In this enterprise model there is a single software supplier or suite that is used throughout the organization for their operations. Examples of monopolistic architectures are ERP solutions, be they mainframe or more modern ‘componentized’ ERP solutions.
The key component here is simplicity, and the sales technique is that you can have your ‘IT in a box’. This is a very powerful sales message.
This model works well in one key situation and that is small businesses where commercial advantage is not related to IT. It would be hard to imagine any medium or large business working solely off a single ERP solution without mixing in other suppliers to give competitive advantage in at least some areas of it’s operation.
Historically some medium sized companies have started from a single ERP solution but will move sections off it to gain competitive advantage reasonably quickly.
In this kind of architecture Enterprise Architecture skills are not required as the solution is very simple and enterprise integration patterns are not required. Depending on the complexity of the solution and level of customizations a solution architect may be an advantage.
Note that outsourcing all of your IT infrastructure to a single supplier (integration partner) can often lead to a situation whereby you have a virtual monopolistic architecture. This is often seen with BPM or ESB integration programs.
|One supplier to manage||This makes supplier management and billing simple. Relationship management simple.|
|Software management is easy||As there is only one software package things like backups, restores, licensing, etc. are all very simple to manage. If you really want to make it simple you can outsource this and buy a SAAS package and eliminate a large proportion of IT costs.|
|Low cost of acquisition||As there is no bespoke development, only configuration and light testing, this is a very cost effective solution.|
|Change is simple and cost effective||Only as long as this change is within the design boundaries of the system that has been purchased. Outside of this you may find that change is slow and can be costly.|
|Shared Business Processes||Ensures complete process integration which is tightly integrated, and synergies.|
|Software is continually improved||If a competitor has requested a change to the core software to support an updated requirement you may benefit from that through an update.|
|Quick Win||Often can be installed and configured quickly in green field sites.|
|Easy to find up to the minute corporate data.||As there is only one system there is a only one data store so finding corporate information is reasonably simple e.g. how many items of this particular product do we have in stock.
Note this point can be negated with some ‘Monopolisic’ style products which have grown through acquisition, that have been internally integrated as there may be many different data repositories in play.
|Customization is possible but limited to the design boundaries of the software.||If you stray outside this you may find not only costs increase but also that your competitors will be given the changes you have asked for, losing the competitive advantage.|
|Reliance on one supplier||This can adversely affect costs, specifically you can get into a situation where annual x% increases becomes untenable. We have also seen situations whereby if the supplier gets wind of your desire to change to an alternate they can charge you more during any transition period.|
|Reliance on specific technology||This is really a long term issue, and can be very costly, examples include software that relied upon COBOL which is currently extremely expensive to maintain.|
|Speed of change – self||If you have to customize the solution you may have issues with supportability and upgrades. This can result in having to use an older version of the application and therefore missing out on new upgrade features.|
|Speed of change – supplier||If you rely on the supplier to make changes your request is likely to be put on a feature backlog. This makes changes slow.|
|Scalability||As the business grows many small and medium ERP solutions tend to struggle to scale linearly.|
|Single point of failure.||As there is one system controlling everything from suppliers to deliveries if this system fails the enterprise will often stop or have to rely on manual record keeping. Business continuity can be an issue.|
|Jack of all trades, master of none||Whist offering a broad array of services, individual modules within the system will rarely compare well with best of breed systems. But may be ‘good enough’|
|All users of this software start at the same point.||This will level the playing field to a large extent, making gaining competitive advantage a challenge.|