Best-in-Class ERP vs Best-of-Breed ERP vs Full Suite ERP
There are, historically speaking, three main ways to create a full-scale ERP solution for your company: full suite, best-of-breed, and best-in-class.
- Full Suite ERP: a holistic suite approach, where all (or most) modules are created by the same company;
- Best-of-Breed ERP: choosing disparate systems, that don’t necessarily integrate, from different vendors; and
- Best-in-Class ERP: an approach that cherry-picks solutions from different companies to integrate together, to build a one-of-a-kind system.
In the late 1990s, Best-of-Breed ERP surpassed the reigning approach, Single Suite. Once the dot-com bubble burst, though, single-suite vendors were once again on top. Since then, it has been neck-and-neck between the two. Then, as more and more businesses shifted their work to the cloud, the rise of the Best-in-Class ERP approach gave both older strategies a run for their money. Of late, the terms Best-of-Breed and Best-in-Class have become synonymous, in part due to the prevalence of cloud-ready open API architecture becoming a best practice across platforms. Which comes out on top?
We’re going to take a closer look at all three to help you decide which is best for you and your business. When it comes to the latter 2, we’ll look at what has historically set them apart and the reasons they’re now interchangeable.
The Suite Approach
The Suite approach is a holistic method where a single vendor is chosen, a vendor with their own software, such as: CRM, eCommerce, HCM, PSA, Payroll, BI. Think of brands like Microsoft, who produce a range of solutions for different business functions. Everything within the suite has a consistent user interface, and because they all come from the same source, they should integrate seamlessly. This means that automatic updates can be done without the risk of breaking integrations.
Larger brands, like Netsuite and Microsoft, present a lower risk, in financial terms and in regards to support available.
Many Suite vendors will bundle the modules associated with certain industries and sell that as a fixed industry-specific bundle. Often, bundled prices can be lower than you would pay in either of the two other methods, because the vendor can provide volume purchasing discounts.
However, it should be noted that the suite modules may not meet all of your business requirements, though, meaning customization or manual workarounds are required. Suite modules are notoriously rigid, and custom connections are at risk of breaking due to updates. With bundling, it is possible that you may pay for things you simply never use or have no use for. There are also some security risks associated with suites that open all modules to breaches if someone gets in through a back door anywhere in the system.
A Best-of-Breed ERP system was initially built by choosing individual software for each business function, depending on the needs of the department. These solutions were usually incredibly powerful for the job and would cover all functionalities that are needed on a departmental level. Departments retain responsibility for their own software.
Generally speaking, the implementation times for standalone software were quite speedy. This is due, in large part, to the fact that there was little to no exchange of information between each of the modules; each existed as a data silo.
Perhaps the biggest downside to this approach is that whole-business visibility is tricky. All of your data exists in a variety of locations and the only way to analyze it is through manual spreadsheet analysis and historical reports, instead of real-time dashboards. This approach traditionally meant complex management of multiple vendor licenses and contract terms.
Customizations that may facilitate data exchange were not impossible, but they were very involved and pretty difficult, as the dedicated solution was not likely to have been written with integration in mind. That being said, there were some trendsetter Best-of-Breed providers that utilized a Service Oriented Architecture which enabled easier modular integration. As society shifted to a more cloud-based method of business operations, and as open API architecture with loose syntax (like REST) becomes ubiquitous, the integrability of most Best-of-Breed ERP platforms means that they essentially become Best-in-Class. This is why the two terms have become interchangeable.
Best-in-Class ERP springboards from the Best-of-Breed principles, in that it searches for the strongest solution for each part of your business. For example, Sage Intacct is an accounting solution – the only one preferred by the AICPA. However, most small- to medium-sized businesses – especially those that foresee rapid growth and development of the business model – need more than just financials. This is where the Best-of-Breed philosophy comes into play. The Sage Intacct team knows the software is great at financials. By that same logic, they know other developers are best at their own solution. So, part of their business model is high-quality integrations with many market leaders in their respective spaces, like Salesforce and Criterion.
Most of these platforms use an API system that is based on REST architecture. REST is a way of creating APIs that are particularly suited to use with cloud options, as they use less bandwidth than other types of APIs. Using REST API means that, even if there is no current integration available on their marketplace for the program that a user wants to retain, it is easy to access the necessary documentation and make those changes. There are also no strict standards for REST APIs, making it simpler to implement and since REST is strictly an architectural style, multiple integrations are easier to handle.