Enterprise digitalization strategy: how to choose the right one?, part 3.

Enterprise digitisation strategy
Published: 12. 5. 2023
One of the main themes in business today is the effort of companies to adapt to the new digital era and take advantage of its benefits. In this context, it is crucial to choose the right digital transformation strategy. There are two main approaches to digital transformation - all-in-one and best-of-breed - each with its own advantages and disadvantages.

Enterprise digitalization strategy - Two possible approaches:

  • All-in-one
  • Best-of-breed

The all-in-one concept includes all the necessary functions and tools in one application, while the best-of-breed approach offers specialized modules for specific areas. In this article, we will compare both solution concepts and focus on which approach may be the most suitable for your company.

Nowadays, the digitalisation of companies is inevitable for successful business. However, in addition to selecting the right technologies and tools, it is also important to choose the right concept for a company's digitalisation strategy. There are two main approaches to digitalisation:

All-in-one

The all-in-one approach is a strategy for digitizing the enterprise that focuses on providing all the necessary functionalities and services within a single unit. This approach offers simple management and integration of all applications and services, which can be particularly beneficial for companies in terms of reducing the cost of IT infrastructure and staff.

Benefits

  1. Verticals: Simplicity is a key factor that enables organizations to easily and quickly access all necessary functionalities. By using a single system, reduces costs and increases efficiency because employees don't have to spend time learning and using different applications.
  2. Flexibility: Integration all functions into a single system allows organisations to make better use of their data and information and respond more quickly to changes in the environment. The result is increased work efficiency and improved quality of output, which has a positive impact on the overall performance of the organisation.
  3. Unity: A unified system promotes collaboration between different departments and improves coordination of activities within the organization. This allows the organization to better respond to the needs of customers and the market and increases the organization's ability to adapt to changes in the environment.

These benefits are very attractive to companies that are trying to reduce IT costs and increase the efficiency of their employees. All-in-one solutions are often used in smaller companies that need an efficient and simple solution, but they are also popular in areas such as retail, where simplicity and speed become key factors.

On the other hand, the all-in-one approach also has its disadvantages. Companies that decide to take this approach are tied to one vendor and do not have the ability to use specialized applications and services from other providers. In addition, if any of the applications or services prove to be underperforming or unsuitable for the specific needs of the company, it will be necessary to switch to an entirely new solution, which can be costly and time-consuming.

Best-of-breed

The best-of-breed approach is the opposite of an all-in-one solution. Instead of using a single system for all the company's needs, the best-of-breed approach focuses on selecting specialized applications for each individual area. These applications are then integrated and interconnected so that the company can achieve optimal performance in all areas.

Benefits

  1. Specializations: Best-of-breed Solutions are usually designed for a specific business area and are specialized for a specific task. This means they have a high level of functionality and enable organisations to achieve superior results within a specific area. Specially designed applications help to improve an organization's performance.
  2. Flexibility: By using best-of-breed solutions, organizations can choose applications and solutions that best suit their needs. These solutions can be easily customized to the organization's specific requirements, enabling the organization to better respond to changes and leading to improved overall performance.
  3. Innovation: Using best-of-breed solutions allows organizations to leverage the latest technologies and innovations in various business domains. These solutions are typically more advanced in their development and faster in adopting new features and innovations, allowing organizations to stay at the forefront of technological development and innovation.

A best-of-breed enterprise digitalization strategy is particularly suited for medium and large companies that have specific needs and require specialized solutions for different areas of their business. These companies often need sophisticated applications that are specialized for specific areas such as finance, manufacturing, logistics or marketing. A best-of-breed approach allows these companies to use the best applications in each area, improving performance and efficiency. These companies also typically have larger budgets for IT investments and can afford the higher costs of integrating and managing different applications.

However, the drawbacks of the best-of-breed approach often relate to application integration. Because each application is specialized for a specific area, they can be more challenging to integrate into an existing system. This can be a problem for smaller companies with limited resources or for companies trying to achieve results quickly.

Another disadvantage is that selecting the best application in the market can be a challenging and time-consuming process. Companies need to conduct thorough market research and may require expert assistance in selecting applications. This can be expensive and time-consuming.

A key strategy for a successful business

Digitalisation is extremely important for a successful business today and the right choice of solution concept, i.e. digitalisation strategy, can be crucial for achieving business goals.

Final recommendations for selecting an appropriate enterprise digitalisation strategy

Choosing the right enterprise digitalisation strategy can be crucial for a successful business today. The choice between an all-in-one and best-of-breed approach should be based on your company's specific needs and goals, as well as factors such as company size, flexibility and specialization requirements, and budget.

All-in-one solutions are suitable for smaller companies with limited resources that need easy-to-use and affordable solutions to improve processes in various areas of the business. This approach offers benefits such as easy integration, easy management, and a unified interface. On the other hand, all-in-one solutions can be limited in certain areas, which can lead to unsatisfactory results.

The best-of-breed approach is more suitable for larger companies that need specialized solutions for specific areas of the business. This approach allows for the selection of the best applications for each business area, which can lead to greater efficiency and productivity. However, the best-of-breed approach also requires more investment in integrating and managing different applications.

The need for specialisation and flexibility should be considered when selecting an appropriate enterprise digitalisation strategy, as well as the company's overall budget and long-term goals. If a company opts for an all-in-one solution, it needs to choose a reliable supplier with a good reputation. In the case of a best-of-breed approach, applications from reputable vendors should be chosen, along with the amount of investment in integration.

In any case, it is important to conduct a detailed analysis of the company's needs and resources before deciding on a specific approach. Choosing the right digitalization strategy can help companies increase efficiency and competitiveness and should be considered a long-term investment in the future.

More articles from the Digital Transformation series

What is Digital transformation?, part 1.

Benefits of Digital transformation of the enterprise, part 2.

Enterprise digitalization strategy: how to choose the right one?, part 3.

Leveraging the Microsoft "ecosystem" for enterprise digital transformation, Part 4.

Getting Digital Transformation Right: 5 Steps to Success in the Digital Transformation Era, Part 5.

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