As you are ramping up your ERP evaluation journey, your goal might be to identify the top 10 ERP systems for your industry quickly. While this is a great strategy to expedite the process, the top 10 ERP system lists might result in false positives and negatives. It is so as the ERP decision process is highly involved and requires careful analysis of your business model. You also need to understand how the ERP systems’ information architecture and product design may align with your business model and transactions.
Rather than referring to the top 10 ERP systems list, you are better off following the process of elimination by paying close attention to the most oversold ERP systems and in which situations they might be overstretching themselves.
The underlying ERP product design plays a critical role in whether the ERP system would suit your business model. And it also plays a role in whether the users would feel comfortable using it. For example, suppose the ERP system is too far off from the business model or the organization’s size. In that case, the users might create poorly documented custom workflows on top of the core product or buy add-ons that could pose significant business continuity or financial risk for an organization.
This article outlines the top 10 ERP systems that often misrepresent their core capabilities and misguide their buyers. To finalize this list, we have analyzed hundreds of ERP systems and their marketing positioning through publicly available information, along with our teams’ experience in evaluating these ERP systems for our customers.
The purpose of this article is not a recommendation to stay away from these products but to carefully vet or maybe seek professional guidance from one of the independent consultants. So, you don’t end up buying misrepresented claims from software vendors or their resellers. On the contrary, these products could very well be one of the best fit depending on your situation and needs.
QuickBooks could be an excellent solution for startups when you don’t need your departments to be integrated. For example, your accounting could stay siloed without having to integrate with your CRM or an e-commerce system. In addition, since you might not have as many transactions in your business, the efforts in duplicating data across systems may not be as significant.
So, you might be able to stay on QuickBooks until you are $2-3 million in revenue, and at times $5 million if your transaction volume is not high. But, even in this space, now you have richer options, such as Zoho, ECi JobBOSS, or Odoo. And they might not come with as expensive an implementation price tag as with Acumatica or NetSuite as these products’ design is simple and meant to help in the self-serve mode.
QuickBooks is not necessarily an ERP system. But many people in the accounting community hang on to QuickBooks for way too long. They do so due to their familiarity with the product and their incentives to earn service fees in creating dashboards and reports. You might get these reports out of the box with several other richer solutions.
There is also a misconception in the accounting community that the other richer ERP systems such as NetSuite or SAP Business ByDesign are unnecessarily complex. But they don’t understand that the complexity of deeper operational, Supply Chain, and reporting needs increases as the business grows. And they end up replicating a lot of this functionality on top of QuickBooks, which is more expensive to maintain and forms poor data hygiene. They also form poor organizational habits harder to change in the long run once the organization is used to these ad-hoc operational practices.
These products are designed for companies that have just one legal entity and are primarily based in one country. For example, this category of products could be an excellent fit for US-based companies with just one legal entity. And these companies will not have another entity in a foreign country such as South East Asia or South America.
Most startups start with one local entity. But they need to quickly establish another to realize the cost benefits available through an offshore entity. So even the smaller manufacturing or distribution companies generally have another entity in different countries. At this stage, if you want to capitalize on synergies offered by these multiple entities, Infor Visual might fall short.
While Infor Visual is an excellent product with several features designed to help the unique needs of custom manufacturers, we have seen disturbing trends in the Infor Visual channel where the product is installed for companies with several entities. And in other cases with businesses that might not be suitable for the product, such as construction-centric manufacturing shops where they might need operational functionality of construction business such as submittals, collaboration with general contractors, sub-contractors, architects, etc. And such overcommitment results in a poor experience for the customers and their users.
Also, Infor Visual doesn’t have a clear direction for the cloud, but Infor and their channel partners actively promote it. For these reasons, Infor Visual lands at number 9 on our list of the top 10 ERP systems most oversold in 2022.
Sage Intacct is a fantastic product for global companies that require deep financial functionality. It also has last-mile functionality for several service-centric industries such as not-for-profit, public sector, construction, tech, and financial services.
But it does not have the core functionality to support product-centric industries. And we have seen scenarios where companies sell Fulcrum ERP or Katana MRP in conjunction with Sage Intacct. They do so with the claim of no-code development and best-of-breed solutions. They also claim how the world of SaaS will take over the mainstream ERP players.
Natively, Sage Intacct doesn’t have functionality for product-centric industries and should not be sold to these industries. Since Sage Intacct stretches itself from its core capabilities and is sold to industries where it’s not a natural fit natively, it lands at number 8 on our list for the top 10 ERP most oversold in 2022.
