Business software selection: ERP or best-of-breed?

At some point in the brewery life cycle, the question about purchasing industry specific software arises. This need for software comes about after the brewery realizes that excel spreadsheets to manage production and inventory are not scaleable. Having a defined process with the use of industry software usually results in organization during periods of growth. When the brewery reaches the stage where it chooses to migrate off excel spreadsheets, they have two roads they can take: One option is a Enterprise Resource Planning (ERP) solution; and the other option is a best-of-breed solution. While both are suitable solutions, it is important to understand the history and best practices of each to make an informed purchase. The financial and human resources required to properly roll out industry software vary greatly between the two solutions.

ERP systems came on the scene around the late 1970s as a successor to Manufacturing Requirement Planning (MRP). MRP systems were designed to handle what the name implies; bill of material processing, inventory controls, scheduling, re-order point management, etc. It was designed to focus entirely around the manufacturing process, leaving many of the other business functions to fend for themselves. When ERP systems were born, they retained all the functions of a MRP and added the missing business processes. “Enterprise” is meant to be a single piece of software which handles all the business functions.

The term “best-of-breed” is relatively new, and it was created with the mass adoption of software as a service (SaaS). SaaS subscription based software which is accessed from the “cloud.” A huge sticking point for these cloud based solutions are that they communicate with each other. The communication between two totally independent pieces of software is reliant on open application programming interface (API). Developers of SaaS products quickly realized they can harness the power of many SaaS solutions if they left their APIs open for collaboration. This allows a developer to be highly focused on one product. As a result best-of-breed was born.