Vendor Landscape: Enterprise ERP

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1 It is no longer just about SAP or Oracle; large enterprises now have a variety of options., Inc. Is a global leader in providing IT research and advice. Info-Tech s products and services combine actionable insight and relevant advice with ready-to-use tools and templates that cover the full spectrum of IT concerns Inc. 1

2 Introduction Enterprise resource planning (ERP) projects at this level are expensive: costs include licenses, implementation, and annual maintenance. This Research Is Designed For: Enterprises seeking a solution for managing all aspects of financial management, resource planning, and process automation. Their ERP use case may include: Multi-national enterprises looking to replace their current aging on-premise ERP system. This Research Will Help You: Understand what s new in the ERP market. Evaluate ERP vendors and products for your enterprise needs. Determine which products are most appropriate for particular use cases and scenarios. Enterprises with a diverse set of products looking to streamline financial operations across their subsidiaries. High-growth companies that need better process automation and audit control for financial operations. 2

3 Executive summary Info-Tech evaluated seven products in the Enterprise ERP market, including the following notable performers: Champions: SAP. Comprehensive resource management and analysis software; unmatched by any single product. Infor. The complete redesign of the user interface presents the best out-of-the-box experience for end users. Sage. X3 s mix of end-user tools and its robust sales channel compensates for any perceived gaps in the advanced features. Trend Setter Award: Infor. The addition of a user-configurable interface provides the basis for a twenty-first-century business planning and management system. Info-Tech Insight 1. Process alignment is key: Large to very large enterprises are defined by complex multi-site, cross-department business processes. The ERP market has finally acknowledged the need for better and more agile ERP resident tools for managing processes. 2. ERP is a dirty word: No one wants to purchase an ERP application anymore. The vendors are moving away from this language to focus on solutions that meet tech-savvy end users as organizations gear up for millennials in management positions. 3. SAP still owns the market: ECC (formerly R/3) is still the most comprehensive product on the market. No large enterprise can afford to disqualify SAP from the early analysis. 3

4 Market overview How it got here ERP started in the sixties as mainframe tools to automate repetitive manufacturing schedules. SAP capitalized on innovations in client-server computing to become the leader in the ERP market. Rival offerings by JD Edwards and Oracle brought refinement and extended ERP as an underlying platform available to all mid-sized and large enterprises. International expansion and merger-and-acquisition waves in several verticals in the eighties and nineties caused a change in focus from single monolithic systems to a set of location-based ERP systems. Spectacular cost overruns for SAP and Oracle implementations have provided opportunities for additional vendors to move into the space. Where it s going Virtualization and cloud-based ERP will come to the enterprise ERP space. Look for traditional on-premise vendors to build cloud expansion modules to retain customers. Analytics in the form of dashboards and automated reports will become the key method of interaction for ERP users. Expect vendors to provide better document management. Top vendor SAP has multiple ECM partnerships. Look for data warehousing and analytics to be combined as seen in SAP HANA, Workday, and Infor. Do not expect further disruption of this market in the next two or three years. The typical upgrade takes a year to implement, reducing the pressure on vendors to innovate. As the market evolves, capabilities that were once cutting edge become default and new functionality becomes differentiating. Multi-national financial management has become a Table Stakes capability and should no longer be used to differentiate solutions. Instead focus on usability and license flexibility to get the best fit for your requirements. 4

5 ERP vendor selection / knock-out criteria: market share, mind share, and platform coverage For this Vendor Landscape, Info-Tech focused on those vendors that offer broad capabilities across multiple platforms and that have a strong market presence and/or reputational presence among large and very large enterprises. Profiled vendors had to have a history of innovation and success in established companies and institutions. Profiled vendors also had to have a high level of mind-share within the Info-Tech community as demonstrated by analyst calls with members. Included in this Vendor Landscape: SAP. The traditional front runner in the enterprise ERP space. The ERP Central Component (ECC) replaces R/3 as the gem of the SAP product line. Oracle. The only vendor with two products in this landscape. Oracle E-Business Suite and PeopleSoft are widely used, long-standing ERP systems. Infor. The highly differentiated product portfolio on micro-verticals indicates Infor s focus on line-of-business solutions rather than monolithic ERP systems. Workday. The first of the next generation of ERP vendors focused on native cloud applications for HR and financial management along with embedded reporting and analytics. Sage. The long-standing alternative to Oracle and SAP in the enterprise space. Microsoft. The Dynamics line of ERP and CRM have long provided the potential for integrated sales and resource management that easily integrates with its productivity suite. 5

