Earlier this month, we launched our first annual ranking of the Top 10 ERP Systems in the market. The study – based on hundreds of companies implementing new ERP software over the last four years – evaluates leading solutions based on a number of criteria.
Implementation cost, implementation duration, benefits realized, functionality score from our clients and market share were all used to determine how the various vendors stack up to one another. You can see the detailed scores and rankings by downloading the report here, but in the meantime, here are a few takeaways from the annual rankings:
1. Those at the top of the list are not the ones you might expect. Some might expect to see the big behemoths of ERP systems (SAP HANA, Oracle Cloud, Microsoft Dynamics 365, etc.) dominating the top of the list. However, these usual suspects only managed to consume one of the top four slots at #3 in the rankings. Instead, IFS, Infor and Epicor, which are lesser-known but very viable products, dominated the top of the rankings. Another interesting fact: the vendor that finished atop the functionality score ranking was IFS – not one of the more dominant vendors in terms of market share.
2. Each ERP software solution has its own unique set of strengths, weaknesses and tradeoffs. It is interesting to see that no one system dominated in all categories of the rankings. In other words, some of those that scored well in implementation cost and duration did not score well in benefits realized or objective functionality scores. For example, Epicor finished #1 overall, but they scored relatively poorly in average implementation cost and middle-of-the-pack in implementation duration. There are certainly strengths and bright spots for each of the vendors, but they all entail tradeoffs.
3. The rankings expose interesting tradeoffs between the risk and reward of certain systems. Implementation cost and duration are often times the metrics that CIOs and executives are most concerned about. However, that only tells part of the story. A more complete picture also considers what you may be getting for those investments in time and money. For example, SAP HANA is often perceived as costing more and being more risky than its peers (a perception that our data supports), but those data points don’t consider the fact that SAP also ranks #1 in terms of payback period. In other words, SAP customers get quicker returns on their investments than any other product in the market place.
4. Implementation duration is one of the surprises. Average implementation durations seem higher for many vendors than we would have expected. This could be that more companies are taking their time to get their implementations right. It could also mean that companies are phasing their implementation strategies more so than in years past. Or, could it be that our sample size included larger organizations that are naturally going to take longer to implement than their smaller and mid-size counterparts? Regardless of the reason, this is a metric that we want to keep a close eye on in coming years to see which direction the trend goes.
5. At the end of the day, your unique needs and requirements matter much more than the top rankings. We as an organization love objectively analyzing data like this to get a general sense of how vendors compare to one another. However, there are limitations to these analyses. Just because Microsoft Dynamics 365 ranked lower than SAP HANA and Oracle doesn’t mean that every (or even most) companies are going to conclude the same in their ERP selection processes. Instead, each company needs to carefully define and prioritize its unique business needs and requirements and find the software that best fits them. The top 10 rankings are meant to be one of many data points to be considered in an evaluation process.
These are just a few findings from the Top 10 ERP System Rankings, but none may be as important as point #5. Each company has different needs and will find different tradeoffs between systems. Most organizations have plenty of viable options to choose from, which is good news for companies about to embark on an ERP software selection process.