Just like SAP B1, Microsoft Business Central (BC) is a fantastic product for SMBs needing global financial and localization capabilities when one or a couple of subsidiaries might be present in complex geographies such as Europe, Southeast Asia, or South America.
But it does not have the rich operational capabilities that other solutions such as Epicor, Infor, or Sage X3 might offer. And since Microsoft does not have tight control over its channel and sells these products with a very hands-off approach in the OEM setting, we have seen scenarios where a significantly thick add-on might sit on top of MS BC.
In addition, if this add-on is critical for business operations and poorly documented, it often results in implementation issues. Due to this reason, we have seen several failures on this product. And that’s why it lands at 7 on our list for the top 10 ERP most oversold in 2022.
Microsoft (MS) F&O users and MS partners often misunderstand and miscommunicate that a bigger solution can solve problems for most companies of any size. But the reason why MS partners and sales reps like to push larger solutions is to make their deals bigger. The larger the solution, the more expensive it is.
Also, the MS channel is not as controlled as the other ERP vendors such as SAP or Oracle. And because of this, there might be significant issues where you might not be eligible to receive support from MS. It would be true if the license is acquired through one of the OEM arrangements.
In this arrangement, the larger channel partners or an ISV buy a bulk of licenses and are responsible for supporting the product. The bigger solutions are designed for a specific purpose. They are designed for companies with larger IT budgets. These companies can afford to build last-mile functionality on top of the core product.
The larger companies have different needs financially due to their nature, and they often use a specialized solution in the tiered setting to meet the plant level needs. There are scenarios where the larger solution may meet the needs of a smaller company. But it will feel overkill due to the process steps required to complete a task.
For example, if you are selling kitchen sharpeners or toilet flushes, the operational workflow for customer service would be different. It would be different in how you would handle the warranty. The flow would be different from a car that may have several serviceable parts that might carry their own warranties. Replicating what works for a car to a kitchen sharpener would typically feel like overhead. And the users might never use the software. Or they might create custom ad-hoc workflow through customization. These workflows might have downstream implications if the implementation doesn’t follow product design guidelines.
Similar to Microsoft F&O, there is a misunderstanding among ERP users and SAP partners that a bigger solution can solve problems for most companies. But the real motive behind why partners and reps like to push larger solutions is to increase their deal size. In addition, the bigger solutions are designed for a specific purpose. They are designed for companies with larger IT budgets. The companies that can afford to build last-mile functionality on top of the core product.
The implementation issues associated with MS F&O and SAP S/4 HANA are fairly similar, with the only exception being that SAP has far more control over its channel than Microsoft. However, SAP S/4 HANA is also behind in its cloud capabilities compared to other competing solutions such as Oracle Fusion ERP or Microsoft F&O.
SAP also does not make it clear whether you will be getting the legacy codebase or the new cloud-native codebase. They don’t provide clarity especially when you are purchasing SAP S/4 HANA. And finally, there is a perception, especially among the CFOs, that SAP is a solution to all their problems. And if SAP can’t meet their needs, none of the other companies should be able to do that either. For this reason, SAP S/4 HANA is often oversold. And it lands at number 5 on our list for the top 10 ERP most oversold in 2022.
Odoo is an excellent product for startups and technically savvy companies, such as eCommerce and Industry 4.0 system integrators. At this stage, you can get far more out-of-the-box (OOTB) functionality with Odoo compared to QuickBooks and without spending significant money with the implementation or consultants as the native product is relatively simpler and designed to work in the self-serve model, just like QuickBooks.
But the notion of open-source misguides customers. And they feel that Odoo can work with companies of any size when the product is designed for the QuickBooks segment. And it would not be comparable to other competing solutions such as Acumatica or NetSuite with their native capabilities once you can afford the implementation dollars or consulting help.
The competing solutions could be far cheaper once you outgrow Odoo. However, in our experience, companies hang on to Odoo way too long because they feel that they can customize it the way they want without performing buy vs. build and ROI analysis of these features. For these reasons, Odoo lands at number 4 on the top 10 ERP most oversold in 2022.
The core SAP Business One product is extremely weak in the cloud. It requires thick add-ons provided by partners to work in the most product-centric industries except for smaller distribution operations and light manufacturing.
SAP partners also have a tendency to sell the underlying on-prem code base as the cloud. They do it even when they may have simply deployed this codebase to AWS or Azure. While you might receive the financial benefits of the cloud through this arrangement, the efficiency and user experience of the legacy code will not be comparable with other cloud-native solutions.
