The criteria for selecting a new ERP solution have changed substantially with the proliferation of SaaS (software as a service) offerings, business process outsourcing, and vendor consolidation. In our legacy ERP evaluations, technical criteria weighed almost as heavily as functional capabilities. Furthermore, differences in functional capabilities were significant among the selection candidates. Now, the widely commercially available software solutions have copied each other’s functionality and the differences are slim unless the company is in a niche industry segment.
People often confuse cloud computing with SaaS. Cloud just means that the software is resident on a server outside the organization. Internal IT support is typically required for cloud computing to help with backups, software updates, and database management. True SaaS means that the IT infrastructure is provided as a part of the vendor software solution, eliminating the need for internal application support. For example, Acumatica’s ERP solution is a 100% SaaS solution while Oracle’s eBusiness is offered as a cloud solution. Oracle offers IT support at an additional cost, and true SaaS solution providers make the support invisible at no additional cost.
Inevitably, nearly every company utilizes some form of business process outsourcing at some point. It’s more cost-effective to outsource certain functions. It’s important to know which software vendors have partners equipped to provide outsourcing through their platform. Most business process outsourcing companies use specific software solutions, and if the solution is different from yours, integration issues will occur. The good news is, if you choose a well-known vendor (even to support a niche), there will be a business process outsourcing partner available to you.
Vendor consolidation is ongoing and is not slowing down. The larger players (Oracle, SAP, IBM, and Microsoft) are using the acquisition pipeline to compete on offering a single solution for every need. At the next level down, vendors such as Sage, Epicor, and Infor continue the acquisition binges.
The question about the vendor roadmap is not easy. First, what are the chances the software solution you are exploring will get acquired? If your company is evaluating a solution owned by a private equity firm, what is the private equity firm’s strategy? What will happen if the software solution is sold to IBM or Oracle? For example, Oracle’s acquisition of PeopleSoft and JD Edwards left quite a few companies wondering about the future of their ERP solution. If your company is looking at an ERP solution that has already been acquired, what are the vendor’s long-term plans for the software? For example, Infor has allowed many of their acquired software solutions to remain intact.
Functionality is, of course, an important part of every selection. But given the convergence of functionality across vendors, we suggest focusing on truly critical requirements that support what differentiates your business from the competition. Looking at three-way matching or dual entry GL transactions is a waste of time. In addition to software demonstrations focused on these unique requirements, vendor reference calls with peer companies’ finance and operations managers are the best way to learn how the software will support your business and optimize business processes and reporting.
To learn more about how Trenegy can help you select the right package in record time, email bill@trenegy.com.
