According to a new IBRS study, spend on enterprise solutions is set to increase in 2019-2020. Both IT and line of business buyers need to consider how they manage procurement of these new solutions – and how they can make integration easy for their business.
According to the report, there are three degrees of integration an organisation can opt for: the pre-integrated enterprise, the core services and satellite apps enterprise and the business service mesh.
Understanding the kind of company you want to be is important, says Julie Ember, SaaS transition specialist at TechnologyOne, as that will help inform the decision about what business application environment fits your needs.
“Do you want to be in the business of IT, or focus on delivering your core business?” asks Ember.
“This is important because if an organisation does not, or cannot, build a large, highly skilled IT group, then they need to choose an application environment that can be easily supported – something like Software as a Service where the vendor manages the delivery and upkeep of the applications,” she says.
It is also important to determine if the business needs niche, best-of-breed applications to deliver core business processes, or if it is able to align with off-the-shelf enterprise software, she adds.
“An enterprise software strategy will provide a simplified application architecture with minimal integration, which not only makes implementations quicker, but also ensures the latest enhancements are easy to adopt.”
Industry-specific Software as a Service (SaaS) solution
In this case the organisation would invest in a well-established enterprise solution from a single vendor, including core services like finance and supply chain, and industry-specific modules such as student management (also known as the pre-integrated enterprise).
IRBS explains that with a single vendor solution, all modules are integrated. Furthermore, business analytics and dashboards are simplified as information is consistently defined between modules.
Businesses benefit from this as there is little or no custom integration required to adopt industry best practices, and a common user experience is delivered across business units. The enterprise is also centrally administered.
With this approach, however, there is less flexibility for bespoke business processes. This approach is suitable for organisations seeking a stable and low risk platform, those wanting to re-deploy IT resources and those seeking to adopt industry best practices.
Ember says the pre-integrated enterprise approach allows organisations to focus their workforce, time and resources on improving the customer experience, increasing market share, and reducing corporate risk.
She adds: “This strategy will ensure the organisation has the applications it needs without the overhead of a large and expensive IT investment.”
Core services and satellite apps enterprise
The second approach involves selecting a standard ERP system that is not industry specific. Organisations then identify and procure specialised ‘best-of-breed’ solutions to meet niche needs, normally via SaaS. These ‘satellite’ applications are then integrated into the core enterprise solution.
Ember says if very specific niche solutions are required, the core services and satellite apps approach might work for your organisation.
“The downside is that the user experience will be inconsistent with your core enterprise solution, and it also requires a heavier involvement from IT specialists,” she adds.
This approach is good for organisations with relatively undifferentiated core requirements compared to competitors, as well as those with strong IT support and budgets, and existing investments in on-premise enterprise solutions.
Business service mesh
In the final approach, which IRBS calls the business service mesh, companies adopt a microservices / API software architecture and only procure applications that support this.
This approach allows business units complete control to select best-of-breed applications and allows for flexibility in terms of how business functions are assembled.
The downside to this approach is that IT departments will often end up with a fragmented technology stack that they need to cobble together through extensive integration services. Line of business users may lack a ‘single source of truth’ across the organisation, which often results in duplicate or inaccurate data that is difficult to extract or use cross-departmentally.
This application would be most ideal for small startups, organisations that are disruptors or those with strong internal integration capabilities and budgets.
About this author
Athina Mallis is the editor of the Which-50 Digital Intelligence Unit of which TechnologyOne is a corporate member. Members provide their insights and expertise for the benefit of the Which-50 community. Membership fees apply.