Each year, Gartner publishes its magic quadrant of ERP vendors. This view of leading ERP software solutions is widely cited by software vendors when they are favorably represented in the quadrant, and it also makes for an appealing PowerPoint graphic. However, software vendors pay Gartner for its research, so the magic quadrant analysis isn’t necessarily 100% independent. While it may be a useful data point in an ERP selection process, the findings are subjective based on dimensions that may or may not indicate a ERP solution’s true position in the market. For these reasons, it can be difficult to draw meaningful conclusions from the quadrant by itself.
On the flip side, our team at Panorama uses a number of quantitative analyses to compare leading ERP vendors. According to our independent 2010 ERP Report published earlier this year, vendors vary fairly significantly in their positions in the marketplace, average implementation costs, benefits realized, and a variety of other metrics that measure true results and vendor viability. One of many key findings from our report is that certain ERP systems have higher rates of being short-listed and selected than others.
In analyzing our data for 1,600 ERP selection and implementation projects across the globe, we found that SAP is the most commonly short-listed ERP system, short-listed by 20% of the companies in our study. SAP is followed by Microsoft Dynamics (15%), Oracle eBusiness Suite (10%), and Epicor (8%). The top 10 ERP vendors are outlined in the table below, ranked by their frequency of being short-listed by organizations in our study:[table “30” not found /]
However, a slightly different pattern emerges when we look at the rate software packages are selected from short-lists. As outlined in the table below, Peoplesoft is selected at a very high rate when the solution makes a short-list – 67% of the time it is on a company’s short-list. Peoplesoft is followed by Oracle’s eBusiness Suite (54%), SAP (54%), Infor (39%), and JD Edwards (38%).[table “31” not found /]
Interpretation of the above data offers a couple of potential hypotheses. First, the fact that SAP is short-listed so often suggests that it’s strong brand name and leading market position could provide ERP buyers with a strong reason to consider the software. Second, the fact that Oracle products are selected at a higher rate suggests that the product may offer a stronger functional fit for companies represented in the study.
Although the frequency of short-list or selection may not be a good indicator of how well a particular software package fits an organization’s unique business requirements, it can be a useful quantitative and objective data point in assessing market trends among ERP vendors.