6 ERP criteria & weighting factors Product Evaluation Criteria Criteria Weighting Features The solution provides basic and advanced feature/functionality. Features 30% Usability The end-user and administrative interfaces are intuitive and offer streamlined workflow. 50% Usability Architecture Multiple deployment options and extensive integration capabilities are available. Architecture 20% Product 50% Vendor Evaluation Criteria Viability Vendor is profitable, knowledgeable, and will be around for the long term. 50% Strategy Vendor is committed to the space and has a future product and portfolio roadmap. Viability Vendor Strategy Reach Vendor offers global coverage and is able to sell and provide post-sales support. 25% 30% Channel Vendor channel strategy is appropriate and the channels themselves are strong. Channel 15% 30% Reach 6

7 The Info-Tech Enterprise ERP Vendor Landscape The zones of the Landscape Champions receive high scores for most evaluation criteria and offer excellent value. They have a strong market presence and are usually the trend setters for the industry. The Info-Tech Enterprise ERP Vendor Landscape 1234 Market Pillars are established players with very strong vendor credentials, but with more average product scores. Innovators have demonstrated innovative product strengths that act as their competitive advantage in appealing to niche segments of the market. Emerging Players are comparatively newer vendors who are starting to gain a foothold in the marketplace. They balance product and vendor attributes, though score lower relative to market Champions. Workday Microsoft Oracle PeopleSoft Infor SAP Sage Oracle EBS 7

8 Balance individual strengths to find the best fit for your enterprise Product Vendor Overall Features Usability Arch. Overall Viability Strategy Reach Channel Infor Microsoft Sage SAP Oracle EBS Oracle PeopleSoft Workday Legend =Exemplary =Good =Adequate =Inadequate =Poor 8

9 Table Stakes represent the minimum standard; without these, a product doesn t even get reviewed The Table Stakes Feature Full financial management Hire-to-retire Business process support What it is: The ability to manage basic transactions (GL, A/P) Basic human resource management The ability to build processes into the system What does this mean? The products assessed in this Vendor Landscape TM meet, at the very least, the requirements outlined as Table Stakes. Many of the vendors go above and beyond the outlined Table Stakes, some even do so in multiple categories. This section aims to highlight the products capabilities in excess of the criteria listed here. Reporting The ability to build and export reports for both internal stakeholders and external regulators If Table Stakes are all you need from your ERP solution, the only true differentiator for the organization is usability and vendor strategy. Otherwise, dig deeper to find the best price to value for your needs. 9

10 Advanced Features are the capabilities that allow for granular market differentiation Scoring Methodology Info-Tech scored each vendor s features offering as a summation of its individual scores across the listed advanced features. Vendors were given one point for each feature the product inherently provided. Some categories were scored on a more granular scale with vendors receiving half points. Advanced Features Feature Analytics and reporting Mobile applications What we looked for: In-application statistics and data visualization for reporting to internal and external stakeholders Mobile-specific application that is functional on a tablet or HTML5/responsive-design browser Note on Advanced Features: The advanced features in the ERP space are similar across mid-market and enterprise ERP. Advanced features are less important than usability on the product side and strategy and channel on the vendor side in the Enterprise ERP space. Multi-site ERP functionality Integration with end-user tools Exception management Rationalization of the financial statements and budgeting needs across multiple locations Connectors to support productivity in a regulated manner within the corporate environment The mechanisms for managing exceptions to normal processes 10

11 Advanced Features are the capabilities that allow for granular market differentiation Scoring Methodology Info-Tech scored each vendor s features offering as a summation of its individual scores across the listed advanced features. Vendors were given one point for each feature the product inherently provided. Some categories were scored on a more granular scale with vendors receiving half points. Advanced Features Feature Industryspecific modules What we looked for: The number of industries out of these ten large categories: pharmaceuticals, insurance, healthcare, manufacturing, retail, distribution, communication, real estate, government, higher education specific modules across all ERP uses Horizontal support BPM support Document management Application dev. platform Support for typical ERP-centric activities such as accounts payable, HR, supplier management, customer orders (SKUs, POS, etc.), partner payments Support for more expansive business processes that require additional application or information sources than just the ERP system Documents related to an ERP process are stored, accessed, and integrated into processes Platform for customizing branding and businesscritical unique processes 11

