Every year, we conduct an independent analysis of the Tier 1 ERP vendors. The report, called Clash of the Titans, is based on data we collect from organizations implementing an SAP, Oracle, Microsoft or Infor product. This data typically includes project cost and duration metrics as well as metrics on implementation approach.
As we release our latest Clash of the Titans analysis, our readers are probably wondering which selection advice is most applicable to these “titans” of the ERP market, or as we call them, Tier 1 ERP vendors.
Clash of the Titans 2020
This report analyzes some of the notable differences between SAP, Oracle, Microsoft and Infor.
While Tier 1 ERP vendors provide systems suited for a variety of company sizes, their flagship offerings typically are designed for companies with more than $750 million in annual revenue. Most companies of this size have complex processes or complexity around consolidation and entity management.
Because of their wide reach across industries and brand recognition, these vendors have a large customer base. Examples of Tier 1 ERP vendors include SAP, Oracle, Microsoft and Infor.
Findings from 2020 Clash of the Titans
SAP Compared to Other Tier 1 Vendors
- The most customers using a best-of-breed strategy
- The most customers focusing on MES functionality
Oracle Compared to Other Tier 1 Vendors
- The most customers focusing on CRM functionality
- The most expensive ERP projects
Microsoft Compared to Other Tier 1 Vendors
- The most customers focusing on eCommerce functionality
- Customers using a high percentage of external resources
- The least expensive ERP projects and shortest project durations
- The most customers pursuing business transformation
Infor Compared to Other Tier 1 Vendors
- The most customers using a single-ERP strategy
- The fewest customers pursuing business transformation
- The most customers focusing on EAM functionality
- Customers using a high percentage of internal resources
- The longest project durations
5 Tips for Tier 1 ERP Selection
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 strategize, implement, manage change and support the system after go-live. Some key criteria to look for in an implementation partner are vision, dedication and expertise.
What is Your Implementation Partner’s Vision for Your Organization?
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 services 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 an integration with carrier services directly to your ERP system? Are you utilizing dock management to best schedule your logistics partners for pick up and drop off times?
Follow-up questions like these can mean the ERP vendor has a greater 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 for your warehouse but also talks directly to your logistics services to know when they are coming and ensures your docks are available for when they arrive.
How Dedicated is Your Implementation Partner?
Dedication is a criterion that’s a little harder to determine. You want an implementation partner that will dedicate time and resources to you when you encounter an issue, despite how many other customers they are supporting.
While Tier 1 ERP vendors have thousands of customers, they still 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?
How Much Expertise Does Your Implementation Partner Have?
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 that are likely normalized throughout industries, it’s good to ask if they have any specific expertise related to your business.
An example of this is when a vendor teams up with an ISV (independent software vendor) that seamlessly integrates into their ERP system to provide out-of-box, industry-specific processes.
How Trustworthy is Your Implementation Partner?
Partnerships rely on trust and communication, so it’s important to reflect on your RFP process 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 gone all in, imagine the challenge after you’ve already paid the bill.
2. Evaluate the Vendor’s Implementation Approach and Post Go-live Support
While some companies prefer to assemble a team of all internal resources, most companies rely on a certain amount of external resources due to these resources’ expertise.
Independent ERP consultants can provide expert resources and so can your vendor. This combined expertise can lead to successful project. However, this requires that both consultant and vendor have a practiced and proven approach.
When evaluating your vendor’s implementation approach – often influenced by your consultant’s implementation approach – it’s important to ensure it will work for your organizational goals and company culture.
What Support Options Does Your ERP Vendor Offer?
Post go-live support is another important consideration. While it may seem early to think about post go-live support before you’ve selected an ERP system, support services can make or break your ERP selection.
An ERP vendor should offer several options (including a dedicated one) when it comes to support plans. With Tier 1 ERP vendors, a first level of support almost always is included with software licenses. Therefore, a more apples-to-apples comparison is to look at the first level of paid support. How many hours come with it? What are the typical SLAs (service level agreements) that come with opening issues?
3. Consider Customization and Integration
ERP vendors with a wide range of capabilities tend to have industry-standard business processes built into their software. This is how they were able to gain so many customers and build their brand.
For example, in 2020 Clash of the Titans, we talk about how Microsoft’s channel partners are expanding their client base with more pre-configured, niche functionality. This likely is a contributing factor to the shorter project duration among Microsoft customers.
What if a Business Requirement Isn’t Met Out of the Box?
This is when it becomes important to ask about your ERP vendor’s customization route.
Today, ERP vendors closely monitor the customizations and integrations their customers build because their SaaS customers get regular, automatic updates that require compatibility. To prevent compatibility issues during an automatic update, it’s crucial for the updates to not overwrite any code developed for specific customers.
This is why you should ask each vendor what their customization and integration policies are and what this means for you when it’s time to upgrade.
4. Look at the Vendor’s Other Offerings
A unique advantage that Tier 1 ERP vendors have over smaller vendors is that Tier 1 players tend to have other applications in their portfolio that complement their main ERP system.
For instance, SAP, Oracle and Microsoft all offer internally developed cloud services to host the cloud version of their ERP solutions. This makes deploying and managing your environment streamlined as 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 help analyze the massive amount of data coming from your ERP software.
What Other Systems Will You Replace in the Future?
When selecting an ERP system from a Tier 1 vendor, consider what other business applications you may replace in the future. Do the ERP vendors under consideration offer those business applications? Would it be beneficial to replace legacy systems as part of your ERP project plan? What is my digital strategy, and can this vendor be my partner for the long haul? These types of questions may help you narrow down your list of potential ERP vendors.
5. Consider Case Studies and References
Since Tier 1 ERP vendors tend to have thousands of live customers, they should have plenty of case studies and references for you to consider. Ask the vendor to provide a reference for one of their customers of a similar size and industry. Better yet, ask if there are any case studies on your competitors.
Leveraging these references and case studies, you can determine the kind of implementation partner the vendor is, what their implementation and support process is like and what other applications within their portfolio may add value to your ERP implementation.
Implementing a Tier 1 ERP System is Challenging
Since Tier 1 software solutions have a long implementation time and often require 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 Tier 1 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.
For more generalized ERP selection advice for any software tier, check out our ERP Selection Guide.