How to Select a Tier 1 ERP System: 5 Tailored Tips

Every year, we conduct an independent analysis of the Tier 1 ERP vendors. The analysis, known as Clash of the Titans, is based on data we collect from organizations that have implemented SAP, Oracle, Microsoft, or Infor products.

As we release our 2023 Clash of the Titans report, we thought we should provide some selection advice that is applicable to the vendors in the report. In other words, this blog will discuss how to select a Tier 1 ERP system (if you’ve decided this is the right type of system for you).

Note: When we refer to Tier 1 ERP vendors, we’re talking about vendors whose flagship offerings are designed for companies with more than $750 million in annual revenue.

Findings from 2023 Clash of the Titans

SAP Compared to Other Tier 1 Vendors

• The most customers focusing on Enterprise Asset Management functionality
• Customers were most likely to achieve full benefits realization for the types of benefits they quantified
• The least expensive projects
• The shortest duration projects​

Oracle Compared to Other Tier 1 Vendors

• The most customers focusing on Reporting and Analytics functionality
• The least customers focusing on Supply Chain Management functionality​

Microsoft Compared to Other Tier 1 Vendors

• The most customers focusing on Human Capital Management functionality
• The most customers that considered their project to be a digital business transformation

Infor Compared to Other Tier 1 Vendors

• The least customers that considered their project to be a digital business transformation
• The most expensive projects
• The longest duration projects
• The most customers focusing on Inventory Management functionality​

How to Select a Tier 1 ERP System

If one of these vendors is on your long list or short list, we have some specific ERP selection advice for you:

1. Consider Whether the Vendor Would be a Good Implementation Partner

Your ERP consultant will not be your only implementation partner. Your ERP vendor will also be involved in helping you understand your ERP requirements, develop a project plan, prepare for organizational change, and implement your new technology.

Some key criteria to look for in an implementation partner are vision, dedication, expertise, and trustworthiness.

Vision

Let’s look at an example to understand what we mean by vision. Let’s say you have a business requirement to print shipping labels from various logistics providers before shipments leave your warehouse.

A vendor solely focused on winning the bid might tell you their software can meet this requirement, but a vendor with vision will ask related follow-up questions: Have you considered integrating carrier services with your ERP system? Are you utilizing dock management to help schedule your logistics partners for pick-up and drop-off times?

Follow-up questions like these can mean the ERP vendor has a vision for what you could achieve with your ERP software. In this example, they are envisioning an integrated ERP system that not only prints shipping labels but directly interfaces with your logistics services to determine timelines and ensure dock availability.

Dedication

You want an implementation partner that will dedicate time and resources to your company when it encounters an issue, despite how many other customers they are supporting.

While Tier 1 ERP vendors have thousands of customers, they still typically offer reliable, long-term support. You can gauge their dedication by thinking back to the RFP process – did you have a dedicated account manager or one whose attention seemed divided?

Expertise

The most straightforward consideration in a partnership with an ERP vendor is expertise. Even though Tier 1 ERP vendors have a wide breadth of capabilities across industries, it’s still smart to ask how much expertise they have with your specific sub-vertical.

Trustworthiness

Partnerships rely on trust and communication, so it’s important to reflect on the RFP process you experienced with each vendor. Were they transparent in their pricing? Did they communicate clearly and follow up in a timely manner?

If you have difficulties with trust and communication before you’ve even signed the contract, imagine the challenges you’ll experience during implementation.

2. Evaluate the Vendor’s Implementation Approach and Post Go-live Support

When it comes to implementation, vendors often provide external resources to augment your internal project team. This expertise – combined with the expertise of an ERP consulting firm – can lead to a successful ERP implementation.

However, this requires that all parties follow a practiced and proven approach. When evaluating your vendor’s implementation approach, it’s important to ensure it’s realistic in terms of cost and timeline.

Post go-live support is another important consideration. While it may seem too early to think about post go-live support before you’ve selected an ERP system, it’s better to know about your vendor’s support plan sooner rather than later.

An ERP vendor should offer several support options, including a dedicated one. With Tier 1 ERP vendors, a first level of paid support almost always is included with software licenses. Therefore, to conduct an apples-to-apples comparison, we recommend looking at this first level of support. How many hours are included? What are the typical service level agreements that come with opening tickets?

3. Focus on Your Differentiating Business Requirements

Tier 1 ERP vendors have a variety of industry-standard business processes built into many of their solutions. However, every business is unique, so might find that one of your differentiating business requirements can’t be met out of the box.

You don’t want to standardize these particular processes because they provide competitive advantage, so what now? This is when it becomes important to ask about customization and integration options.

If you’re implementing SaaS ERP software, it’s important not to go overboard in this area because your software will receive regular, automatic updates that require compatibility.

To prevent compatibility issues, you should ask each vendor what their customization and integration procedures are and how this could impact upgrades.

4. Consider the Vendor’s Other Offerings​

A unique advantage that Tier 1 ERP vendors have over smaller vendors is that they tend to have other applications in their portfolio that complement their main ERP system.

For example, many of these vendors have internally-developed cloud services that can streamline the deployment and management of your IT environment because you only have one vendor to deal with.

Other examples include the Microsoft Office suite of products that can send emails to and from your ERP system and Infor’s artificial intelligence solution that can analyze massive amounts of data within your ERP software.

When selecting an ERP system from a Tier 1 vendor, consider which of your existing business applications you may replace in the future. Does the vendor offer those business applications? What is your long-term digital strategy, and can this vendor be your partner for the long haul?

5. Consider Case Studies and References

Since Tier 1 ERP vendors tend to have thousands of customers, they should have plenty of case studies and references for you to consider.

We recommend asking vendors to provide references for customers comparable to your company size and industry. Better yet, ask if there are any case studies on your competitors.

Leveraging these references and case studies, you can determine if a vendor is a good partner, what their implementation process is like, and what other applications may add value to your ERP software implementation.

Implementing a Tier 1 ERP System is Challenging

Since Tier 1 software solutions can have a long implementation duration and often require significant business process changes, it’s smart to select an ERP vendor that will give your company the attention it needs.

It’s also important to find an ERP consultant that can help your company select and implement your new system. Independent ERP consultants, like Panorama, can work with your vendor to develop a project plan that includes success factors like business process reengineering and organizational change management.

Request a free consultation below to speak with our ERP experts, and don’t forget to download 2023 Clash of the Titans.