One stop shopping versus best of breed

ThoughtWorthSharing Business 

There are roughly two kinds of Advanced Planning & Scheduling (APS) vendors that can be considered when looking for an APS solution: vendors offering APS as an add-on or part of ERP (Enterprise Resource Planning) and “pure” APS vendors like Delmia Quintiq. The choice for a vendor is typically not only based on a functional match with requirements – when the organization already uses the ERP offered by the vendor, it might be logical to also evaluate their APS offering. Companies aim to reduce complexity and integration issues when applying the “one-stop shopping” strategy. However, in many cases, the concern for complexity and interfacing has been exaggerated by the one-stop vendor. Technically, it is not difficult to integrate an APS with an ERP. Instead, integration issues between APS and ERP are functionally challenging. Design choices have to be made here, irrespective whether the APS is supplied by the ERP supplier or by a third party. Functional integration issues are difficult to standardize, and the benefit of having the same supplier for ERP and APS is therefore limited to the technical aspect of developing interfaces.

(let's make the whole IT landscape blue)

When implementing information system landscapes, the law of the conservation of complexity applies – one-stop shopping just puts that complexity within the realm of one supplier’s solution. The complexity persists and needs to be dealt with by smart design decisions, within the solution that was chosen.

One might argue that standard functionality might make design decisions more easy. However, functional integration issues are never completely standard, even when the APS module is delivered by the ERP vendor. Complexity might even rise because certain design decisions for the APS might need changes made to the ERP model. Furthermore, “pure” APS systems are likely to have more integration options with the ERP than the ERP add-on itself. When an interface has to be built between an ERP and an APS, one has to match information from bundled functionality A (the transactional order management system) to bundled functionality B (the planning system). A workcenter in the ERP might not have the same meaning in the APS – actually, it rarely has. Routes or recipes in the ERP have been constructed to minimize maintenance or from a costing perspective – not from a planning perspective.

Such problems are potentially nasty and require a functional solution, independent from the question whether the APS has been acquired by a best of breed or one-stop shopping strategy. The advantage of licensing an APS module from your ERP vendor lies in possibly lower license fees and only having to deal with one party. It should also be noted that one-stop shopping strategies are obviously propagated by ERP suppliers themselves, as from a commercial viewpoint, nothing is more preferable than creating a monopoly at a specific client. Furthermore, the strategy seems to be promoted by large consultancy firms as well, and we observe that at the same time, these firms prosper thanks to the consultancy they sell in relation to the mentioned ERP solutions.

Source: Designing, selecting, implementing and using APS systems. (2017) Wiers, V. C. S. & de Kok, A. G. Springer. 204 p.