Best-of-breed vs. single-vendor coworking software – what’s best for you?

The coworking and flex space world is experiencing an exciting evolution as a new, emerging industry. After the perfect storm, most of the coworking operators that survived are turning their full attention to two directions—operational efficiency and growth!

After hiring the right people, technology is one of the most critical elements of operational efficiency and growth. Technology is the support system that makes your teams efficient and drives growth!

Choosing the right technology platform for your coworking space is no easy task. On a very high level, you’ve got two options – best-in-class systems or single-vendor software.

When flex space providers take a best-of-breed (or “best-in-class”) approach to building their technology stack, they select various platforms and tools that serve specific purposes. Put another way, instead of purchasing a product suite from a single vendor that tries to solve all problems, they adopt specialized solutions from different vendors and integrate them.

On the other hand, single-vendor solutions (or “all-in-one” systems) usually cover many different verticals within the same market.

Let’s zoom in on the differences and benefits of these two completely different approaches!

Best-of-breed vs. all-in-one coworking solutions

Best-of-breed systems enable businesses to mix and match specialized technology systems from different vendors. On the other hand, a single-vendor approach is when a business uses a suite of products from the same vendor. For example, there are vendors you can subscribe to their financial system and be forced to use everything else from them – like property management, space management, IT management, access control, payments, accounting, Sales CRM, marketing tools, member experience, etc.

Single-vendor solutions are appealing because, in theory, they can be deployed across an organization simultaneously. The problem with this, however, is that your staff would have to rely on the products in the suite, regardless of whether these are the best solution for the task. Almost always, the individual products within the suite are significantly subpar to the best-of-breed tools on the market. As a result, your employees will either be at a disadvantage by having to use suboptimal products or will go around the requirement and start using other tools off the main suite. Which creates data discrepancy issues as well as IT and security risks.

The single-vendor approach will almost certainly restrict your ability to innovate, as you will have to wait for one vendor to release new versions. By definition, all-in-one systems are slower to innovate because they must cover an endless ground instead of being best in one or a few things.

At first glance, the best-of-breed approach seems complicated. It involves working with multiple vendors and systems, which might be challenging to integrate. Then, there are issues with data discrepancies and reporting. But when done properly and with a solid platform foundation, you can combine all of the best-of-breed technology into one fully integrated system.

Pros and cons of using best-in-class coworking software tools

Before deciding whether to use best-of-breed software or go for an all-in-one solution, you should weigh the pros and cons. While the advantages and disadvantages listed below can apply to operators of any size, we’ve included some specific considerations for large coworking providers, landlords, and small or medium-sized businesses so you can make a more informed choice.

One important caveat is that going for the ‘best-of-breed’ doesn’t mean you don’t need a solid foundation. Usually, you still need to step on a core platform, which means a system that solves problems well and is hyper-integrated with other best-in-class solutions. It also must be easily extensible. For example, at OfficeRnD Flex, we try to solve a few problems extremely well, like coworking space billing, inventory management, bookings, and providing outstanding member experience. Then we try to integrate with as many as possible amazing tools, apps, and systems.

Advantages of best-of-breed systems

• Deeper solutions: By taking a platform approach, you can handpick applications based on your teams’ individual needs and workflows. Then, you can look for specific features and functions that will satisfy your needs. This will ensure you’re using the best tools across the organization, whether a Sales CRM like HubSpot, marketing automation, accounting like Xero or QB, or an access control system.
• Quick innovation: Hyper-focused companies tend to build more modern solutions faster. They solve one or few problems well. Also, these tend to go deeper into the problem and offer more creative solutions. This way, they’re more likely to drive innovation than “Swiss army knife” solutions.
• Price flexibility: Most best-of-breed solutions are also very flexible in pricing. Since there’s usually more competition, they need to be more flexible in pricing. Small coworking operators can start small and expand their technology stack alongside their growing business.
• Faster ROI: Best-in-class platforms are often quicker to deploy and have more intuitive user interfaces and better user experience. Also, they are almost 99 out of 100 times easier to adopt than huge all-in-one products, which means a faster return on investment.
• Greater optionality: Smaller coworking spaces usually have fewer complications and simpler processes that can be solved by many more tools. Going for best-of-breed solutions makes it easier to solve problems without committing to an expensive suite of products with complicated onboarding and training.
• Better productivity: When your team can use the systems they want, they will certainly be more successful in their specific departments and roles!
• More integrations: Best-of-breed solutions are designed to be flexible and will always integrate with other best-of-breed systems. This will allow you to connect multiple systems for more efficient workflows.

Disadvantages of best-of-breed systems

• Complexity: Picking individual solutions means large operators or landlords may have to deal with multiple systems, databases, and vendors. This will surely lead to complications during onboarding, training, reporting and analytics, maintenance, integration, etc.
• Data discrepancies: Organizations that use multiple software solutions may struggle with data integration. For example, various systems can compromise data integrity, manual data entry, and synchronization errors. You may also need to overcomplicate your infrastructure by subscribing to expensive data warehousing solutions to streamline and manage your data centrally.
• Integration challenges: Integrating third-party tools can be difficult and time-consuming, especially for smaller coworking operators lacking in-house technical expertise.
• Unpredictable costs: Best-of-breed solutions usually charge based on usage, which can make the costs very dynamic and hard to budget. The cost of ownership can increase if not managed well. Not to mention, managing multiple licensing agreements and vendor relationships may require a substantial time investment.
• Inconsistent experience: Using multiple systems may result in a subpar experience for your staff, members, and tenants. For example, they may have to use different apps for booking, access control, maintenance, etc. While best-of-breed applications are generally more modern than all-in-one solutions, consistency in design and experience may not be possible with a best-of-breed approach.

The power of the platform integrations

Historically, all-in-one solutions have had a massive penetration in the real estate software market. Surprisingly or not, most asset owners and property management companies (landlords for short) are using or trying to use single-vendor systems that solve all their problems—from finance and accounting through operations and experience to sales and marketing. That’s very difficult in today’s extremely dynamic and fast-changing world!

On the other hand, coworking spaces, as a new and modern segment of the real estate market, grew with the understanding and notion of platforms. Most coworking space operators are likelier to use best-in-class tools than single-vendor solutions. Which is awesome!

However, as landlords enter the coworking and flex space market, we will see a lot more single-vendor systems.

At OfficeRnD, we firmly believe that a solid flex space core platform fully integrated with the best-of-breed tools is the way to optimize efficiency through technology!

That’s why we will invest all our effort in 2023 in building the most robust core platform, working with our partners on a brand new app marketplace, and enhancing our extensibility features.

Cheers to the open and best-in-class platforms out there! 🙂