Aerospace and defense companies have one of the most stringent quality and regulatory requirements. It is especially true for companies that might be tier 1 or tier 2 in the A&D ecosystem. In fact, at times, companies don’t want to serve A&D ecosystems. Why? Due to the overhead involved in serving these industries.
Also, the margin requirements may not be as tight for A&D as for automotive. But the quality requirements may eat up your margins if you don’t streamline your admin and reporting needs. Additionally, aerospace parts are more highly engineered than most industries. And the large programs require vendor collaboration and time sensitivity from each vendor. They require this as a slippage from one vendor could impact the whole supply chain.
Finally, the A&D companies may have a much more involved pre-sales process. The process may involve several stakeholders and proofs-of-concept during the R&D phase. This factor drives the need for built-in engineering and pre-sales workflows to support the contract needs. So these factors make the A&D industry extremely unique with its need for an ERP system. And vanilla ERP systems not designed for A&D may require you to invest significantly in custom development or integration.
So which ERP systems are designed for the A&D industry? How about we start with the list of the top 10 aerospace and defense ERP systems? To finalize this list, we have analyzed hundreds of ERP systems and their capabilities through publicly available information. As well as our teams’ experience in evaluating these ERP systems for our customers. The purpose of this article is not to recommend these ERP systems but to help you with some options that you may want to vet further.
- Definition of an aerospace and defense company. These are the companies in the aerospace and defense ecosystem, including OEMs, manufacturers, and distributors. The list considers companies of all sizes in this ecosystem.
- Overall market share/# of customers. The higher the market share among aerospace and defense companies, the higher it ranks on our list.
- Ownership/funding. The more committed the management to the product roadmap for the A&D companies, the higher it ranks on our list.
- Quality of development: legacy vs. legacy dressed as modern vs. modern UX/cloud-native. The more cloud-native capabilities, the higher it ranks on our list.
- Community/Ecosystem. The larger the community with a heavy presence from aerospace and defense companies, the higher it ranks on our list.
- Depth of native functionality for specific industries. The deeper the publisher-owned out-of-the-box functionality, the higher it ranks on our list.
- Quality of publicly available product documentation. The poorer the product documentation, the lower it ranks on our list.
- A&D company market share and documented commitment of the publisher through financial statements. The higher the focus on aerospace and defense companies, the higher the ERP system ranks on our list.
- Ability to natively support diversified business models. The more diverse the product, the higher it ranks on our list.
- Acquisition strategy aligned with Aerospace and Defense companies. The more aligned the acquisitions are with the aerospace and defense companies, the higher it ranks on our list.
- User Reviews. The deeper the reviews from aerospace and defense companies, the higher the score for a specific product.
- Must be an ERP product. It can’t be an edge product such as QuickBooks, Freshbooks, Xero, Zendesk, HubSpot, or Salesforce. It also can’t be an add-on owned by ISVs or VARs that sits on top of other accounting platforms.
Rootstock targets MRP-centric and engineered-to-order SMB companies. With strong mobile-native capabilities offered as part of the suite, It is built on top of the core Salesforce platform. Its strength for A&D companies includes its native integration with other Salesforce offerings such as Salesforce CRM and field service solutions. Enabling their pre-sales process with contract and compliance management, the Salesforce CRM offers much deeper capabilities for A&D companies. As well as being tightly integrated with their production and engineering systems. These companies typically find other bigger solutions, such as SAP S/4 HANA and Microsoft Dynamics 365 F&O overwhelming.
The weaknesses of Rootstock include its reliance on a third-party quality module. The quality solution it typically integrates with, ComplianceQuest, is one of the strongest and natively integrates with the Salesforce platforms. But it adds additional risks to your projects, such as contract, vendor, and product lifecycle risks. The other weakness of Rootstock would be its weakness in finance, as CFOs of larger companies may not find it the most relatable product. Finally, it might not have the depth of A&D-specific functionality and will require expensive configurations, custom development, and add-ons. Recent updates? There have not been any updates with the product that directly impacts their capabilities for A&D industries and as a result, it maintains the rank of #10 on our list of the top aerospace and defense ERP systems.
