Here's why your business will benefit from multiple best-of-breed software packages in place of a barely adequate all-in-one system that inspires no-one.
The debate about best-of-breed vs. all-in-one software is one that’s been waged for time immemorial. Or at least it certainly feels that way.
Turn to the internet for help and you’ll find impassioned arguments for both sides, as well as heaps of sitting-on-the-fence articles invariably ending with something like “ultimately, it depends.” And to be fair, they’re not really wrong - a one-size-fits-all approach can’t be applied. Every company is different.
For some, all-in-one may be the right choice. A huge enterprise managing multiple factories, distribution centers and supply chains for instance. But I wish to make the case for best-of-breed, and explain why in the case of professional services organizations - where staff sizes don’t number in the tens or hundreds of thousands — I believe it’s the direction you should be headed in.
Firstly, let’s be clear on what we’re talking about when we say best-of-breed and all-in-one.
Best-of-breed strategy calls for selecting and implementing the best fit solution for a particular business function. The approach is focused on delivering the most comprehensive functionality and usability, targeting a very specific group of users; sales, operations, finance, etc.
All-in-one strategy is about consolidating each function’s requirements into a single system from a single vendor. The approach accepts that users with oftentimes very different wants and needs must compromise to achieve the goal of being accommodated into a single environment.
All in One
Before I make the case for best-of-breed let’s examine the arguments made in favour of adopting an all-in-one system. These are:
- Single vendor relationship - since it’s a solution from a single provider I won’t have to deal with multiple vendors
- Headcount - an all-in-one vendor has more people so they will be able to serve me better
- Integration - large providers are one platform, so integration overheads are non-existent
- Simplified training - there’s only one system, so it will be easier to train my employees
- Future proofing - I may not need all of the tools they’re giving me now, but it’s good to know they’re there when we need them
On the face of it they all seem like solid cases. So, let me swiftly put a sword straight through them and explain why they’re all in fact weaknesses.
Single vendor relationship
We’ve all heard soundbites like “I want one neck to choke” when it comes to vendor management. However, this is applying the logic that you want to put all your eggs in one basket. You’re stuck with one provider for better or worse. So, if they decide to raise prices, release poor upgrades, or suffer system outages your options are limited, and you have no leverage to improve matters.
Size isn’t a pre-requisite for quality service. All-in-one vendors have many priorities and are generally much less flexible. This should be given serious consideration. For example, will you able to influence the roadmap of an all-in-one vendor? If you need action fast, could you get someone of seniority on the phone?
All-in-ones are only true-all-in-ones if the vendor has built it themselves. This is rarely the case. The typical “integrated” suite isn’t usually built and developed by the vendor but acquired. They scoop up smaller point solution companies and cobble them together into a stack which really does little more than create the illusion of seamless integration.
Bringing staff up to speed on only one system certainly sounds more straightforward. But if you’ve never attempted to train a group of creative-types in operations on a system that’s more suited to a finance audience, you’ll probably not appreciate that the reality can be anything but! Try it. It will be fun. Honest…
Since all-in-ones are less modular-based, you usually end up buying more functionality than you need. Often, when you do grow into it and understand what you want, you’ll find the functionality doesn’t really match up. Rarely is it “future proofing”. It’s usually more “paying-for-what-you-don’t-need-and-won’t-need-whilst-investing-in-older-technology-oofing”.
Best of Breed
Ok. That’s great. But what is it about best-of-breed that’s so compelling?
- In-depth functionality
- User acceptance
- Less time to implement
- Not tied to a single provider
Let’s take these points in turn and deconstruct them a little.
Whilst all-in-one systems are trying to be all things to all people, best-of-breed systems have a much narrower area of focus. This allows them to carve their niche deeper and deeper with specialist functionality. They also tend to get updated more frequently, meaning they pull further ahead of the all-in-ones that merely dabble in their area of expertise.
The fact that best-of-breed solutions offer more powerful capabilities within their functional areas of focus can increase user acceptance and make it easier for end-users to learn.
Let’s use creative users as our example again. Which system is going to have the highest chance of success? A system brimming with tools built specifically for them and pretty visual layouts, or one that’s fundamentally for accountants and offers boring (sorry accountants!) lists of numbers and outputs? It’s not even close.
Less time to implement
Generally, the speed of implementation depends more on how quickly your team is able to move and less on how fast the provider can move. Whereas all-in-one systems can take many months or even years to implement, best-of-breeds can usually be up and running in a matter of weeks.
There’s no need to buy or change existing data center server, storage, security and network infrastructure. Also, technology has advanced and API’s are now so mature it’s like you’re using a single system - especially when compared to acquired all-in-one systems. Having a solution sustainable to change is a huge long-term benefit as you can add additional systems or review solutions on a case by case basis and switch provider if necessary.
Not tied to a single provider
If – heaven forbid - there’s a failure in one system it will only affect that part of the business, while the others will plough on undeterred. For best-of-breed vendors it’s in their interest to make sure that you achieve your objectives. After all, if you don’t like the product or the service, it’s a lot easier to switch from one provider to another.
Can you give me a real-life example of where best-of-breed trumps all-in-one?
Sure. A classic example is the argument about integrated project accounting; the wonderful world of business development, job costing, resource planning, etc, and the general ledger; journaling, tax, fixed assets, and so on.
At a glance, the footprints of project accounting and the general ledger systems may seem to overlap. But ultimately that’s not the case. Not really.
The main users of project accounting are operations – they are ultimately client and delivery focused and they have nothing to do with core finance. In contrast, finance users are focused on accounting – recording journals, preparing financial statements, etc.
Operations and finance do not party together. They have different interests, work at different paces and they would barely recognize the other group’s software requirements as useful to them. In fact, the only areas that are remotely connected are invoicing, purchasing and revenue recognition.
The key point is this: Project accounting is not a system for finance. It’s a system for operations to run their projects.
The general ledger is a system for accountants—not operations.
They are two very different audiences that want very different things. So why try to squeeze both a square peg and a round peg into a decidedly triangular hole?
If you’re currently using an all-in-one project accounting and general ledger system, this may seem a little alien at first. But here’s a simple experiment…
Ask a project manager: When was the last time you went into the debtors account?
Ask a finance user: When was the last time you looked at the project a transaction was on?
99 times out of 100 they won’t have done.
And this is what it boils down to. Accountants will frankly use any old ugly system. They’ll find a way to make anything work god bless ‘em. Even if they have to cobble together a bunch of workarounds. It’s the way they’re wired.
But you have next to no chance of convincing a user in operations to embrace an ugly system that has more in common with a finance audience than it does with them.
In my experience, an all-in-one project accounting and general ledger system is almost always centrally controlled. Why? Sometimes the company wants that, which is fine. But more often than not, operations have hit the eject button and bailed out, leaving finance to sweep up and make it work.
So, how do you engage operations to get the ultimate productivity and profitability gains? The answer is best-of-breed solution with high-quality integrations. Allow operations to use a tool that’s made with them in mind and plays to their strengths. And give finance a general ledger of their choosing, not just limiting them to whatever the all-in-one happens to offer
Hang on - won’t finance need access to project accounting and the general ledger? Yes, they may well need user accounts for both. But that’s what, 5% of your workforce? The 5% that will make the best of any system. Whilst the other 95% who are much more finicky are free to enjoy a system better suited to them.
I’ll leave you an anecdote from a multiple-hundreds-of-users prospect that currently use an all-in-one system. They were discussing the path to (a) rip out the existing combined system and (b) put in two new best-of-breed systems. To make it “easier” the COO suggested “why don’t we just integrate CMAP into the existing GL?”