12 Focus on the advanced features that cure a key business pain Evaluated Features Analytics and reporting Mobile applications Multi-site ERP functionality Integration with enduser tools Exception mgmt Industryspecific modules Horizontal support BPM support Doc mgmt App dev platform Infor Microsoft Sage SAP Oracle EBS Oracle PeopleSoft Workday Legend =Feature fully present =Feature partially present/pending =Feature absent 12

13 All vendors can manage a multi-site enterprise; focus on the organization s primary pain to differentiate The combination of the advanced features and architecture are critical to each of these pain points. 1 Multi-site 2 3 ERP Primary pain: Financial consolidation Why Scenarios? In reviewing the products included in each Vendor Landscape TM, certain use cases come to the forefront. Whether those use cases are defined by applicability in certain locations, relevance for certain industries, or as strengths in delivering a specific capability, Info- Tech recognizes those use cases as Scenarios, and calls attention to them where they exist. Primary pain: Centralized process control Primary pain: Site-specific complexity 13

14 Merger and acquisition presents long-term challenges for large enterprises Large enterprises often consolidate on specific department-level needs or in low margin industries. 1 2 Managing 3 subsidiaries Primary pain: multi-national payroll and benefit Why Scenarios? In reviewing the products included in each Vendor Landscape TM, certain use cases come to the forefront. Whether those use cases are defined by applicability in certain locations, relevance for certain industries, or as strengths in delivering a specific capability, Info- Tech recognizes those use cases as Scenarios, and calls attention to them where they exist. Primary pain: controlling margin on volatile resources Primary pain: matching human resources to billing 14

15 Large enterprises can gain efficiency through automation of key processes Focus on processes where time to completion and cost can be optimized to ensure the value of your ERP system Process automation Primary pain: multi-location manufacturing Why Scenarios? In reviewing the products included in each Vendor Landscape TM, certain use cases come to the forefront. Whether those use cases are defined by applicability in certain locations, relevance for certain industries, or as strengths in delivering a specific capability, Info- Tech recognizes those use cases as Scenarios, and calls attention to them where they exist. Primary pain: HR and payroll consolidation Primary pain: tracking and confirming distribution 15

16 The use of visual cues and large icons provides an adaptable platform for any enterprise Champion Product: Employees: Headquarters: Website: Founded: Presence: Sage ERP X3 13,600 Newcastle, UK Sage.com 1981 LSE: SGE Overview Sage has 6.3 million customers globally, with Sage ERP X3 deployed to over 4,000 customers in 60 countries. Target placement: multi-site enterprises. Strengths Strong adaptability allows enterprises to define workflows and information streams at a granular level. Web-native architecture allows for collaboration with partners, suppliers, and customers. Modern architecture facilitates multi-site, multi-country deployments with detailed configuration requirements. Three cost considerations: 1. Evaluate your SQL or Oracle DB licenses as part of the cost projections. 2. HR is not included out of the box, but is available as an additional fee add-on (for most geographies). 3. Do not expect out-of-the-box integration with on-premise systems such as ECM. Challenges Sage ERP X3 s client and consulting base is still primarily European. However, North American clients report no support or service concerns. Sage ERP X3 lacks information lifecycle management, leading clientele to potentially expensive, customized add-ons. 16

17 Sage ERP X3 provides a consistent experience across mobile and desktop Vendor Landscape Product Vendor Overall Features Usability Arch. Overall Viability Strategy Reach Channel Testing Capabilities Usability Better than average Not a defining feature Not a strength X? Public Private Vendor Administration Ease of administration Role-based controls Process management Ease of update End user Social tools (process follow, integrated messaging) User-configurable view Intuitive workflow building GUI Features Analytics and reporting Mobile applications Multi-site ERP functionality Integration with end-user tools Exception mgmt Industry-specific modules Horizontal support BPM support Doc mgmt App dev platform Info-Tech Recommends: All but the very largest enterprises will find value and sufficient features to justify moving to Sage ERP X3. 17