Open ERP architectures to give rise to best-of-breed vendors

As SAP and other big ERP vendors continue to open up their architectures, analysts say, more data centers will use best-of-breed tools for specialized functions. But before enterprises head down the integration path, they should make sure they have a good road map.

It took careful planning and a well-defined mission statement, but Bakersfield, Calif.-based Aera Energy LLC uses SAP as its ERP vendor while integrating smaller best-of-breed vendors to provide complex information about the Aera oil fields.

Choosing this approach to software management means that companies must have very strong integration strategies, said Brian Zrimsek, a senior analyst with Stamford, Conn.-based Gartner Inc.

Zrimsek said companies that merge major ERP systems and best-of-breed offerings need to have an ERP product that is integration friendly and which provides application programming interface (API) and Web services capabilities. A company's middleware environment must also be robust, to ensure smooth integration, he said.

"You must have a strategy for connecting multiple applications together," Zrimsek said. "The balance that has to be struck is the value of the best of breed versus the cost to integrate."

How a company implements a particular software application is more important than the type of software that is implemented, Zrimsek said.

As the ERP market matures and consolidates, users need to establish confidence in the life span of all the vendors they choose, he said. Some companies have been persuaded to invest in three or more vendors as a way of minimizing dependence on a single vendor in a market where mergers and acquisitions have made recent headlines.

"It's an emerging thought process," he said. "They feel that if they invest heavily in a single vendor, then they are at more risk of losing it all."

As SAP and other large ERP vendors open up their architectures, more companies will be motivated to choose a best-of-breed approach, many analysts agree.

"I think that we're headed towards a world in which best of breed has a resurgence impact on the market," said Joshua Greenbaum, principal consultant at Daly City, Calif.-based Enterprise Applications Consulting.

"The more these technology infrastructures open up, the more users will open up to third-party applications."

Greenbaum said customer can benefit from this trend in more ways than one.

Users can pursue very specialized applications that meet very specialized needs and get exactly the functionality they want, he said.

However, customers must have complete control of their information architecture before they can consider integrating best-of-breed products, said Larry P. English, president of the Brentwood, Tenn.-based consultancy Information Impact International Inc.

"We have standards for our employees and standards for our financial procedures. So if we don't have standards for our information resources, then we will have a state of chaos," he said. "To take a best-of-breed approach in software, an organization must have a strong information architecture or enterprise data model."

English stressed that implementing best-of-breed tools with those from a large ERP vendor should be done by a team led by an individual who has the authority to make changes happen quickly. Companies should also have a clear business strategy and closely scrutinize business processes to develop objectives.

"You have to develop a detailed model, implementing the shared common data structures, and that becomes the mechanism for integrating the SAP or other vendor's data that needs to be exchanged with other packages," he said.

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