Integrated Management Information System Vs Stand Alone Applications
Why Point Solutions Fall Short of Fully Integrated Business Information Management Systems
As businesses grow their needs for an effective information management system change and point solutions are often adopted to meet immediate needs. These functionally specific software applications are designed to address a single problem, or departmental challenge.
Point solutions are often acquired or taken on by businesses as they grow organically and realise that a single area in their business has a problem to solve. Excellent examples of this are online CRM solutions for use by your sales and customer service teams, or Xero for finance.
As organic business growth occurs and your business revenue models adjust to ever changing market conditions your business might go beyond having just CRM and Finance applications and adopt web-based customer ordering portals or an e-commerce platform, then suddenly there is a need for warehousing, inventory and stock management….and so the point solution application IT hairball is born.
As employees in your organisation struggle to meet customer expectations, while playing find the spreadsheet games around your warehouse, you can see that a single unified solution can provide many advantages.
The Best of Breed Software Application Myth
For a business that’s trying to grow, the idea that you can simply acquire a new functionally specific application to solve whatever the issue is right now, is a bit of a myth.
Firstly, single point solutions, or functionally specific solutions come with a high subscription cost. This is fine when maybe two people use a solution, but once that solution is tied into an integration platform, your license model changes. There is also often a limited number of data transactions that can occur within an integration (or middleware) platform – so if your customer base or order volumes grow, so too do your application license cost.
There are also a lot of hidden costs that aren’t considered, for example, a lot of things need to be fixed up between systems, missing data completed manually and vague things that break along the way. In some businesses it has become a full-time job for somebody to manage all these little things.
Then there are the quirks that unintentionally hamper your business growth, such as the brilliant inventory management system that works well with Xero, but doesn’t value foreign exchange the same way, meaning that you end up with differences in the value of inventory in the inventory system versus the same inventory as it is valued in the financial system.
Business information management systems, on the other hand, are run from a single database and don’t come with hidden surprises, while they grow with your business. Also, the vendor manages the “IT” role, so updates, new functionality and development needs, security and so on, are all handled by the vendor.
Learn How Integrated Technology Can Transform Your Business
Consolidate & Conquer: The Business Model of Tomorrow
Learn how integrated technology can be used to transform your business. Consolidate and conquer asks the question of; is your business model right to take on serious growth?
We discuss integration and automation, compliance and security, as well as the impact of systems on people.
How Integrated Information Management Systems Effectively Support Growth
At its core an ERP (or Enterprise Resource Planning solution) is a suite of functionally rich applications that are tightly integrated and united by their single unified data source. This is what enables them to power the automation of business processes, provide insights and internal controls.
An integrated information management system collects inputs from every connected department or business function, while recording every transaction.
It delivers a single, clear, consistent – live – view of your business, from any perspective. The other advantage is that everybody is aligned, working towards the same goal, while business decisions are based on the same data.
Integrated Information Management Systems Support People Through Business Change
Implementing change within a business is always a challenge. People who are resistant to change often believe that they will lose autonomy over their function or role, or that they might be replaced by a line of code. Neither of these things is the reality with the implementation of an integrated business management information system, or ERP.
What an ERP does, is apply rigour and well-defined processes to departmental functions and employee roles, while securing sensitive data. It ensures that only those that need to, can access or manage information, such as supplier bank records, or payroll information.
With well defined processes, reliable data and security around your data, you can then start to look into automation of key functions, so the AP/AR person who might be struggling to manage their workload, is suddenly able to handle significantly more work as they go from manually managing every transaction, to only investigating and intervening anomalies, while accuracy and security is also improved.
This major shift in the way your operations are handled can usually only be achieved with an ERP and is the sort of thing that enables your business to go from supplying local cafes to winning a contract with one of the major supermarkets or major retailers. You can’t suddenly scale up your operations by expecting that you’re suddenly going to be able to hire extra heads tomorrow, you need to be able to grow your capacity to do business mostly with the team you’ve already got.
Future Fit and Ready For Change
Point Solutions can be a great enabler for your business to adapt to rapid industry change, as we saw with the continual lockdowns, many businesses made the leap into true e-commerce for the first time.
However, we also witnessed what happened to the businesses that couldn’t adapt fast enough. The businesses who weren’t able to go from bricks and mortar with point solutions for each function, couldn’t rapidly incorporate their new e-commerce website, with online POS, live inventory management and expand their distribution systems.
Business information management systems start with robust financial systems and then you switch on the additional business functions, or functionally specific applications, as they’re needed. So even if you’re a bricks and mortar business, with the right information management system, processes, and automation in place, you are already on your toes at the starting block ready with everything in place to pivot your business as your industry is rocked overnight.