IQMS is a mid-size ERP system with its roots in the plastics industry targeted at SMB manufacturers. While IQMS has deep mixed-mode manufacturing capabilities, it struggles with companies that may have deeper sub-assemblies than 5-10 levels. So IQMS may be most suitable for A&D companies that might be supplying or manufacturing plastic or medical supplies components to tier 1 and tier 2 companies. However, it may not be the best fit for OEMs or tier 1 companies due to the complexity of their operations and diverse business models.
Its strength includes in-built quality processes that might be deeply integrated with engineering flows due to its native integration with the SolidWorks product portfolio. This integration may feel natural to engineer-to-order organizations that are heavy in collaboration with their customers and suppliers during the engineering and estimation process and might be heavy SolidWorks users. Its strength also includes native support for ITAR certifications and other A&D-specific feature sets. These feature sets might require customizations and expensive configurations with other products.
Its weaknesses include its legacy interface, which is not as modernized as other legacy peers such as IFS or Infor. Its weaknesses also include slower development and lack of momentum in its community, and that could be the driving factor why they are behind in its cloud-native capabilities. Finally, the weaknesses would also include their depth of capabilities for larger A&D companies that might be building complex aerospace such as landing gears or a fighter jet. Recent updates? There have not been any updates in 2022 with the product that directly impacts their capabilities for A&D industries and as a result, it maintains the rank of #9 on our list of the top aerospace and defense ERP systems.
8. Infor CloudSuite Industrial
Infor CloudSuite Industrial is a hybrid manufacturing product designed to serve SMB companies. Its design is heavily influenced by large OEMs. And it has deep capabilities for multi-level BOM manipulations, which makes it ideal for tier 1 and OEMs with complex, highly-engineered products.
Its strengths include the quality module that is natively integrated with the core product and manufacturing processes, which makes it an ideal solution for quality-driven organizations. Its strength also includes its product model with warranties designed to support products with different lifecycles with their unique serial numbers or combinations of multiple numbers for enhanced traceability. Finally, its strength includes its ability to integrate with other Infor products such as PLM through InforOS.
Its weaknesses include the lack of A&D-specific last-mile functionality, which may require complex development and configurations. Primarily limited to the financial aspect of the projects, they don’t have support for operational WBS processes such as non-financial workflow embedded with financial milestones and activities. The BOMs also don’t have dates, which makes them limiting for A&D companies that might be producing complex products with longer lead times for each operation.
Recent updates? There have not been any updates in 2022 with the product that directly impacts their capabilities for A&D industries with the only exception being the Lighthouse acquisition for MES capabilities and, as a result, it maintains the rank of #8 on our list of top aerospace and defense ERP systems.
Targeting govt contractors in the A&D space, Deltek has robust capabilities for project-centric organizations requiring deep multi-entity capabilities. It’s especially ideal for A&D companies that might have the majority of revenue coming from govt sector than from the commercial sector.
The govt space is tricky with unique compliance and quality needs that typically require substantial custom development on top of the vanilla ERP. Also, as the transaction volume for project-centric industries is not as high as the product-centric companies, it’s a great replacement for larger solutions such as SAP S/4 HANA and Microsoft Dynamics 365 F&O. Because of these reasons, Deltek can work with very large A&D companies.
What are some of its weaknesses? The narrow focus on govt verticals makes it unsuitable for companies with equal penetration in the commercial as well as govt A&D sectors. Equally challenging would be for companies that might have multiple business models such as field service and manufacturing. Yet another weakness would be its weak CRM capabilities, which might be unsuitable for organizations with long sales cycles and collaboration needs during the sales cycle. Also, not a fit for organizations that are primarily manufacturers or distributors selling in the govt sector due to its weaker manufacturing and distribution capabilities.
Recent updates? The only major update with Deltek was its acquisition of TIP technologies, which helps it to provide the industry4.0 capabilities. But these capabilities would not be applicable for the govt contractors. And not necessarily for the manufacturers that might have busy shop floors and need constraint-based manufacturing capabilities. Yet Deltek is still a very strong solution for project-driven govt A&D contractors and maintains the rank at #7 on our list of the top aerospace and defense ERP systems.
