Standalone tools or all-in-one ERP: what tool sprawl really costs

One application for invoices, another for time tracking, plus a ticket system, online banking and a spreadsheet for everything that fits nowhere else. This is what the software landscape looks like in many mid-sized companies. Nobody planned it that way. It grew over the years, and each tool was a sensible decision when it was bought. The expensive part is what happens in between.

How tool sprawl comes about

It usually starts with a specific problem. Accounting needs invoicing software, sales later wants a CRM, support asks for a shared inbox with ticket numbers. Each department picks the tool that solves its problem best, and at first that is the right call. A few years on, five or more systems sit side by side, each with its own customer list, its own users and its own logic. What is missing is the connection between them.

Where the costs really arise

Licence fees appear on an invoice and are quickly added up. The larger items never show up in any cost centre.

Duplicate data entry

A new customer is created in the CRM, again in the invoicing tool and a third time in the ticket system. When the address changes, someone has to remember all three places. In practice that rarely happens completely, and sooner or later an invoice goes to the old address.

Manual handoffs

Between two systems there is almost always a person who retypes, exports or copies. Hours from time tracking are transferred to a spreadsheet for invoicing. Incoming payments are read off the bank statement and marked as paid by hand. Every one of these steps takes time and invites errors. It hurts most when hours worked get lost on their way to the invoice. Revenue is then missing without anyone noticing.

No shared view

How much revenue does a customer generate, how many open tickets do they have, and has the last invoice been paid? If answering that means opening three applications, people eventually stop asking. The same applies at management level: key figures are compiled once a month in Excel from several exports and are out of date by the time they are finished.

Interfaces and administration

If two tools can be connected, someone has to set up the interface, monitor it and get it running again after updates. On top of that, every system brings its own logins, its own permissions, usually its own data processing agreement and its own contact when something breaks. When someone leaves the company, five accounts need to be disabled instead of one.

A quick calculation for your own business

Blanket percentages are of little use here, because every company is different. Taking stock yourself is more revealing. A few questions are enough:

• Which systems are in use, and what do they cost per month in total?
• In how many places is the same customer, item or employee maintained?
• Which data is regularly transferred by hand from one system to another, and how many hours a week does that take?
• How long does it take for an hour worked to appear on an invoice?
• Who knows how the interfaces work, and who covers for that person?

Multiply the hours from the third question by an internal hourly rate and project the result over a year. That figure is usually the strongest argument, whichever way it points.

When standalone tools are still the right choice

An integrated system is not an end in itself. For highly specialised tasks, such as engineering design software or an industry-specific application, a dedicated tool is often superior, and no ERP will replace it. Very small businesses with two or three applications and few points of contact between them also manage perfectly well.

As a rule of thumb, the more often the same data passes through several hands and systems, the more integration pays off. Core commercial processes such as quotes, orders, invoices, payments, time and HR are closely linked, which makes them the first candidates.

What changes with a single system

Our business software dCM is a compact ERP for small and medium-sized businesses, built for exactly these core processes. All modules work on one shared data basis. A few everyday examples:

• Project time becomes an invoice: Recorded hours can be billed to the customer directly as an outgoing invoice, with no detour via a spreadsheet.
• Bank transactions find their document: Account movements are retrieved via FinTS, the German online banking standard, and matched to the right documents automatically.
• Emails become cases: Incoming messages arrive in the system as tickets and are assigned to the customer by sender address.
• The customer at a glance: Orders, documents, tickets and calls appear in one shared customer view.
• Travel expenses without retyping: Approved expense reports are transferred to accounting as incoming invoices.
• Key figures from one source: Revenue, open items and liquidity come together in the dream Vision BI cockpit. Our article on liquidity planning explains how the rolling forecast works.

dCM is modular: you activate only the building blocks you need. For your tax advisor there is an export for DATEV, the accounting software used by most German tax firms. Hosting, updates and support are included, and the software runs in German data centres.

Switching does not have to happen on a single day

The most common objection to consolidation is the fear of a hard cutover. It is a fair concern, because nobody wants to change everything at once in the middle of a financial year. A step-by-step approach makes more sense: start with the area where friction is greatest and add further modules later.

For companies currently working with c-entron or the order processing software from Hamburger Software, two ERP systems common in Germany, dCM includes connectors that synchronise customers, documents and payment status. Both systems can run in parallel until the time is right to switch. A free entry-level plan is available for trying it out.

Conclusion

Whether five tools or one is better is not decided by the number of applications but by the work that happens between them. Once you write down where data is maintained twice and transferred by hand, you quickly see whether your tool sprawl is merely untidy or actually costs money. If it is the latter, an integrated system is worth a look.

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