership". The word "partnership" is
an overused term that tells little of the real relationship. The cold
reality is that most partnerships in the vendor world end at a joint press
release. Is this partnership more than a press release? Is it more than
selling together? Have the partners invested in integration? Is this partnership
a long-term arrangement?
partnerships are discussed in terms of long-term commitments but few really
are. The odds of a long-term relationship are higher if the divorce terms
are painful for both parties. If you buy an add-on that comes from a partnership,
your contract should make the break-up of the partnership painful for
the two partners.
Best-of-breed vendors are typically very focused on a single application
and sometimes within a single vertical industry. This focus should mean
that they are more knowledgeable and they have produced a richer set of
functionality. The functionality from a best-of-breed vendor should be
better - that is the only competitive advantage they have.
integration of best-of-breed products is a requirement for these vendors,
you still need to know if the product was designed to be integrated? Do
special file structures, methods and technology exist to facilitate the
integration? Does the vendor offer a supported integration to your ERP
system? If yes, how will it be supported in the future? The discussion
of partnerships above relate to these best-of-breed integrations. With
these prepackaged integrations, understand the responsibilities of the
best-of-breed vendor and its willingness to add those responsibilities
to the contract.
integration offered by the best-of-breed vendor will almost always be
of less quality than that offered by the single source vendor (the exception
is when the add-on application was acquired or comes from a partnership
arrangement). Perfect integration is not your objective; you should be
striving for a practical level of integration. Loosely coupled modules
based upon good integration technology will prove superior to tightly
that part of the integration challenge is dealing with the separate and
usually unrelated release schedules of the two vendors, how will the best-of-breed
address these issues? Less than perfect but practical integration will
mean duplicate files, semantic issues (the same field not meaning the
same thing, both files will not have identical fields, etc.) and data
maintenance challenges (where do you update the data that is in both files,
where do you resolve the issues of files that do not overlap). Data integrity
issues will exist - as a good friend once told me, "Duplicate data isn't."
What about the issues of staying with a single vendor versus a best-of-breed
approach? In reality, you will probably have some best-of-breed components
to your overall systems because it is very rare for a single vendor to
meet 100% of a company's needs. You should strive to minimize the total
number of vendors in your total business solution, but trade-offs will
exist. It will boil down to better functionality versus better integration.
the single vendor side will be the long-term cost of having less than
the best functionality versus the long-term benefit of better integration.
On the best-of-breed side will be the long-term benefits of better functionality
versus the long-term cost of inferior integration. This will never be
a clear-cut decision - it is all about the trade-offs.
Thompson is a principal of Process ERP Partners. He has over 25 years
experience as an executive in the software industry with the last 17 in process
industry related ERP, SCP, and e-business related segments. Olin
has been called "the Father of Process ERP." He is a frequent author and an
award-winning speaker on topics of gaining value from ERP, SCP, e-commerce and
the impact of technology on industry.
can be reached at Olin@ProcessERP.com.