6. Oracle Cloud ERP
Oracle Cloud ERP targets large enterprises present in more than ten countries. These companies need richer financial control at the corporate level. While it would be a diverse solution for companies with complex business models, the last-mile functionality needed for aerospace and defense companies may require substantial custom development or configuration.
The strength of Oracle Cloud ERP for A&D companies includes its mixed-mode manufacturing capabilities natively built as part of the core solution. The capabilities also include quality and vendor-supplier certification features. In addition, its strength would be the global supply chain capabilities for A&D companies that might source parts globally. Finally, the native project and program management capabilities would allow for managing large programs. These programs require collaborating with a sizeable vendor base.
The weaknesses of Oracle Cloud ERP for A&D companies would be that it will take longer to configure and customize the quality and traceability reports. This is due to the lack of native support for A&D-specific functionality. Equally weak would be its capabilities for aerospace-specific certification and audit processes with large programs. And the pre-sales and contracting processes offered as part of Oracle Cloud ERP? May not feel as natural as they would be with the systems that provide pre-packaged A&D functionality. Recent updates? No substantial updates in 2022 that impact its capabilities for the A&D companies directly. We have upgraded the rankings of Oracle ERP Cloud slightly due to the lack of momentum in other ecosystems but it still maintains the rank of #6 on our list of the top aerospace and defense ERP systems.
5. SAP S/4 HANA
Like Oracle Cloud ERP, SAP S/4 HANA targets large global enterprises present in more than ten countries and may prefer financial capabilities over operational. In addition, SAP S/4 HANA would be suitable for large A&D companies that have internal IT capabilities and executive teams with deep ERP implementation and customization experience under their belt.
The strength of the SAP S/4 HANA platform for A&D companies includes its robust financial capabilities. It also includes approval flow for large finance organizations that may be publicly traded and may be preparing for IPO. The other strength of the SAP S/4 HANA platform for A&D companies would be its product model and HANA database. These capabilities allow companies to get end-to-end traceability of each transaction through the graphic process flow. Finally, configuration management would enable A&D companies to track the master configuration changes easily for audit purposes.
The weaknesses of the SAP S/4 HANA platform for A&D companies include the out-of-the-box reporting and audit capabilities required to report to the OEMs. Its weaknesses would also include the efforts required to enable ITAR and AS9100-specific capabilities and process flows that need to be enabled to ensure compliance. Additionally, its shortcomings would consist of the A&D-specific capabilities such as defense priorities and allocation systems. And it might require add-ons or custom development on top of the core platform.
Recent updates? No major updates that directly impact the functionality required for A&D companies. But we have still upgraded SAP S/4 HANA substantially on this list and because of this it still ranks at #5 on our list of the top aerospace and defense ERP systems.
4. Microsoft Dynamics 365 Finance & Operations
Like other large ERP solutions on this list, Microsoft Dynamics 365 Finance and Operations targets larger global companies. In addition, MS Dynamics 365 F&O offers much deeper operational capabilities as part of the core product but would be limited to the best-of-breed capabilities than SAP S/4 HANA.
The strength of MS Dynamics 365 F&O includes its native design for project-centric organizations for large A&D programs. Not only do these features help with cost code, time tracking, and budgeting. But also the scheduling, subcontract operations, and procurement capabilities right from the projects and programs. The strength of F&O also includes its CRM and field service solution that is pre-integrated to provide best-of-breed options. The field service capabilities of F&O are comparable with other leading field service offerings such as Salesforce or IFS.
The weaknesses of MS Dynamics 365 F&O would include the deep A&D-specific functionality and workflow. The other solutions would require significant customizations or configurations for compliance. The other weaknesses would be similar to Oracle ERP Cloud and SAP S/4 HANA, with efforts needed to enable ITAR, AS9100, and DPAS. MS Dynamics 365 F&O is rated higher than SAP S/4 HANA and Oracle ERP Cloud because of its native project and program management capabilities. It also has out-of-the-box public sector capabilities that would feel more natural for A&D companies than other larger solutions.
Recent updates? No major updates that directly impact the functionality required for A&D companies. But we have still upgraded MS F&O substantially on this list and because of this it still maintains the ranks at #3 on our list of the top aerospace and defense ERP systems.
