Dozens of islands of data. Thousands of spreadsheets. Licensing, maintenance and hardware upkeep costs for countless pieces of software. It's a profit-killing combination that affects countless firms lured into committing to stand-alone systems instead of comprehensive, integrated business suites.
It's true that the stand-alone approach, euphemistically called "best-of-breed" to inspire confidence, initially sounds like a good idea. A small business starts out with just a handful of employees and buys a small package solution for their accounting and finance needs because that's what small businesses have done for years. Then as business picks up and you start to need to manage customers in a systematic way, you add a CRM system. Sure, the two only communicate through batch spreadsheets, but volumes are growing and there's a lot of enthusiasm, so nobody really minds the hassle.
But as the company grows, you realize you need a new marketing automation system, HR management solution, a payroll system, a new customer billing system perhaps, and on and on and on. Soon you get to a point where getting a holistic view of your business becomes critical. However, the mishmash of solutions you now have in place, following the “best-of-breed” mantra is little more than an annoying mess, ill-equipped to provide that holistic view your senior management team is looking for. Each of these systems talks to the other in a different way, so your integration problems are growing exponentially every time a new system comes into play. What started as a simple, quick fix has now created a cascade of problems that can choke a company. For that very reason, we call these tangled messes of stand-alone systems "hairballs."
Aside from the complicated and brittle nature of these hairballs, the enterprise implications are severe. Because every system speaks its own language and has its own data model, answering even simple, fundamental questions such as "How many leads did we generate last quarter?" can be difficult to answer accurately. Capital expenditures are high and remain high because of the need to refresh IT systems to stay current with the demands of each system.
The stand-alone model also commits the company to license, maintain, patch and replace multiple software and hardware platforms for every system. Don't forget, every stand-alone server is actually four different components: the hardware, the server OS, the database and the application itself. When cloud business suites provide complete enterprise functionality with none of the systems upkeep and maintenance required by the "best-of-breed," it's easy to see why so many companies have purged their hairballs and started fresh. Instead of chasing the technological requirements of a dozen stand-alone systems, these companies subscribe once and can immediately focus on streamlining key business processes in the cloud.
-Kishore Bhamidipati, Director, Product Marketing at NetSuite