ERP Systems List for Businesses Looking to Invest in ERP Software
Thinking of investing in an ERP system to support your wholesale business? The best place to start is by reviewing your current business processes, your future business needs and all the options at your disposal. In this article, we’re going to walk you briefly through a process that can help you determine your key business needs, as well as an ERP systems list to help you find a tool that will meet those needs.
Getting Started in the ERP Software Decision-Making Process
The ERP selection process can range from the simple to the more complex. For smaller companies just getting started with ERP, the process may even come down to: “I need a system for accounting, payroll, and inventory, and I have a certain budget. Here’s a name I’m familiar with.” However, we would encourage even small companies that are just getting started with ERP to take a long-term view of things. If growth is a goal - and it usually is – you must be thinking not just about today’s needs, but about what your needs are going to be as you grow. The decision-making process should include the following:
- Create a team. Even if it’s just a couple of people, you must clearly identify who needs to be involved in making this decision. This can should include company leadership, as well as representatives from various functional areas (such as accounting, logistics, etc.).
- Assess the status quo and develop a vision. What can you do now? What do you want to be able to do in the future? What sorts of services do you want to be able to offer customers? Be sure to get input from everyone on your team.
- Create a decision matrix. Incorporate all the items you listed when assessing your current state and future vision into a decision matrix. How important are each of these items? Some of the criteria to consider include cloud-based and on-premise options, cost, functionality, and the specific business needs that you identified when developing your vision.
- Create an ERP Software List. Create an ERP system list of the options that are worth considering. This step requires you to do some research (but you’re in luck, because our list in the next section will give you a good starting point).
- Plug it in. Plug your list into your decision matrix and determine how well each option on your ERP system list meets your criteria. One way to assess the relative importance of each of these criteria is to use the Analytic Hierarchy Process. It may sound complicated, but it’s basically just a way to rank the relative importance of multiple criteria, figure out which options meet those criteria, and then use that information to drive decision-making. There is even software that can help you do it.
Creating Your ERP Systems List
As you develop your ERP system list, you need to consider not just the systems that can handle what you want to be able to do today, but also where you see your company going in the future. This used to be much more difficult for small companies, which were forced to decide between more limited accounting or bookkeeping applications that supported current needs and were financially feasible but would not support needs as the company grew, and the much more expensive “true ERP” options that included a wider range of functionality but was often too expensive and complex for their current business. Now, companies can get the best of both worlds. Many of the accounting / bookkeeping vendors have expanded the range of functionality they support, while ERP vendors have been able to leverage cloud computing to make simplified versions of their applications available to smaller businesses at a more manageable cost. Here is a list of ERP software vendors that includes some of the options we think wholesale companies can consider.
Once a primarily accounting-based application, Sage has expanded its offerings and now delivers a range of cloud-based, mobile and on-premise options to meet a variety of business needs. Sage is definitely able to meet the needs of many SMB companies as they grow, with offerings ranging from Sage 50 and Sage 100 targeted at small businesses with more limited accounting needs, to Sage 300 and 500 which can support more complex needs of mid-market and small enterprise companies, such as inventory, manufacturing and distribution. One potential downside of Sage for fast-growing companies is that it has more limited reporting functionality and slower processing speeds for higher volumes of data.
NetSuite is a pure cloud player in the ERP space that has grown from a primarily CRM based application to a full range of ERP offerings including financials, accounting, global consolidation, purchasing, payrolls, inventory control, materials resource planning (MRP), production planning, shop floor control, engineering change control and employee management. NetSuite is aimed strongly at the mid-market and lower end of the enterprise space. NetSuite’s offerings include NetSuite ERP, NetSuite OneWorld for global companies, and NetSuite SuiteCommerce for eCommerce companies.
3. Microsoft Dynamics
Microsoft Dynamics is comprised of several software application lines acquired primarily through acquisition, including AX (formerly Axapta), GP (formerly Great Plains) and NAV (formerly Navision). NAV is the leading ERP system for wholesalers in the mid-market space. It is a cloud-based solution with accounting, reporting, supply chain management, service, and manufacturing functionality capabilities. Like Sage, a negative that has been identified of Microsoft Dynamics NAV is more limited reporting capabilities. However, it is a strong player in the mid-market and lower end of the enterprise space.
Like Microsoft, Oracle has expanded its ERP offerings primarily through acquisition. It offers a range of ERP solutions, including PeopleSoft and Oracle, both primarily targeted at larger enterprise companies, and JDEdwards for mid-market manufacturing companies. Once upon a time, a solution like Oracle would have been far too complex and expensive for any but the largest enterprise wholesale business to consider. Even now, the functionality offered is likely too complex for most small and medium businesses, unless they are growing very quickly and need functionality oriented more towards future than present needs. However, Oracle is making a play for mid-market companies with cloud-based versions of its JDEdwards applications.
Like Oracle, SAP once would have been considered too complex for most small to medium businesses, but with SAP’s move to the cloud (evidenced by the 2015 release of its cloud-based SAP S/4 HANA applications), SAP is beginning to more effectively address the business needs of smaller companies. SAP’s offerings in the ERP space include SAP BusinessOne, a more limited version of its ERP applications targeted at smaller businesses. The problem with SAP from an SMB perspective is not whether it can meet the needs for functionality as a company grows, but whether it can do so cost effectively. Other vendors to consider as you are listing your options include SysPro, Epicor, and Infor. A great place to start as you are gathering information to create your ERP software list is to refer to industry analysts like Gartner Group, which releases its “Magic Quadrant” review of ERP applications on a yearly basis. Are you considering making investments in ERP? Questions? Let us know by leaving a comment below!