3. Epicor Kinetic
Epicor Kinetic is one of the strongest mixed-mode manufacturing solutions used by SMB A&D companies. Tier 1 and tier 2 A&D manufacturing companies adopt it due to the versatile nature of the product and wide adoption among A&D manufacturers.
With advanced MES capabilities pre-packaged as part of the solution, its strengths include pre-packaged and pre-integrated out-of-the-box capabilities such as PLM, MES, CAD, and quality management integration. Another strength would be its ability to support diversified manufacturing business models and processes.
Its weaknesses? The lack of A&D-specific capabilities built out of the box, such as ITAR export compliance, AS9100, DPAS, and DCAA compliance standards. Another would be its reliance on a third-party quality module, which might result in vendor, contract, and product lifecycle risks. The final weakness would be its weaker support and that Epicor is not easy to work with as customers often report in their reviews. Recent updates? Epicor has been extremely active with this M&A this year. They have acquired several solutions such as cloud-based MES, CPQ, and field service solutions from Evron. But they don’t have as much impact on the capabilities of this industry and because of these reasons Epicor Kinetic still maintains the rank at #3 on our list.
IFS targets larger field service and MRO organizations. While IFS may not be the most natural fit for A&D manufacturers in the aerospace and defense ecosystems, its design is more suited for companies in the airline ecosystem. Especially when large airlines require a best-of-breed solution for the field service scheduled with a crew as large as 500K workers.
Its strength includes its deep scheduling capabilities of equipment as enormous as 737 aircraft and a massive fleet of technicians. And its field service and asset management capabilities are used in the best-of-breed setting in fortune-500 organizations where they might use SAP for corporate financials. Another strength would be its ability to support diverse business models such as mixed-mode manufacturing and field service. Finally, its strength includes its rearchitected cloud-native capabilities despite it being a legacy vendor.
Its weaknesses include that it would not be a fit for companies that are primarily manufacturers in the A&D space. While it’s super deep with line-level capabilities for MRO companies where it can service and invoice each line separately, these capabilities might be overwhelming for smaller tier 1 or tier 2 A&D manufacturers. Its weakness also includes its limited capabilities for the shop floor and engineer-to-order operations. Recent updates? While IFS has made some acquisitions this year, they are not as in line with this industry and because of this IFS still maintains the rank of #2 on our list of the top aerospace and defense ERP systems.
1. Infor LN
Infor LN is the large hybrid manufacturing solution designed to serve upper mid-to-large hybrid A&D manufacturing companies. It is an excellent replacement for A&D manufacturing companies that can’t afford to undertake expensive customizations and configurations on top of SAP S/4 HANA.
Its strength includes deep A&D-specific functionality such as contract flow-down clauses, govt audit support, and supplier progress payments. Its strength also contains deep integration with Microsoft projects and operational WBS capabilities along with hybrid manufacturing capabilities that might be critical for A&D manufacturers. Finally, its strength includes complex feature sets applicable to global A&D organizations, such as territory planning and global allocation of resources.
Its weaknesses include its narrow focus on hybrid manufacturing which might be an issue for companies with diversified business models such as manufacturing and distribution. Its weakness also consists of the weak community and availability of talent. The talent base is typically stronger than other mainstream ERP systems such as SAP S/4 HANA or Oracle Cloud ERP. Finally, its design is not from the perspective of a CFO, and it might struggle with global companies that might prefer financial control over operational capabilities. Recent updates? Infor has recently acquired Lighthouse and Infor LN is the first system that is likely to be integrated with it. And because of this reason, Infor LN is likely to get much richer functionality for this vertical, and because of this, it still maintains the rank of #1 on our list of the top aerospace and defense ERP systems.
The aerospace and defense companies have very involved operations and regulatory requirements that require tighter control of the processes. In addition, the admin overhead required to meet the regulatory obligations might eat up your margins.
You need an ERP system designed to support most of the A&D processes natively. Using a vanilla system not designed for aerospace and defense might require significant customizations and risky add-ons, which might lead to ERP implementation failure. So make sure you choose an aerospace and defense ERP system. And hopefully, this list can help you narrow down some options.