When defining a digital strategy for your organization, the number of available options can be overwhelming. The wrong decision can lead to costly inefficiencies, while the right strategy can set your business up for long-term success.
To help you navigate this complex decision, we’ll break down four key digital strategy options:
✅ Single ERP System – A fully integrated enterprise solution
✅ Best-of-Breed Technologies – Specialized software for different business functions
✅ Custom Development – Building a tailored solution from scratch
✅ Software Platforms – A flexible, scalable ecosystem
Each of these strategies has unique advantages and challenges, and many organizations use a hybrid approach. In this guide, we’ll explore the pros, cons, and use cases for each to help you determine the best digital transformation strategy for your business.
What is a Digital Strategy?
A digital strategy defines how a company leverages technology, software, and data to achieve business goals. This can involve ERP systems, specialized software (best-of-breed), custom-built applications, or flexible software platforms.
Before selecting a digital strategy, companies must consider:
✔ Business objectives – Standardization vs. flexibility
✔ IT infrastructure – In-house expertise vs. outsourced solutions
✔ Budget constraints – Upfront cost vs. long-term ROI
✔ Scalability needs – Future expansion and innovation
Option 1: Single ERP System – A Fully Integrated Solution
Enterprise Resource Planning (ERP) software integrates all core business functions into a single, centralized system, streamlining operations across finance, supply chain, HR, and manufacturing.
✔ Pros of a Single ERP System
- Centralized Data & Single Source of Truth – Eliminates data silos across departments.
- Integrated Business Processes – Standardized workflows improve efficiency.
- Vendor Support & Updates – Regular updates enhance security and functionality.
❌ Cons of a Single ERP System
- High Implementation Costs – ERP systems require large upfront investments.
- Operational Disruptions – Switching to a new system can impact daily operations.
- Limited Flexibility – May not support unique business processes.
Who Should Choose a Single ERP System?
- Large enterprises with standardized processes looking for a fully integrated system.
- Organizations prioritizing data accuracy and end-to-end automation.
Option 2: Best-of-Breed Technologies – Specialized Software for Each Function
A Best-of-Breed (BoB) strategy involves selecting the best software for each business function instead of relying on a single ERP system. For example, using Salesforce for CRM, Workday for HR, and NetSuite for financials.
✔ Pros of Best-of-Breed Solutions
- Flexibility & Customization – Choose solutions tailored to specific needs.
- Agility & Faster Implementation – Adopt new technologies incrementally.
- Best-in-Class Functionality – More advanced features compared to generic ERP modules.
❌ Cons of Best-of-Breed Solutions
- Integration Challenges – Connecting multiple systems can be complex.
- Data Silos & Fragmentation – Managing multiple vendors can create inefficiencies.
- Higher Maintenance Costs – Requires ongoing updates and integrations.
Who Should Choose Best-of-Breed?
- Companies needing specialized functionality in different areas.
- Businesses prioritizing agility and flexibility over full integration.
Option 3: Custom Development – Building a Tailored Software Solution
For organizations with highly unique business processes, custom software development provides a fully tailored solution. This option is less common today but remains valuable in specific cases.
✔ Pros of Custom Development
- Perfect Fit – Tailored to exact business requirements.
- Competitive Advantage – Unique technology that competitors can’t replicate.
- No Unnecessary Features – Focus only on what your business needs.
❌ Cons of Custom Development
- Expensive & Time-Consuming – Requires significant investment in development and maintenance.
- Difficult to Maintain – Internal teams must handle updates and security.
- High Dependency on IT Staff – Limited vendor support means in-house management.
Who Should Choose Custom Development?
- Companies with highly specialized operations requiring a unique software solution.
- Businesses seeking a long-term competitive edge through technology innovation.
Option 4: Software Platforms – A Flexible & Scalable Approach
A software platform (e.g., Salesforce, Microsoft Dynamics, Rappit) provides a foundation for multiple applications, allowing for third-party integrations and semi-custom development.
✔ Pros of Software Platforms
- Flexibility – Allows for modular growth and third-party applications.
- Faster Implementation – Pre-built tools reduce development time.
- Supports Existing Tech Stack – Can integrate with legacy systems.
❌ Cons of Software Platforms
- Potential Fragmentation – Requires careful integration planning.
- Vendor Dependency – Limited control over software updates and pricing.
- Customization Requires Expertise – In-house IT teams must manage configurations.
Who Should Choose Software Platforms?
- Organizations wanting a balance between customization and standardization.
- Businesses with legacy systems looking for scalable digital transformation solutions.
FAQ: Choosing the Right Digital Strategy
1. What is the best digital strategy for small businesses?
Small businesses often benefit from a Best-of-Breed approach, choosing cost-effective tools that integrate seamlessly rather than investing in a full-scale ERP.
2. How can I reduce the risks of ERP implementation?
✔ Conduct a business process assessment before implementation.
✔ Focus on change management to ensure user adoption.
✔ Work with independent consultants to avoid vendor bias.
3. Is custom software worth the investment?
If your business has unique operations that off-the-shelf software cannot handle, custom development may provide a competitive advantage—but it comes with high maintenance costs.
4. Should I choose a hybrid digital strategy?
Yes! Many companies combine ERP with best-of-breed solutions or use software platforms to integrate multiple systems.
Final Thoughts: What’s the Best Digital Strategy for Your Business?
Choosing the right digital transformation strategy depends on your:
✔ Business size and industry
✔ Budget and IT resources
✔ Long-term goals for scalability and efficiency
Many organizations combine multiple approaches, leveraging ERP for core operations while integrating best-of-breed solutions or platforms for specialized needs.
🚀 Need expert guidance? Contact Third Stage Consulting to build the right digital strategy for your business.
📥 Download our Digital Transformation Report for independent insights and technology reviews.
