Why Implement ERP and Best of Breed Systems Together?
Integration of ERP and SaaS solutions (Best of Breed) is preferred by organizations which strive for efficient supply chains and integrated business processes. Though both the systems have their own benefits, their integration enables organizations to have higher leverage against their competitors. There are many benefits of integrating ERP and Best of Breed systems; improved efficiency, improved productivity, reduced costs and increased scalability being a few. According to a Datix Inc study, 67% of the participants admitted that they need a solution with more industry-specific functionalities than what their ERP systems offer. This clearly highlights the importance of integrating Best of Breed procurement solutions with ERP systems for an efficient supply chain.
Nonetheless, this article doesn’t talk about the integration of these two systems. Instead, it talks about the parallel implementation of ERP and Best of Breed systems and lists out a few benefits of this implementation strategy. Typically, organizations implement an ERP followed by which stand-alone software solutions or a software suite is integrated with the existing ERP system. However, this doesn’t have to be the norm, especially for fast-growing or large scale organizations that face issues of scalability and efficiency within months of implementing an ERP system.
Parallel implementation of ERP and Best of Breed solutions can be considered owing to the following benefits:
1. Avoid Mundane Data Transfer
When both ERP and SaaS solutions are implemented together, there is no need to worry about transferring and syncing data between the two systems. Procurement departments will have a hard time migrating and getting used to the new systems if the implementation is done in phases instead of parallel implementation.
2. Better Forecasting
There are many instances where large and fast-growing MNCs require more than an ERP to manage their business processes. Rather than waiting for the D-day to arrive when additional software needs to be integrated with the ERP, parallel implementation of both the systems is an efficient forecasting strategy. For instance, Bruce Hagenau, President of Metcam Inc. (revenue of $25 million) anticipated that there will be a situation when the company would need SCM functionality and opted for a solution that delivers both ERP and SCM functionalities as a part of one integrated package.
3. Reduced IT Overhead
Owing to the parallel implementation of both ERP and SaaS systems, the IT department can avoid a considerable amount of operational and maintenance costs since there is no need to maintain two separate systems as in the case of a phased roll out. On an average, businesses spend $1,208 and 31.5 yearly on each employee. With parallel implementation, organizations can avoid the training overhead with a single training program.
4. Reduced ROI Time
Be it ERPs or stand-alone software or suites, once implemented, organizations expect ROI from these systems. When both ERPs and best of breed procurement systems are implemented together, organizations don’t have to wait longer to reap the benefits and instead see the benefits translate as increasing ROI within a short period of time.
5. Seamless Integration
There is absolutely no doubt on the need for integrating ERPs and Best of Breed systems. However, organizations need to consider the new problems that faulty integrations can bring in such as improper sync of data and the productivity hampering that follows. When the systems are implemented in parallel, the possibility of a faulty integration is reduced as both the systems are implemented together, ideally by the same IT team.
All implementation and integration approaches have their pros and cons. The approach adopted, however, doesn’t solely depend on these pros and cons. Each organization has its own set of requirements, allocated budget and timelines to follow; meaning each organization chooses its implementation strategy based on its requirements. That being said, parallel implementation is ideal for those organizations that are tech-driven, fast-growing and planning to implement a legacy ERP system, having the Best of Breed system in the implementation pipeline.