IT services and solutions for retail and hospitality

  • 9 May 2011

Pros and Cons of Best of Breed and ERP Solutions

AlanWhilst Enterprise Resource Planning (ERP) and Best of Breed are terms widely used in the Retail Sector, the meaning of these two phrases are not so obvious for those outside the IT function.

Firstly to provide some clarity; an ERP solution is one procured from a single supplier, whilst a Best of Breed solution is the implementation of a number of specialist applications from several specialist suppliers.

If you are currently deciding between ERP and Best of Breed, below we set out a number of pros and cons of implementing either solution:

ERP Pros:

1)      Increases efficiency and hence leads to a reduction in costs.

2)      Easily adaptable to changing business environments.

3)      Once developed it provides reliable information and ensures quicker processing of information, which reduces the burden of paperwork.

ERP Cons:

1)      They are expensive to implement and once established, switching costs are very high. This leads to increased supplier negotiating power in relation to support, maintenance and upgrade charges.

2)      Difficult to customise to meet specific industry needs as the solution is designed to be applicable to different business sectors.

3)      Re-engineering of business processes may damage competitiveness and/or divert focus.

Best of Breed Pros:

1)      Provides the optimal solution for each business area as it provides richer functionality and therefore satisfies more users.

2)      Suppliers have specialisms and this is reflected in the appeal of the applications. Supplier development budgets are focussed upon developing their applications, e.g. a supplier of a planning application will invest 100% of their R&D budget in planning functionality.

3)      Solutions can be implemented alongside existing applications thus protecting earlier ROI (return on investment).

Best of Breed Cons:

1)      Integration is required to ensure that the array of deployed applications provide a seamless solution in relation to addressing end-to-end business processes.

2)      The support model deployed to look after Best of Breed Solutions needs to be clearly defined and understood, with ideally a single point of ownership (or primary support partner) being identified, in order to counteract “grey areas” between suppliers and their individual and collective responsibilities.

3)      Implementation projects need to be managed by a single point of contact who holds the “helicopter view” of the end-to-end solution and who can bridge the gaps between the different suppliers.

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