Monday, 9 February 2009

In support of best of breed software packages

My post on the NHS NPfIT also appears to have re-ignited a discussion on the benefits of buying a number of best-of-breed systems rather than one “umbrella” application from a single supplier (e.g. buying best-of-breed sales order processing, accounting, e-procurement, debt management, and similar applications, or buying just one supposedly all-embracing ERP system).

As you may have guessed, I’m a supporter of the best-of-breed approach – looking at an analogy, if you were seriously ill and needed treatment, I’m sure that we’d all want to see a doctor/consultant who specialised in treating our illness, not just any general doctor – and the same can be said for software applications – we would like to use a specialist supplier.

As with illnesses (we would deal with a cold and a serious illness differently), a lot depends on what applications are most important for our business/organisation – which applications can help best to increase sales, avoid cost or improve service? These are the applications where best-of-breed solutions should be adopted first. For many fast growing businesses, this means that they are happy taking a generalist view of, say, their finance function, whilst really focussing on benefits from implementation of best-of-breed CRM, marketing and sales applications geared towards their particular market. Meanwhile, established companies may wish to focus more on specialist applications to address costs and/or assist manufacturing or service delivery.

Yes, there are potential drawbacks of having to deal with a larger number of suppliers (rather than just a single, say, ERP supplier), and dealing with disputes between suppliers over whose problem a fault is, but these can be mitigated if the supply/support contracts are negotiated properly. I’d argue that you’re more likely to get better support from a smaller, best-of-breed supplier, who has a reputation to retain in his chosen (possibly, only) market, rather than a global supplier whose focus may not be in your chosen market.

Unfortunately, there can be too many of the wrong reasons for buying software solutions. The type of phrase “you can’t get fired for buying IBM” lives on in markets such as ERP and CRM – particularly when there can be a gravy train of seemingly never-ending services work for consultancies employed to shoe-horn a badly fitting generalist application into a business/organisation for which the application was never designed.

In the Public Sector I continue to be amazed at the number of authorities that have paid vast sums of money for full-blown CRM systems that are now used as just advanced call-handling/routing systems; or ERP systems where, after changing the organisation’s business practices so that they matched the way the ERP system worked, the promises of “one data warehouse for all financial information” is nowhere near realisation, even though the project is years late and way over budget.

All the big successes though, seem to be the best-of-breed applications, developed, implemented and supported by companies that really know their chosen market and requirements.

I’m a firm believer in solving the “how do you eat an elephant” riddle by taking “one bite at a time”. As regular readers will know, I’m not in favour of projects which take longer than a couple of years to complete – changing requirements and staff over any longer period than 2 years will elongate the project, put it over-budget and put at risk the planned benefits from the implementation. An incremental approach using best-of-breed applications will almost always be cheaper and faster than an attempt at a big-bang approach, and have the added benefit of actually doing what end user and management want, delivering real business benefits.

Hence my views on
How NHS NPfIT should have been procured. Small is not only beautiful, it’s also practical, cheaper and faster – and is more likely to succeed......

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