Many enterprises choose to utilise an Enterprise Resource Planning (ERP) system for their business software; a suite of products from one supplier designed to work together. But when in the market for accounting software, is an ERP system really worth it?
When choosing a finance system, is it best to buy into a suite of software, or should you pick and choose the best solutions for each department?
Many enterprises choose to utilise an Enterprise Resource Planning (ERP) system for their business software; a suite of products from one supplier all designed to work together. But did you know there’s now another option thanks to interoperability, known as choosing best of breed systems? This is when organisations choose different components from different suppliers to meet the individual needs of each department, without having to sacrifice inter-system data sharing.
What is an ERP system?
ERP typically brings you a Finance system, along with CRM, HR, Payroll and Sales all in one bundle. You might also get Assets, Procurement, Distribution and E-commerce thrown in too. It’s all from the same supplier, and all hooked up to work in tandem. But is a suite the best way to go?
ERP can be the perfect package. Every business system you could wish for on one platform, all integrated and all ready to go. But look a little deeper. It might not always be ideal. Imagine for example if Payroll had found a platform that solved all their problems, but the platform didn’t tick all the boxes for Finance. It’s swings and roundabouts – where you gain in one department, you might lose in another.
So let’s look at the alternative. Instead of choosing a suite of products from one supplier, you go for best of breed systems. That means all your departments, including Finance, choose the very best platforms that are right for their needs.
Integration and data sharing
With a big organisation, it’s vital that the business systems are able to work seamlessly together. With systems able to swap information in real-time, you can be sure everyone across your business can get the data they need, when they need it. There’s no manual entry, which means you can say goodbye to glitches caused by human error, and free up your teams to work on more productive tasks.
With ERP, all the platforms on the suite are able to talk to each other seamlessly. However, if you want to introduce new components you may struggle as ERP suites aren’t designed to communicate with other systems or software.
On the other hand, with a best of breed scenario, all your platforms can talk to each other and share data, thanks to web service technology. So it doesn’t matter which supplier you use for which piece of kit, your organisation is still joined up and singing from the same hymn sheet.
Interoperability vs ERP Connectivity
Many organisations are choosing to go with a best of breed set up, and benefiting from the sharing of data between different systems.
So if both systems have the ability to share information, which is the best option? Let’s compare Interoperability with ERP connectivity.
Data sharing compatibility
With ERP, all systems within the suite are designed to talk to each other, but not with 3rd party software. That’s a bit like if Apple Macs only received emails sent by Apple Mail. You might be happy to have nothing but Apple products across your business, but what happens if a new feature comes out on an Android phone that’s just perfect for what you want?
Let’s move to Interoperability. Take a look at your mobile phone? It can work perfectly fine with the laptop it’s sat next to, even if one is Windows and the other is Apple. And take a look at those emails. Let’s say you’re using Google and Gmail. That doesn’t mean you have to use a Google device to access them.
Windows, Gmail, iTunes, they’re all from different suppliers, and they all work together seamlessly. Sharing data, talking to each other and working perfectly in real-time. Interoperability is already all around us. And what works for your personal devices on your desk will work for the platforms across your organisation.
Seamless, real-time data transfer
How do the solutions compare when it comes to real-time, automated links? ERP always used to be the way to go for this one, as different systems in the suite could already talk to each other seamlessly because they were all created using one unified ‘language’. But things have changed in recent years, and we’re now seeing Interoperable solutions where data can be translated across different programming languages just as easily.
Getting it all set up
The next thing to think about is the set up. If you choose Interoperability, the suppliers will take care of everything for you, installing different systems and getting them to talk to each other. Likewise with ERP, the supplier is responsible for getting you up and running – that’s good news if you want the convenience of dealing with just one team, but not so hot if things go wrong. What happens if there’s a big wait before you go live, or you need some hefty maintenance? You could be without ALL of your systems in one fell swoop.
Finally, there’s the issue of being able to access data in real-time, so you can make decisions on the fly. Both Interoperability and ERP solutions offer you this. So it’s really a case of weighing up the other pros and cons to decide which suits you best.
So what are your options?
It’s only natural for your business to consider the range of systems and platforms that are available. So if you’re looking to upgrade, have a think about the impact this could have across your organisation. Typically, with ERP you have to update all the systems within the suite at once, but with so many systems involved it can be inevitable that System B takes a little longer to update than System A leaving you temporarily working with two incompatible pieces of kit. However, with a best of breed solution, you can pick and choose what you upgrade and when and the data links aren’t reliant on each programme running on a specific version.
As with every business decision, the cost is a key factor. Do you want a suite of updated software implemented by one supplier, but have to fork out in one go, or would you rather let each department upgrade through their own preferred partner and spread out the cost over time? Only you know the answer to that one...
And the verdict?
So how does Interoperability compare with traditional ERP? In reality, it’s all down to whichever option bests suits your business goals. ERP gives you the simplicity of dealing with one supplier when buying into a whole suite of products. Whilst by choosing interoperable systems, you’re free to chop and change as you see fit. You can upgrade or switch whenever you need to. It keeps your suppliers on their toes too. Rather than locking you in to a fixed contract, they have to work to keep you happy. So you’re calling the shots, not them.