The end of an era

It's surprising, but true: four years of economic adversity have had an unlooked-for impact on the IT marketplace, says Rue Dilhe, managing director of mid-market ERP vendor Exel Computer Systems. "We see it in our level of support calls, and when our people talk to customers and prospective customers," he explains. "Undeniably, there's been a shift in the best-of-breed versus fully-integrated enterprise system debate – with the tide turning against best-of-breed." To some manufacturers, this will come as a shock. There's no doubt that the debate around best-of-breed versus a fully-integrated offering from an ERP vendor was once very valid – and for many years, the choice between best-of-breed and a fully-integrated enterprise system was an important one, with the outcome making a huge difference. Each, in short, offered significant – and compelling – advantages over the other. Go with best-of-breed, ran the logic, and you got best-in-class functionality, as well as flexibility and configurability. Simply put, a manufacturer going with best-of-breed didn't have to compromise: the system usually did what they wanted it to do. The challenge was integrating that best-of-breed system with the other systems populating the business's IT landscape. On the other hand, go for the fully-integrated approach, and those integration costs were neatly sidestepped. And if there was a problem, end users weren't left with different vendors blaming each other. Upgrades, too, were simpler – and usefully upgraded the whole system at once, thereby also sidestepping synchronisation and version control issues. And up until the credit crunch and ensuing recession of 2008, says Dilhe, the debate around the merits of the two approaches ebbed and flowed quite naturally, with some manufacturers preferring one, and some the other. No longer, he reckons: the combination of technical advances and economic adversity has had a transformative effect. "For one thing, companies have become leaner, with fewer staff – and particularly IT staff," he notes. "And for another, enterprise systems have advanced to the point where customers can see that a modern fully-integrated system quite simply needs far less full-time IT resource. So the search has been on for ways to reduce the vendor count, and standardise around a single solution." To be sure, it's a development that for Exel has been a mixed blessing. In terms of sales and marketing, the business is finding a newly-receptive marketplace, with manufacturers who were formerly happy with best-of-breed now weighing up staffing costs, and seeing new merit in going down the fully-integrated route. On the other hand, the company's product support function has undeniably taken more phone calls. "We've seen a marked increase in support calls that appear to be directly related to a reduction in IT staff at the customer," notes Dilhe. "Previously, the customer might have been able to field frontline support queries themselves – and now, people have left or retired, and not been replaced, and we're picking up the slack." And people issues have brought another dimension to bear on the 'best-of-breed versus fully-integrated' debate, he adds: training and ease-of-use. "Quite apart from the impact on IT staff numbers, we see businesses looking at the whole issue of ease-of-use and training," he says. "They're realising that having multiple systems means training people in how to use multiple systems, and there's a cost and a danger in having systems that people aren't fully confident in leveraging to the maximum. Because in the real world, what matters is not so much what the system can do, but what users can do with the system – for no matter how good it is, a best-of-breed system doesn't run itself." In short, he explains, Exel is seeing the marketplace wake up to a set of messages that it and other providers of fully-integrated ERP solutions have been extolling for years. "You've got one supplier, who takes takes full responsibility – and no finger pointing between vendors as to why things aren't working," he notes. "There's no costly replication and duplication of data, or duplicated integration, maintenance and development costs: what you buy is already integrated, and offers inherently more robust data integrity. And overall support costs are lower, because there's only one product requiring support." Roll in the fact that fully-integrated solutions are generally easier to upgrade – because a manufacturer is only upgrading one system, and not multiple systems as well as the interfaces between them – and Dilhe is convinced that in these times of straitened economic circumstances, the battle is going Exel's way. "We're really seeing a change in the customer profile, especially among smaller manufacturers," he says. "They haven't got the time or patience for integrating and cross-referencing systems: when they add-on a new capability, such as field service management, they want it to work out of the box, and be already populated with the relevant data. Go the fully-integrated route, and we can flick on additional functionality like a switch – there are no integration layers to be built, or learning curve to climb." But that said, surely best-of-breed solutions offer better functionality? Why go for a generic solution – despite the persuasive arguments in favour – if what you really need is a best-of-breed system? Dilhe smiles, and leans forward in his chair. The answer, he says, depends on what is meant by 'need'. Many manufacturers, he notes, mistakenly think that fully-integrated ERP solutions aren't customisable – or at least, not customisable without making them unique and difficult to upgrade. "In the majority of cases, a standard solution will work well," he notes. "That said, we've moved to meet the needs of users where something extra is required by building a development layer on top of the system, which we call 'Adapt'. This allows manufacturers to take the basic software process and add their own 'tweaks' to it, and still keep to the standard software product, and the standard upgrade path. The customisation is in the development layer, and not the core product." Indeed, he adds, it will these days be a relatively rare set of business-specific or industry-specific circumstances where such customisation won't deliver a satisfactory solution. And certainly, the growing number of Exel customers who have moved away from multi-vendor best-of-breed IT infrastructures to Exel's standard fully-integrated solution would seem to support the assertion. TT Group, Metsec, Doncasters, Selex – Dilhe reels off the names of customers who have weighed up the pros and cons of the best-of-breed versus fully-integrated enterprise solution debate, and reached a conclusion. And despite the better news from the economy in recent weeks, he concludes, the merits of the fully-integrated route will remain compelling. "You can't wind back the clock," he says. "A business that has discovered the advantages of a lean and efficient approach to IT won't suddenly go best-of-breed, and take on more IT staff, and start creating integration layers again. Like the typewriter and telex machine, the era of best-of-breed software has had its day in the mainstream."