ERP vs. Best-of-Breed is History

Jim LetartDo you remember the old days when the hottest topic in supply chain software evaluations was whether it was smarter to go with the “good enough” applications from the major enterprise resource planning (ERP) vendors or to go with the superior functionality of the best-of-breed vendors even though integration was a concern? IT argued that having a fully integrated approach and “one throat to choke” was more important than covering 100 percent of users’ needs. Users argued that enabling them to do their jobs thoroughly and efficiently was more important than minor integration issues. Both sides were right, and wrong.

Regardless of which side of that argument you were on in past, it no longer matters because today’s much more dynamic and complex marketplace makes both options obsolete. The concept that one corporate system can do all things for all people was never very viable, but is even less so now with the complexity of omni-channel fulfillment requirements and the need to respond agilely to volatile consumer demand. And the exacting requirements of customer segmentation and personalized offers make “good enough” solutions no longer good enough.

On the other side, providing seamless shopping experiences and running integrated, agile supply chains isn’t possible with a bunch of cobbled together best-of-breed solutions. Even if you can get the integration working right, the rapid rate of market change means you will have to do it over and over again, which is both too time-consuming and expensive. Neither the monolithic approach nor silos of automation are effective, therefore, for today’s volatile marketplace.

Business Support Platforms
Every business executive knows that to be successful in today’s market requires a combination of agility, collaboration, business process optimization and real time analytics. There is no room for silos in business operations or in the supporting technology. Companies have to work collaboratively, both internally and with their trading partners.

Operationally, this means that business process workflows must seamlessly cross organizational and functional boundaries. It means that planning and execution are no longer separate processes, but instead are part of an iterative loop where plans are adjusted in real time as constraints and disruptions occur during execution. And it means that the technology supporting these borderless workflows must not operate in processing silos either.

The alternative that has emerged to meet these new, more complex and real-time processing requirements is neither an ERP nor a Best-of-Breed system, although it has the best elements of both. It is a business support platform.

A business support platform is an integrated solution that supports end-to-end business functions such as supply chain management or retail operations. Like an ERP, it is a totally integrated solution operating off of a single data model and data management structure, but without the burden of all of those back office systems like accounting or general ledger. Rather than trying to be all things to all people, it is a very focused, in-depth solution for a particular area of the business. Like Best-of-Breed systems, a business support platform has deep fit-for-purpose functionality, but in an integrated platform rather than as standalone systems. Thus, a business support platform has the best of both options without their downsides.

A key benefit of business support platforms is their comprehensive, integrated approach to specific business issues. For example, business leaders and industry analysts have long claimed that supply chain planning and supply chain execution should be closely integrated. That has never been more true than today when rapid demand changes and shifting constraints often render traditional plans obsolete before they can be executed. A supply chain business support platform tightly integrates and optimizes planning capabilities that are constraint-aware with flexible execution functionality that can agilely react to revised plans in an iterative process informed with deep analytics and modeling capabilities.

Another aspect of a business support platform that can be quite helpful is deploying them in the cloud. Since most large corporations today have many sites and supply chain partners spread around the globe, coordinating and integrating these operations to support supply chain visibility and process workflows can be difficult and time-consuming. Deploying solutions through the cloud alleviates many of these challenges and helps ensure everyone is always up-to-date and that business processes, data structures and workflows are consistent.

Does this mean business support platforms replace ERP or Best-of-Breed systems? No, they still have their place. ERP systems handle important back office functions and share data with the business support platforms. Best-of-Breed systems continue to offer specialized innovation that often feeds into business support platform processing. The point is that it is no longer a choice between ERP systems and Best-of Breed systems. They both have their purpose, but neither adequately supports the specialized end-to-end business processes required by today’s complex, volatile and integrated marketplace. Business support platforms now serve that purpose and enable a level of proficiency and throughput not previously possible.

In his role as Director, Thought Leadership at JDA Software, Jim LeTart is responsible for developing thought leading content to support JDA’s Plan to Deliver suite of integrated retail and supply chain plan and execution solutions. Jim came to JDA in 2013 through its merger with RedPrairie, where he spent over 13 years in various marketing leadership roles. Jim has over 35 years of sales and marketing experience in the computer technology industry, and is a frequent speaker, writer and blogger on how technology can improve business processes and outcomes. Jim has an MBA from the University of Michigan and a BSME from Marquette University.

Comments

  1. It is very true that an integrated supply chain planning and execution is vital to the volatile demand driven business today. However, it still posts a challenge that each industry segment has peculiar requirements and business processes. IMHO, it would be more satisfactory to define an industry-specific platform rather than to provide a general purpose solution to all the industry segments.

  2. To be successful in your business operations in today’s market, every business executive must understand the need for a combination of factors, such as business process optimization, collaboration, real time analytics and agility. Additionally, making such key processes work has made it clear that planning and execution are no longer separate processes. They are instead part of an iterative loop, where plans may be executed in real time, since constraints and disruptions occur during the execution. Paying close attention to this process is important to make your business flourish in today’s market.

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