How to Consolidate Business Systems Effectively
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How to Consolidate Business Systems Effectively

In the 1990s the technology world fell in love with the term “Best of Breed.” The term was coined to represent an approach to business technology where you pick the best possible products and then integrate them to each other to form a holistic business application. Best of breed (in theory) was a great approach back then but the software wasn’t quite ready given the available technology. Best of breed put too much emphasis on the integration which was often custom and non-standard varying widely from company to company. This made it costly to develop, difficult to maintain, and introduced too many incompatibilities as various applications required different versions of the underpinning platform. For example, application A requires application B to be at the 7.0 or higher release but application C is not compatible with 7.0 or higher. So, what do you do?

In the years that followed most accounting and ERP software vendors tried to fix best of breed issues by either building or acquiring the most popular third party applications and then ensuring that they worked well with the core system or they focused on building closer relationships with strategic third party software vendors to ensure that their applications were compatible with their latest releases and other strategic applications.

Today companies live in a plug-and-play world. Like an app for our mobile phones, we expect that it’s easy to just download a business application and have it work without too much hassle. This is certainly becoming more and more the case but we still have a long way to go before we can truly say that business software is that easy to deploy.

So here’s the dilemma – the best features are often not available from our accounting or ERP vendor. But we don’t want to introduce too many third party products and we don’t want to spend too much on customization or integration because we now understand the costs to maintain custom code and the problems associated with code lock that prevent us from upgrading to new versions that have more functionality. So what’s the best approach?

First, companies should try to work with as few software vendors as possible if they can still meet their goals. The vendors they choose should be heavily vetted to ensure that they are reputable (proven track record), stable (unlikely to go out of business in the next few years), and strategic to the core business application. For example, it’s probably a better move to buy a document management system that has been integrated for the past ten years with hundreds of customers in tandem with your accounting or ERP software rather than to buy the best document management system on the market and then pay someone to integrate it with your accounting or ERP system. What you give up in functionality will likely be returned ten-fold in stability.

One way to consolidate to a fewer number of business applications is to look for creative ways to utilize some of the applications you already own or could potentially purchase. For example, we represent Solver BI360 which is a really good business intelligence and reporting platform. It’s up there with the best of the midmarket BI tools. But (and this is important) – it also handles budgeting – something none of the other BI applications can manage so you’re essentially getting two products in one. Another example is to use your document management software to automate accounts payable invoices which is a common practice among document management vendors. If you look hard enough and think long enough you’re going to find new and creative ways to streamline your business application portfolio.

If you’re running more than a half dozen critical business applications then you’re probably at the point where you should re-evaluate your core system and look for a replacement. It’s not uncommon to have a separate system for CRM, human resources and payroll, and some other parts of the business but when you start to see invoices from a dozen software vendors you need to start asking some serious questions.

SHOULD YOU REPLACE YOUR ERP ACCOUNTING SOFTWARE?

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