Companies constantly seek better ways to achieve profitability and meet operational goals. The search for the right technology solution is always a very important part of that equation. Often they must weigh the option of whether to use an all-in-one software /ERP (Enterprise resource planning) solution or a “best-of-breed” solution. With so many choices available, it can be hard to evaluate which is the best choice over the long term.
You may have heard that bigger is better, less risky, or more convenient. It’s time to set the record straight. Often, considering whether to go for an all-in-one vendor or a specialist best-of-breed vendor can be overwhelming. Take the time to understand and look at what each option means for you.
What is All-in-one software?
All-in-one software combines several different functions – such as accounting, billing/invoicing, workforce management, benefits, etc. – all into one platform.
What is a best-of-breed solution?
Best-of-breed refers to a software solution focused on performing a specific function very well – such as workforce management. Also, typically developers build best-of-breed solutions to integrate with other software. This is in order to enhance that software’s functionality or fill in specific functionality gaps.
How to know which one to choose?
At first glance, the all-in-one software seems like the best and most logical choice. The benefits usually touted by their vendors are:
- You have only one vendor to work with
- Fully integrated solution
- Any additional modules are “free”
Considerations for assessing All-in-one software
Some of these benefits are true. But, here are some points to consider when comparing solutions:
- Yes, there is generally only one vendor to work with. However, the truth is that most ERP solutions are really made up of different software solutions that were either developed separately or wrapped in by acquisition. All-in-one products often began life as point products, but have been expanded to accommodate increasing demands from customers.
- The “fully integrated” solution is actually a combination of different integration technologies. Theses range from flat-file import/exports to an assortment of web services options.
- The likelihood of an all-in-one software vendor integrating with all of your local and niche vendors is rare. So, if finding an excellent Workforce Management system is your primary objective, you may be forced to make some changes. You may have to replace your HR, Payroll, and Accounting systems as well to adopt their all-in-one platform.
- One of the biggest drawbacks to all-in-one software is that although it “does everything” the performance of each module is often average at best. Although certain functions may be excellent, others almost certainly are not. As the developer expands beyond their core offering, later modules may not be of the same standard.
Why best-of-breed is generally more successful
Best-of-breed solutions are the exact opposite of all-in-one software. By design, best-of-breed solutions perform a single function well. Best-of-breed solutions are also developed around the core competencies of the software vendor, built upon their years of experience. This is then channeled to create a product that outperforms the equivalent module in an all-in-one solution.
It is important to remember that the best-of-breed solution provides specific benefits all-in-one software often fall far short of:
- They focus on the specific, core business needs of the organization.
- There is actually more integration flexibility, as best-of-breed vendors have more expertise with data transfer to/from their solution. Best-of-breed vendors make it a priority to integrate with, for example, the best HR technology localised by country and providing the APIs to work with a diverse ecosystem.
- For best-of-breed vendors it’s in their interest to ensure that you get the maximum return on investment from their system. After all, if you don’t like the service or the product, it’s relatively easy to switch from one provider to another. With most all-in-one platforms you must replace the entire platform if you aren’t happy. You can’t replace just the specific piece that isn’t meeting your standards. This often means having to invest in another six-month project.
In the end, you will benefit from having a tool that is truly excellent at one task. It provides you with a greater chance of meeting your business requirements and operational objectives. Assemble a collection of best-of-breed solutions, for only those functions you need. Your business will have a powerful suite of tools that perform each function perfectly to drive your processes. Most importantly, you will never end up paying for unwanted and unused functionality.