Multifunctionality:
Blessing or Curse?
Danny Rappaport
Director of Consulting, PMC
Technology, like a tool, is usually designed for a specific job. Trying to make a piece of equipment designed for one specific task to do something different or, worse still, many different jobs, is often a thankless and expensive endeavour. Yet, many modern businesses still attempt just that.
The Swiss Army Knife analogy
Known for its versatility, the Swiss Army knife is a classic multi-functional tool. It’s a knife, a screwdriver, a can opener, and more. But anyone who has used a Swiss Army knife knows that while it can perform various tasks, it doesn’t excel at any specific one.
My earliest encounter with a "Swiss Army knife" solution came when my first child was born in the mid-nineties. As the initial grandchild, my daughter was showered with the “best” gifts, including a combination pram, stroller, car seat. It didn’t make tea, but it tried to do everything else—and unfortunately, it did none of them particularly well. In addition, this multi-functional monster took up most of our small house and was extremely expensive!
The argument for the Swiss Army Knife is that you never know what tools you’ll need when, but in retail, it's all about doing the basics right with the right tools for the job. Each task is becoming more specialised, and the differentiator between retailers is now not just what they do but how efficiently they do it.
A tool that does everything can, of course, be expensive, but if the business case is there perhaps it’s worth it? When I relate this to modern-day commerce, it’s easy to see how the sales pitch of “don’t you want the best for your baby?” works just as well if you replace “baby” with “business.”
ERP: Comprehensive Solution or Obsolete Relic?
In the realm of commerce technology, we often encounter claims from system vendors that their solutions meet all our business needs—the one-stop shop. The concept of ERP (Enterprise Resource Planning) typically arises when a business needs consistent operations, comprehensive functionality, and mature processes. The debate between having “one version of the truth” versus adopting “best of breed” systems to support growth is ongoing.
ERP systems, with their extensive modules covering everything from planning and buying to reporting and financials, offer wide-ranging capabilities. In the past, when software was a luxury and many businesses relied on manual systems, the all-encompassing ERP was highly appealing. However, now that business software is critical, it’s essential for each department to have the right specialised solution. While integrating these specialised systems may seem complex, today's market offers a plethora of specialised options across all major business functions. This raises the question: is ERP becoming obsolete? Or does it still hold value in its comprehensive approach, despite its Swiss Army knife-like nature?
Quality vs Convenience
To be the best, it’s said you need to put in your 10,000 hours. The same applies to the tools and software we use. The quality of our service depends on the expertise behind our tools. While we all know that focusing on specific areas leads to better results, the convenience of a one-stop shop often leads us to overlook its shortcomings, hoping that the vendor's roadmap will eventually address our needs. However, as businesses grow, moving beyond paper, spreadsheets, and cobbled-together internal solutions is crucial. Businesses need systems that are tailored to their needs and can keep up with their growth.
Best of Breed
The alternative to an all-encompassing system is Best of Breed, or more accurately, Best Fit. While some components may be standard, for example Accounts Payable or General Ledger, others, like Warehouse Management or Buying and Merchandising, are specific to the industry. So, it’s about finding the best fit for your business. Businesses (like babies) are all different and you wouldn't put your baby in the wrong baby-grow, would you?
Integration
Many companies consider ERP safer due to its control and consistency. Key reference data (product, price, supplier, location) and access to common data (sales, orders) are standardised. However, microservices-based composable commerce using APIs and an Enterprise Service Bus (ESB) allows multiple systems to work together seamlessly. This open, composable, and modular systems architecture is the key to IT harmony.
The Hybrid Approach
What if we could combine the advantages of central core functions with the specialisation of best of breed? Some businesses thrive with just an ERP, while others need specialist systems. Most would choose both if possible. The hybrid approach, with properly architected and designed integration, is finally achievable, and maybe now for the first time, the Swiss Army knife is not just possible but actually a good idea.
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