You will also be bearing a much higher risk with the vendor add-ons if the core functionality of your business operations, such as sales compensation calculation or outside processing for packaging or plating operation, will be performed with the add-ons. For these reasons, SAP Business One lands at number 3 on the top 10 ERP most oversold in 2022.
Global Shop is a much smaller product due to its database and product design. It doesn’t have the same transaction and database failover built similar to other competing products, even in the smallest segment.
Global Shop would be comparable to ECi M1, ECi Shoptech, ECi JobBOSS, and perhaps ProShop. But the other competing solutions that often compete with GlobalShop, such as Microsoft GP, Macola, SYSPRO, or Infor Visual, have far superior database capabilities.
It’s designed to be more of a desktop app. These apps are suitable when you have one or a couple of desktop systems using the package. It could be a great choice when you are a startup as it might offer far deeper operational and manufacturing functionality than most other competing solutions in this category. But you might be sitting on significant business continuity risk once you cross the $5 mil revenue mark.
While this is a small product designed to support the startups, we have seen GlobalShop be sold to much larger companies with four entities, which would be a stretch for Global Shop due to its technical architecture and database capabilities. For this reason, Global Shop lands at #2 on the top 10 ERP most oversold in 2022.
ProShop is a relatively newer ERP system targeted for machine shops. While they claim to be an ERP system, it’s a very thick add-on that sits on top of QuickBooks or Sage 50. And it’s ideally suited for the shops on QuickBooks or Sage 50. These companies buy ProShop as they may not have access to the thick manufacturing features they need to run their operations. It’s also a unique solution as it combines several features of quality management systems and MES. If you were to buy other ERP systems, you would spend a lot buying multiple systems and integrating them. So it’s an ideal solution for smaller shops that can’t afford large implementation dollars or integration.
However, ProShop is limited by the transactional and database capabilities of QuickBooks and Sage 50, and, just like QuickBooks, you might be sitting on significant business continuity and data integrity risks if you stayed on ProShop for too long. Despite being functionally richer in capabilities, the limitations highlighted in the QuickBooks will be equally applicable for ProShop. ProShop may also be broader in scope than most ERP, MES, or quality management systems combined.
The reason why products such as QuickBooks are limited in their functional capabilities as they are targeted at startups. These startup companies have limited transactional volume. The best way to understand technical risks associated with having such a thick add-on on top of QuickBooks would be to think of a tiny car with a heavy-duty trailer. You chose to buy a small car as you can’t afford an SUV. But if you are overburdening the tiny car way beyond its technical capabilities, the car is likely to break. Or you might see performance issues when this combination is trying to do the heavy lifting that it’s not designed to do.
To avoid these performance issues, ProShop has taken significant shortcuts with their data model and flattened out the information model, which would pose a substantial risk with the translation of your information and data model once you outgrow ProShop. Since ProShop is overstretching way beyond its technical capabilities. And due to significant business continuity risks, it’s number one on the top 10 ERP most oversold in 2022.
The ERP system selection is complex, with so many moving parts involved. Traditionally, the ERP selection process focused simply on the system’s functional capabilities. But the technical and native capabilities are equally relevant. They are relevant to assess whether the ERP system produces the business and efficiency results. The results that you are hoping for from your transformation initiatives. Therefore, the native capabilities of ERP products play a critical role in your ERP journey.
So make sure you do a thorough evaluation rather than relying on the top 10 ERP lists or take help from independent ERP consultants who maintain a deep understanding of these ERP systems and vendors along with their technical limitations.
Well, most ERP systems and vendors would have overcommitted in some shape or form due to the lack of information or understanding of customers’ business models. These are the ones that oversell most commonly and consistently. The ERP engagements require tighter collaboration with the consultant who is likely to be implementing the ERP systems to avoid a scenario where the ERP system might not fit your business.
Well, the ERP systems are designed keeping specific companies and industry segments in mind. And there are typically several variables that need to be evaluated. Therefore, the top 10 lists are perhaps not a good idea to review as they could result in false positives or negatives. But that is not to say that you should not be looking at the top 10 lists. Instead, you should review them deeply why a specific system is listed in a category and use those reasons to identify if the ERP would be a fit for you or not.
There were several of them, including Oracle Fusion ERP, NetSuite, and Acumatica. Unfortunately, we have seen instances where these ERP systems overcommitted and sold to the industries they might not support natively. But since we don’t see these as often as the others on the list, we have not included them.
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