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Finding the Best ERP and Accounting System for your Business

January 3rd, 2011 Sandeep Walia No comments

For someone looking to find the ‘best ERP System’ for your business – this is never an easy process. The selection process involves listing out your functional requirements, understanding the ERP landscape and then evaluating the leading products to see which one fits best from a functional, budget and industry perspective for your business. This can be extremely tedious and can easily take over 6 months. Fortunately there are decisions accelerators out there that help you short-list down to the top 2-3 solutions so you don’t have to start by looking at over 15 ERP solutions. Every year Gartner studies the ERP market landscape and published the magic quadrant that lists out the ERP players. The Magic Quadrant segments players into four quadrants

  • - Leaders: The players considered the best with both the vision and ability to execute. Typically these players have newer technology, the vision to invest in the product and take it in the right direction as well as the full breadth of features required.
  • - Challengers: ERP Software vendors that often compete and have the ability to execute but not the vision. These players typically have older technologies and lack a unified vision but have a complete set of features as they have been in that market for some time.
  • - Visionaries: Players that do not have the feature capability today but are investing in the product and have the vision to take it in the right direction.
  • - Niche Players: Point solutions that may work for some segments but generally have very little investment behind them and also do not have a rich set of features.

Having been in the ERP segment for nearly 20 years – I’m not surprised to see Microsoft Dynamics AX be in the leader quadrant for the second year in a row. Microsoft Dynamics AX is a newer player to the ERP market compared to SAP and Oracle but has taken the segment by storm due to heavy investments by Microsoft into the product as well as newer technology that makes it more agile and flexible to adapt to a business. Per the study, Gartner sees this (ERP) market as undergoing a major modernization, by which established systems with deep functionality on older technology are being displaced by more modern and agile systems. These new systems enable users to be more agile in their responses to changing market conditions and to grasp new business opportunities faster. Microsoft Dynamics AX definitely reflects the new breed of players that have displaced the old guard by bringing both breadth of functionality, new technology, intuitive user interfaces as well as the vision to provide solutions that place a premium on usability that increases customer satisfaction with dashboards/ role centers and specialized industry solutions.

Example of the Role Center in Microsoft Dynamics AX that serves as a home page for users and helps focus on usability

Figure 1. Example of the Role Center in Microsoft Dynamics AX that serves as a home page for users and helps focus on usability.

While I certainly have a bias to Microsoft Dynamics – it is because of the power and flexibility of the solution. I’ve worked with both Oracle and SAP and have been disappointed by the lack of flexibility and the cost to implement even a simple configuration. Based on my experience, changes that could take a week in SAP we are able to do in less than 2 hours in Microsoft Dynamics AX.

Gartner Magic Quadrant for ERP for Mid-Market companies with annual revenues between $50 million to $1 billion

Figure 2. Gartner Magic Quadrant for ERP for Mid-Market companies with annual revenues between $50 million to $1 billion

According to Gartner, “Microsoft Dynamics AX is specifically targeted at midmarket organizations. It offers broad and robust functionality, and delivers low TCO through integration with other Microsoft products and technologies. Microsoft’s industry strategy for AX results in strong functionality, which is built by Microsoft’s internal resources or acquired from proven partners.” Gartner points to interesting key trends in this study. Key among them are listed below

  • Service-oriented architecture (SOA) and BPM prove their value in packaged applications for the midmarket: A combination of SOAs and BPM concepts allow for an unprecedented level of flexibility and adaptability.
  • New user interfaces make ERP adoption and collaboration easier: Ease of use and rich user interfaces help users to find their way through the functionally comprehensive ERP packages. Built-in search capabilities help users to identify and locate the business objects that need their attention, and the role-based concept of roles helps them to select the appropriate action to take. Personalization lets users define the way that objects are presented and can be acted upon, and saves them from having to go through complicated screen sequences to complete a required business activity. This is especially important for users that only occasionally have to access an ERP solution. Built-in collaboration features help these users to easily get in touch with contacts inside or outside their own enterprises, which is extremely useful in midmarket companies that rely more heavily on the flexible, ad hoc cooperation of their workforce in areas with less well-defined business processes.
  • The most commonly used technology for extracting and analyzing data in midmarket companies is Microsoft Excel:

    The following are the criteria used by Gartner to select qualifying software vendors. An ERP suite must fulfill all of these criteria to be included

  • Geography: The vendor must serve at least two of the following three global regions (North America; Europe, the Middle East and Africa [EMEA]; and Asia/Pacific). The product must have a minimum of 20% of new customer entities in at least two of these three geographies.
  • Installed base: The vendor must have at least 1,000 customers in a product’s installed base to qualify, and the installed base distribution must be at least 20% in two of the three geographies.
  • New license sales: Of quarterly license revenue per product submitted, 10% must come from net-new customers. Also, two of the three geographies must contribute at least 20% of new license sales each.
  • Viability: The offering must be a viable and supported offering at the time of publication of the Magic Quadrant.
  • Application functionality: The functionality provided by the vendor in the application must contain the systems of records for G/L and product master, plus at least four of the following systems of record: order data, customer master, employee master, vendor and supplier master, purchasing, contracts, assets, pricing, cost, quality and planning.
  • Architecture: The majority of an application must be in one architecture and data model (application platform), or the vendor must have a credible vision for accomplishing this.

As you evaluate the best ERP for your organization, use this and other studies like this to shorten your fact finding cycle and reduce your cost to identify the best solution. If you need any additional information on ERP selection please email us at erp@ignify.com.

Sandeep Walia is the President & CEO of Ignify. Ignify is a technology provider of ERP, CRM, and eCommerce software solutions to businesses and public sector organizations. Ignify is a Microsoft Dynamics Inner Circle Partner and ranked in the top 18 Microsoft Dynamics partners. Ignify has been included as the fastest growing business in North America for 4 years in a row by Deloitte, Inc Magazine and Entrepreneur Magazine. Sandeep was ranked in 2010 in the Microsoft Dynamics Top 100 Most Influential People List by Dynamics World