ERP vs. Best-of-Breed.

It has been billed as the "long-running debate," the "age-old battle" the "much discussed topic" What is it? It's the discussion of choosing between what's known as "Best-of-Breed" versus an "Integrated ERP" solution when selecting business applications/software

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Before addressing this question, I want to identify the variables involved in making a decision between the Best-of-Breed and Enterprise Resource Planning (ERP) approaches. Keep in mind that we're looking at the decision from your - the buyer's - perspective. Does your organization want to buy various components from the multitude of vendors in the marketplace (those who specialize in any one or more of the component parts)? Or do you instead choose to take a one-stop shopping approach to this selection process? Basically, the traditional view of Best-of-Breed represented the acquisition of different modules or applications from different vendors. Conversely, the ERP view of buying systems dictated that the buyer go to one vendor for all solutions.

SOME BACKGROUND

Over time, we have seen the pendulum swing from one view to the other and back again. In the early to mid-1980s, the mainframe-dominant market automatically defaulted to an integrated ERP approach - and you had few choices. From an applications perspective, you had a small number of choices for accounting software, and their scope was very traditional (General Ledger, Accounts Payable, and Accounts Receivable). The late '80s and early '90s saw a shift in vendor capabilities, which translated to a change in buying habits. As technologies progressed and platform offerings broadened, many applications vendors appeared in the Financials Applications market. The majority entered with specific niche offerings and ushered in the option and reality of Best-of-Breed. Over the last three to five years, there's been another shift. With even more advanced technologies emerging, buyers can use products from a variety of vendors fairly easily.

In looking at this trend over the last 20 years, it becomes evident that the vendors have been responsible for the shifts I'm describing because changing and emerging technologies have let new vendors enter the arena and offer a broad base of financials products. This crowding of the market has forced the "traditional" vendors to shift their market position, and, as a result, their product direction and strategic positioning. That means the definition of ERP solutions has changed. What used to be referred to as "MRP" or manufacturing-specific solutions has been broadened to include "BackOffice" or administrative applications and now includes financials, human resources, sales, and procurement activities.