Deciding between ERP and best-of-breed applications is no longer an issue that involves a balancing of clear tradeoffs. Over the past few years, ERP vendors have moved into the best-of-breed space. They have done this in two ways. First, they have enhanced the functionality of their internally developed modules. Second, they have acquired and integrated best-of-breed applications into their ERP suites.
Manufacturers are increasingly able to do a one-stop-shop with the ERP vendors. Infor’s LN ERP system for discrete manufacturers, for example, now comes equipped with Kanban management, a planning engine, and a module that supports lean and just-in-time modes. SAP’s product for the food and beverage industry comes equipped with functionally-rich modules for WHM (warehouse management) and EHS (environment, health and safety).
Having said this, however, many manufactures still acquire best-of-breed applications to fill gaps in their ERP system’s functionality. A manufacturer should consider three broad factors when deciding between integrated ERP and best-of-breed. In relative order of importance, these are:
- Functionality: does the ERP system provide the necessary functionality? If not, is the functionality available in a best-of-breed application?
- Ease of integration: how difficult and expensive is it to integrate the best-of-breed application with the ERP system; and
- Upgrade path: to what extent would the integration of a best-of-breed application impact ERP upgrades and migrations to new ERP releases.
From what we see, manufacturers that operate stable, legacy ERP systems are more likely to extend functionality with best-of-breed applications. However, companies seeking new ERP systems are less likely to acquire best-of-breed applications because many of today’s ERP systems are functionality-rich, industry specific solutions.
Is your company trying to pick software, whether best-of-breed or ERP? Check out our firm’s systems selection services or contact us.
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