Best of breed is back
The very nature of the natural business cycle has meant businesses are beginning to re-evaluate their reporting, financial reporting, sales reporting and budgeting needs, and are beginning to turn away from standard ERP solutions and towards more user-friendly, "best-of-breed" packages, argues Kevin Phillips, managing director of Cape Town-based idu Software.
In the early days of computing - back in the 1970s and 1980s - there was a plethora of niche best-of-breed products from which companies could select. Customers could pick and choose the product best suited to their individual needs.
The problem that resulted from this was that there were hundreds of different products around, but they were pretty much standalone. This resulted in a complex array of integration layers to get the products talking. Unfortunately, in those days, good products or standards to facilitate the necessary integration didn't exist, and to complicate matters further, there were numerous different databases in most environments.
The result of this was that companies required larger and larger IT departments to try to manage application integration. Clearly, this situation called for the development of something that offered a more comprehensive answer to the market's needs. There was a real need for one product to be able to "talk to" another and inter-relate with it.
At this point the ERPs (enterprise resource planning systems) entered the scene - company-wide computer software systems used to manage and co-ordinate all the information and functions of a business from shared data stores. Effectively, these were one-stop-shop products that were designed to do everything.
Big-name multinational companies offering what seemed to be a comprehensive solution to the company's needs provided an apparently attractive value proposition.
The downside of the ERP is that it offers but a single solution. If it doesn't exactly fit a company's requirements, then the company has to change to fit in with the ERP.
"ERPs, while being functionally rich and optimal transaction processing engines, almost of necessity sacrificed user-friendliness," Phillips says. "In today's world, non-financial managers in business need to be able to take ownership and this is difficult with ERPs. Managers need simplicity of use and this is what best-of-breed packaged software can deliver.
"Many companies have previously taken the comfortable option of a large international vendor - it's a safety thing. You buy the big-brand name and believe that all your troubles are over because you've bought the Rolls Royce. Often, however, the big-name brands are not always best suited to all of the company's needs. There are high overhead costs and there is the additional problem of complexity of use, which requires expensive and time-consuming staff training."
The circle turns
Now here we are today and there are only two dominant players left in the database market: Microsoft and Oracle. With developments in technology, integration is no longer the issue it once was. This has taken away the major obstacles to combining different products in a single commercial environment. It is not only possible, but relatively simple to integrate a best-of-breed product with an ERP system, indeed most popular ERPs today actively support such integration. The possibility of choice exists once again.
"This is how the circle has turned full cycle," argues Phillips. "Companies are realising that whereas ERP offers you but one choice, best-of-breed offers many. Furthermore implementation of best-of-breed products tends to be fast and focused, as does training and uptake.
"The future clearly lies with companies that can offer products best suited to each potential customer's individual requirements, rather than the old one-size-fits-all solution. Best-of-breed is back!" Phillips concludes.