Integrated business systems vs siloed applications - what's better for your service business?

When starting out, it’s easy for a company to settle on stand-alone software solutions that fill a particular business requirement. Referred to as ‘best of breed’ in their category, these applications can certainly be an astute option when addressing a specific commercial function, such as accounting, HR management or CRM. While they may present a suitable short-term solution, what happens to these unrelated systems as the company grows?

The benefits of implementing best-of-breed products are obvious; in the early stages of a developing enterprise it seems logical to treat individual areas of the business as operational silos with specific software requirements. However, single-focus products can create disruption to communication and disconnection between departments, as they centre on a distinct segment of the business, unintentionally discouraging company-wide interaction and collaboration.

As a business grows, managers and operators will often discover that disparate systems create operational inefficiencies and generate unnecessary burden for both customers and staff. The more common issues encountered range from the obvious, such as underutilised human resources due to procedural inefficiencies, through to the hidden, including unwarranted training and subscription costs.

Staff inefficiency

When utilising multiple stand-alone software products, employees are often unnecessarily bogged down with manual administrative duties for extended periods of time. Double data entry is commonplace as information regularly needs to be keyed into multiple systems, such as accounting and CRM. The potential for error is raised with each data entry process, further exacerbating the problem.

Lack of visibility

Disconnected software systems are effectively overlapping databases. When duplicated information is found to be inconsistent, countless hours are wasted trying to tie together unrelated, error-riddled or out-of-date information. Not only does this represent an inefficient use of time, but it increases the likelihood of important business decisions being made based on completely inaccurate information.

Training and learning limitations

Running multiple specialist software programs increases training requirements, which can be problematic in the short and long term. If members of different departments are required to ‘cross-pollinate’ between systems in order to adequately perform in their role, the need for training in the secondary system can be easily overlooked. A lack of training leads to individuals using software platforms without sufficient knowledge, creating potential for disinterest and disengagement. A ‘not-my-department-not-my-problem’ attitude pervades and establishes an environment prime for error.

Hidden ongoing costs

On-premise software packages can be expensive, particularly when they are implemented for single-use. Running out-of-date product versions means that full features and benefits are not realised, but the costs associated with upgrades can often be prohibitive, particularly in the case of multilicence sites. The more software products an enterprise employs, the more expensive, confusing and difficult it becomes to collate data for reporting and security. 

The big question

So, when assessing the needs of your company, are you better off with multiple best-of-breed products or is a combined business software suite the answer?

While there may be no single response to the question, there is no denying that when systems simply work, life becomes a whole lot easier. When customers expect a timely response, having access to accurate real-time data in one centralised system certainly presents advantages and can deliver personalised insights for improved customer satisfaction.

We’ve all been a customer at one time, be it buying a new phone, servicing a car or consulting a medical professional. We’ve all experienced the frustration of different company representatives presenting conflicting information or suggesting that ‘there is no record’ of a conversation, commitment or action.

An integrated platform consolidates data.

The advantage of running a business on an integrated platform, which consolidates and extracts reports and dashboard data from a centralised repository, is that all employees have access to a single source of the truth. The benefits are numerous:

Enterprise-wide process efficiency

The automatic integration of core business processes ensures that manual, duplicative work is, at best, avoided and, at worst, dramatically reduced. This subsequently frees up resources to focus entirely on key activities, rather than error-chasing and double entry.

Avoid manual duplicative work.

Real-time visibility

Access to an accurate, consolidated representation of customer account data should be a top priority for any service business. Precise, available business intelligence provides a solid foundation on which to build a superior service offering. Customers expect it and smart companies deliver.

Training and education

A key benefit of implementing an integrated solution is an overall reduction in training requirements. Specific training programs can encompass instruction on both up and downstream processes, establishing an environment that encourages collaboration between departments.

IT infrastructure and other cost savings

In addition to costs associated with licensing and upgrades, disconnected best-of-breed software products generate further operational expense via a need for supplementary hardware and storage capacity, as well as dedicated IT personnel to manually manage numerous systems.

A move to an integrated solution automatically delivers cost savings via reduced hardware and maintenance costs, licensing fees and IT staff time.

How to know when it’s time

While every company is different, growth and expansion plans are best based on clearly defined business goals. In every business strategy, there comes a time to ask at what point do the costs associated with maintaining disparate software systems and processes outweigh the benefits of keeping them in place? When is the right time to make the move?

A single source of data is a solid foundation for service delivery.

Fragmented data scattered across multiple locations will eventually impinge on a company’s service delivery ability, so it’s important to understand the situation as it is today and to know when to make a change. Some key questions to ask:

1. Is it difficult to find out what is really happening in the business, right now?
2. How much time is spent re-entering and reconciling data across multiple systems?
3. Are sales being lost because customer information is hard, or prohibitively slow, to access?
4. Does the majority of accounting occur outside the core business package, rather than in?
5. Is there more time spent worrying about technology than business results?

If the answer to any of these questions is yes, then it is probably time to consider options and to implement a program for change