Integrated versus best of breed

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Discussions have been ongoing over the years regarding the benefits of having a totally integrated system as against a system consisting of various “best of breed” modules. People have different views on this topic but the jury is probably still out on what is the best option. The argument for a single integrated system has been based around versions of that old chestnut “one version of the truth” whereas the other side claim “best of breed” status, even if that has not been established.

Maybe we should look at the actual requirements and work from that to establish the best style of system. So what do we want from our systems;

  • Operational staff to have a facility that is easy to use yet effective
  • Operational management to be able to easily manage their areas of responsibility
  • Operational management to receive reporting that provides a full picture of their area of responsibility
  • Clients and other stake holders to be able to access the system in their area of interest
  • Administration of the system to be as automatic as possible
  • Basic accounting functionality so that customer receipting and supplier payments are managed
  • Accounts staff to have a facility that is easy to use yet effective
  • Management to have easy access to the information they need to manage the various divisions
  • Management to have the information needed to manage the company
  • Accounts people to not upset Operations people
  • Operations people to not upset Accounts people

I am not sure if this is a complete list but it should be enough to explore this topic further.

So what does this indicate, well confusion possibly. Because all aspects of the company are referred to it would be easy to suggest a fully integrated system is the answer. Yet this immediately conflicts with the requirement that Accounts have an easy to use yet effective system. It also conflicts with the requirement that Management are to have the information needed to manage the company. The reason I state these are conflicts is that in my experience (which stretches back longer than I wish to confess) the Inverse Peter Principle can be applied to integrated systems in that;

The sophistication of the Operations modules provided are in inverse proportion to the sophistication of the integrated Accounting modules.

Or if you want me to be blunt, generally an integrated system with a good Operational end has a crappy Accounting end. You do not have to look very far for examples. And the inverse is true, many an international level ERP system has produced rubbish to satisfy Operational requirements. The reasons why are primarily based around focus, software companies set out to develop one thing and focus their R&D budget on this. It is difficult for them to do multiple things in a balanced way.

Best of breed, will that be the answer? In some ways it will be in that Operational people and Accounting people can be happy working away in their islands with systems that are effective yet easy to use. The problem is management at all levels have a tough time as they do not have the integrated information to properly manage their areas of responsibility. Therefore management systems disintegrate into an ever expanding set of spread sheets which cannot be verified and generally cannot be related. At its worst this can lead to a “management by hope” situation which is to be avoided if possible.

The best of breed approach enables us to keep operational and accounting teams happy but creates a problem for management at various levels. This problem is created by source data being entered into various modules and not being available for unified management reporting so the solution is surely to enter all source data into the one module and have that shared with all other modules in a seamless fashion. The solution is therefore to remove the problem. Have all source transactions, creditor’s invoices, stock issues, time sheets, sales transactions etc, entered into the one point and distributed from that point. The logical place for this in a Logistics Company is to have the point of data entry in the Logistics System as that is where detailed Operations Management information is required.

Your logistics system will be processing the sales transactions. If it also processes time sheets, stock issues, creditor invoices and so on this data can be used for detailed Fleet Management, Workshop Management and the management of larger more diverse activities (think of heavy haulage contracts, rural contracting work and so on). The transactions should then be passed automatically from this point of entry to the Payroll and Accounting systems for the processing required in these areas and eventual production of company financial reports. Now management can be happy in that the reporting and visibility they require can be provided whilst keeping their various teams content.

So I suggest the answer to the question posed of “Integrated Systems Versus Best of Breed” is neither. What is needed is a company system platform that is a Cohesive Whole.

Regards,

Trevor

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