Raymond Repic, Chief Techmical Architect for Coca-Cola Enterprises (CCE), understands the move to best-of-breed on a number of levels. Repic notes that disparate application integration used to translate into expensive propositions but options now exist to help ease this pain. The other driver for best-of-breed is increased competition.

“The overall numbers may be moving towards best-of-breed as more and more enterprises depend on more and more enabling technologies to differentiate in their markets or support internal growth initiatives," Repic says. For companies that don't require bleeding edge technologies to support required business operations, though, the trusted partner model may be preferred. In this model an enterprise selects a small handful of technology companies to become business partners for IT solution enablement. When they have a new business need that comes up, they first talk with those partners on how to provide for the need. If that partner can provide for "mandatory requirements", then they would look to proceed with their partner, assuming financials are all in alignment, according to Repic. "I don't envision CCE moving away from its ERP decisions any time soon.”

Timeliness next to godliness
There is also the issue of timeliness that also haunts ERP: companies don't want to wait a year or 18 months for SAP or Oracle to catch up with what the best-of-breed applications vendors can offer now -- especially with integration getting easier thanks to SOAs and even SaaS, Checketts notes.

And if buying into a best of breed isn't difficult, big ERP's argument that a company is better off with a single code base from a single vendor gets harder to swallow.

In the domain of spend management, Rick Collison, director of solutions at Ariba, says that timeliness was a key issue for his company, which has to make sure that its customers can deliver savings every quarter, every year. "The technology has to keep up with that kind of cadence," Collison says.

And SaaS vendors like Salesforce.com are doing a lot more today than just offering software revisions four times a year. For example, Salesforce is inviting customer feedback in a collaborative, social networking environment called AppSpace. Companies can communicate directly with business partners, customers, and with Salesforce.com, which is using AppSpace to take suggestions from customers and incorporating those suggestions in the very next release -- a capability ERP vendors are unlikely to have any time soon.

ERP ROI…RIP
All of this is changing the way line-of-business executives look at the ROI of traditional ERP solutions and the best-of-breed competitors. In spend management and procurement, for example, Checketts says ROI can be as high as 600 percent. "If you have a CPO [Chief Procurement Officer] who can save 600 percent with a best-of-breed application then if it costs $2.5 million to run the operation it’s a good return," Checketts says.

The problem ERP vendors are facing today is one of relevancy in a rapidly changing environment where flexibility and speed have almost as much value as stability and depth. On top of that, point solutions have a better integration story with SOAs and XML interfaces. Although it is also true that many companies don't have that infrastructure yet, the consensus is getting broader. 

No longer the must-have partners for enterprises, ERP vendors cannot afford even the appearance of being any less relevant than they were in the '90s, not with SaaS vendors and best-of-breed vendors chipping away at what Agassi calls ERP's original strengths: transparency, compliance, and global scale.

What is driving the enterprise today, Agassi admits, is a new set of values: consolidation, networked value chains, and increased speed of process change. Just about everyone can agree on those goals. The only question is how you get there.