All-in-one vs. Best-in-class Solutions: What’s Best for Your Growing Brand?
Commerce is a fast-moving, unforgiving industry — and retail brands live and die by their inventory. So it makes sense that when it comes to choosing an inventory management solution, you want to be extra careful in choosing the right one for their business.
There are lots of options out there ranging from entry-level IMSs to enterprise solutions like ERPs all with their own set of pros and cons, but an area of question that repeatedly presents itself is this: what’s best for a growing brand? An all-in-one solution or a best-in-class integrated approach?
Before we dive in, let’s understand the main difference between the two.
All-in-one vs. Best-in-class
An all-in-one solution, much like how it sounds, is a business solution that offers capabilities and functionality for all major areas of your business in one, central system.
Whether you’re talking about an ERP solution or an all-in-one inventory management solution, these systems tend to offer a wide breadth of out-of-the-box proprietary solutions for accounting, purchasing, wholesale, POS, shipping and fulfillment, warehouse management, PLM, and more all in one system.
However, proprietary solutions also mean that these systems offer little to no supported integrations with other industry tools with the exception of major ecommerce platforms like Shopify and marketplaces like Amazon.
So when it comes to your accounting solution or POS, warehouse management, or any other area of your retail business, you’re at the mercy of the built-in proprietary solutions, the (often very slow) development schedule of the system, or left paying for additional customizations to fit your particular business’s needs.
Best-in-class solutions, on the other hand, take a different approach to inventory and brand operations management.
Unlike single-vendor systems, the best-in-class (or ‘best-of-breed’) inventory management solutions encourages brands to create their own unique multi-technology stack through offering strong, supported integrations with the industry’s leading tools and solutions in commerce.
Be it QBO for accounting, ShipStation for fulfillment, NuOrder for wholesale, or others, the best-in-class approach lends its success to brands by offering a focused and sophisticated solution to inventory management, while integrating with other ‘best-in-class’ tools that have an equal dedication and focus to other critical areas of the business.
So, which approach is best for growing businesses?
A modern brand’s needs
In order to survive in commerce, modern brands in particular need scalability, flexibility, and most importantly agility in their operations. Brands rise and fall based on their performance, and the most successful brands today approach their operations with an experimental mindset to adapt, grow, and succeed.
All-in-one solutions may sound enticing for a brief moment with the convenience of a one-stop-shop solution and it’s promise of lowered technology overhead costs, improved efficiency, and streamlined organizational workflows.
But, be wary that all-in-one solutions come with a huge trade-off when it comes to flexibility and agility that nimble brands like you rely on.
In this next section, we’ll explore how all-in-one ERP or inventory management solutions stack up against best-in-class inventory management solutions across features, scalability and agility, and price.
Features and functionality
The best way to think about the two solutions is that all-in-one solutions tend to be a jack of all trades and a master of none, while best-in-class inventory management solutions are specialized solutions in handling the operational setup for modern brands.
Where all-in-one solutions offer a wide breadth of capabilities across the business (and often across several industries), they also lack focus, depth, or sophistication in any one area. This results in lackluster or lagging solutions — particularly in inventory management — that either require workarounds or costly customizations to fit the actual workflow you’re trying to support.
The one exception to this are the accounting and finance modules found in ERP systems. Since ERPs are traditionally an accounting and finance solution, the financial reporting capabilities tend to be much more robust and conducive to the accounting teams needs. More on this later.
Best-in-class solutions, on the other hand, take a much more focused approach, allowing them to offer much more in-depth inventory management capabilities fit for the modern brand.
Beyond centralizing inventory across multiple channels, they offer much more complex workflow support like pre-order / backorder management, virtual bundle creation, multi-location order routing, and purchase order management that often go far beyond what all-in-one solutions can offer.
Scalability and agility
Scalability isn’t only measured in a system’s ability to handle higher order volumes or SKU numbers. When we talk about scalability here, what we’re really talking about is the ability for your inventory management system to support your growth and continue to change and adapt with your business.
ERPs by design are built to handle enormous order volumes and channel / SKU numbers. However their antiquated design and all-in-one solution approach to managing your entire business make it clunky to use and slow to adapt to changing needs — so much so that it’s actually recommended for even large legacy brands to decouple their ecommerce business from ERPs to stay nimble.
These single-solution vendors may be able to handle your business at 2x, 5x, and even 50x, but requires your operational setup to remain largely unchanged, or throwing in additional resources and lots of patience in overhauling the entire system.
A specific example would be integrating a new 3PL. This process typically takes months to a year with an ERP and with a hefty cost, too. However, with a leading best-in-class solution like Stitch, high-growth brands like THINX are able to rapidly test and implement a new 3PL in a matter of weeks.
Single-solution vendors will almost always highlight the lowered technology overhead cost due to only needing one system versus multiple solutions in a tech stack. Be very careful if this is a big factor in your decision making process.
All-in-one solutions, particularly ERPs, are infamous for hidden costs from additional customization costs that causes the total cost of ownership to skyrocket far beyond what you initially budgeted for.
In 2017, a surprising 56% of ERP implementations came in over budget by 25%, and 18% came in over budget by more than 25%.
If that’s not bad enough, 79% of ERP implementation projects missed their projected deadlines, inevitably having a negative ripple effect on the efficiency of the team and sale opportunities.
If you’re still considering ERP solutions, make sure to inquire about the total cost of ownership, as well as doing your own calculations to make sure you have a full understanding of cost.
By now, it should be evident that clunky and rigid all-in-one inventory management solutions are not conducive to modern, high-growth brands who need flexibility, scalability, and agility in their operations to compete in commerce today.
But that does leave the question: what kind of businesses were ERPs and all-in-one solutions meant for?
ERPs, or Enterprise Resource Planners, were originally created as a tool for accounting and finance teams with additional business modules like inventory management, HR, and IT created around it to support their workflows. As such, the functionality in the surrounding modules are designed mainly to support clean accounting rather than as an operational tool for other teams.
As we mentioned briefly earlier, this is why the accounting and financial capabilities in ERPs tend to be more robust and compliant to the needs of the finance teams, but at a cost to the efficiency and needs of the operations team.
For legacy brands that are publicly traded, having access to robust and clean accounting across their many initiatives and operations is likely a worthwhile trade in order to comply with much more rigorous accounting standards. Even for these companies, latest industry advice is to decouple their ecommerce business from their ERP in order to remain nimble.
So, if you’re a modern brand and you’re still considering an all-in-one solution, just remember that it requires the following:
- Replacing your current tech stack entirely with an entire system
- A large financial, operational, and strategic commitment to this new system
- Conviction that what you adopt today will work for your operational set-up a year, two, or five years from now
- An understanding that any customization through APIs and integrations need to be built and managed internally with little to no support
- High-degree of confidence that the total cost of ownership is still going to provide you with a positive ROI when counting in implementation costs, customizations, and maintenance costs
And, remember to ask yourself this: what are your current pain-points that you are trying to solve? Are you sure this isn’t a problem that only an ERP can solve?
If you’re unsure, we’re always here to help. Book a time to speak to one of our product specialists today to explore options for how to best solve your operational challenges and grow your business.