Business Software Strategy – 3 Options

In choosing a software to support your business processes and requirements, you basically have the following options:

1. An ERP solution (either implemented on your premise, or used as a service delivered from “the cloud”).
2. Best of Breed – buying and implementing different solutions for different areas (departments) of your business (e.g. Human Resources, Manufacturing, Sales, Financials, …) and maintaining interfaces between them.
3. Tailored Development Solutions – Software that is designed and developed for your specific needs (may also be to support only parts of your requirements and interface with other solutions from #1 or #2 above).

Each option has its advantages and disadvantages. In short:

• An ERP solution offers you a fully integrated solution, with no interfaces to maintain and technological updates as you upgrade to new versions. Also, you enjoy best-practices for most processes that are already implemented for you into the solution based on knowledge of many other businesses like yours.
  On the downside, you are usually locked with a single vendor for a long period of time, you may not receive 100% of your requirements in all areas and it may be a costly up-front investment for the on-premise implementation.
• Best of breed allows you to better fine-tune for every department both from a functionality perspective and price negotiation perspective. You may break your investments over time, as you gradually buy the different solutions.
  On the downside, you build islands of data, a mix of technologies and skill-sets required, that have also a cultural impact and influence cooperation and spirit across your company teams. You typically start investing in interfaces between all disparate systems, a practice that locks you down on two measures: lack of flexibility to accommodate business changes and high costs to maintain those interfaces.
• Tailored solutions offer a 100% match to your current and anticipated needs and may seem to require a lower investment up-front. You have flexibility in selecting your partner (developer) and perhaps the technologies used.
  On the downside, over time the solution does not keep up with technological advancements, business/regulatory changes, and require further investments in updating the software. You may also be locked with that developer partner (depends).

As this decision has significant implications on your business, up to being a show-stopper on one end, and a business growth engine on the other, I highly recommend to have an experienced, unbiased consultant helping you reach the best decision for you. Typically, an ERP is the way to go for most businesses today, if you find an ERP that meets 80% or more of your requirements from a credible vendor.