Disclaimer: Third Stage Consulting is an independent ERP consulting firm. Third Stage has no financial ties to ERP vendors, either directly or through parent companies or affiliates. Accordingly, the below analysis is completely technology-agnostic and 100% free of vendor bias or compensation.

As we enter the home stretch of the year, many of our clients are preparing for digital transformations in 2020. With this in mind, many are turning to us to help them evaluate and implement the top ERP systems for 2020 and beyond.

This is an interesting year to consider new ERP systems. At the same time ERP vendors are incorporating revolutionary capabilities into their solutions, many are also in a state of transition. These products are on one hand introducing artificial intelligence and blockchain to customers, but on the other hand struggling to stabilize basic functionality such as manufacturing and warehouse management.

Methodology for ranking the top ERP systems for 2019

We evaluated nearly 100 systems in narrowing our list of top ERP systems for 2020. In doing so, we used a more comprehensive quantitative and qualitative methodology for this year’s rankings. We also increased our data points to include our team’s more recent implementation experience with each of the leading solutions, and we expanded our top ERP systems from the top 5 to the top 10.

We used the following quantitative and qualitative criteria to determine the best-performing systems:

  • Customer adoption rate
  • Ease of implementation, including average time and total cost of ownership
  • Breadth and depth of functionality
  • Maturity of cloud solutions
  • Flexibility of solutions
  • Scalability of solutions
  • Ease of integration to third-party systems
  • Vendor’s product roadmap and overall viability
  • Ease of organizational change management and training
  • Strength of vendor ecosystem, such as system integrators and partners
  • Return on investment

The major ERP vendors are in the process of overhauling their flagship solutions as part of their migration to the cloud. This mass overhaul of the leading solutions – along with the fact that the ERP vendor space has become incredibly competitive – has created a shakeup among the leading ERP systems. Understanding the pros and cons of leading ERP systems is a critical component of defining your digital strategy for 2020 and beyond.

Below are some of the top ERP systems that your organization should be considering in 2020. The video below provides a more comprehensive view of the top 10, with a summary of each of the 10 outlined below.

#10. Service Now

Although it is not a traditional ERP system, Service Now is a great product for service-based organizations that are open to a more best-of-breed option rather than a one-stop ERP system. The product’s focus on service capabilities and streamlined workflows has increased its adoption in recent years, as has its native cloud-based architecture. This is an emerging and up-and-coming solution that many organizations are considering.

#9. Workday

Workday is another cloud-based, best-of-breed HCM software option, although the product is expanding its reach into financials and other traditional ERP functionality. The product is not a great fit for companies with complex supply chains, manufacturing operations, or other more complicated ERP functions, but it can be a good fit for companies with relatively simple operations and more of a focus on the employee experience. This is also a good option for companies evaluating Workday vs. SuccessFactors as their HCM software solution.

#8. Infor M3 and CloudSuite

Infor M3 and CloudSuite are especially attractive to mid-size manufacturing and distribution organizations, particularly those looking for a lower-cost, less complex, and lower-risk options to SAP S/4HANA or Oracle ERP Cloud. It has invested heavily in this space over the years, so it has a robust set of capabilities that work well for many of our manufacturing and distribution clients.

Although we recently commented on our opinion that Infor has lost its way in recent years, we still see a variety of companies leveraging Infor M3 and CloudSuite. Once Infor more clearly defines its roadmap for M3, CloudSuite, and other systems in its portfolio, it is likely to move further up the top 10.

#7. Salesforce

Many think of Salesforce as simply a CRM system, but it has become a more viable cloud-based ERP solution for small- and mid-size companies. Through its Force.com platform, Salesforce has enabled a variety of third-party applications to transform a core CRM system into more complete ERP system. For example, FinancialForce and Rootstock provide add-ons that make the Salesforce vs. Oracle NetSuite comparison a more viable comparison for the mid-market.

On the downside, the flexible best of breed model can create a certain degree of technical complexity that can overwhelm many organizations. A mature and relatively sophisticated internal IT team is needed to effectively implement and support the products required to patch together a complete ERP system.

#6. SAP S/4HANA

SAP appears to be investing heavily to remediate gaps in its core S/4HANA system, and it is still among the best two to three options for many larger enterprises. It also has a large R&D and product innovation budget in its war chest, which bodes very well for the long-term viability and appeal of the product. Its acquisitions of SuccessFactors, Ariba, and Qualtrics offer customers a scalable best of breed model to provide broader and more flexible enterprise capabilities.

Although SAP has historically been the gold standard of ERP systems – especially for large companies – we are seeing red flags with the S/4HANA product itself and customer reactions to the product. For example, legacy customer adoption is abnormally low (especially in the upper mid-market, despite SAP’s 2025 deadline), there are fairly significant gaps in S/4HANA’s functionality, and we are already seeing a shortage of qualified S/4HANA resources. Assuming SAP can mitigate these and other limitations, S/4HANA is likely to move back up the list in coming years.

#5. Sage X3

Sage X3 is a new entrant to the top 5, mainly because of its strength in the mid-market manufacturing and distribution space. We have seen many in the middle market effectively implement the system as a low-cost and low-risk alternative to SAP S/4HANA and Oracle ERP Cloud. We are also seeing the company transition from a “small” ERP system to one that can handle more complex manufacturing and supply chain needs. Sage is a leader in the “don’t try to be everything to everyone” movement in the ERP software industry.

On the downside, the product tends to struggle with larger and more complex and diversified manufacturing and distribution clients. For example, companies with global supply chains, operations, and a variety of business needs may find the functionality of Sage X3 to be a bit limiting.

#4. IFS

IFS is another product that has focused strengths, which is enough for the product to crack our top 5 this year. Although the product is not well-known outside of its European headquarters, it is a very mature and well-established product that focuses on field service-based organizations and some industrial manufacturers with heavy asset management, project management, and MRO needs. Even though we don’t recommend this product for a high-volume of clients each year, we have seen a very high win rate when it is short-listed among our clients, and the product’s mature functionality and flexible deployment options differentiates it from other vendors.

On the downside, the company is still too dependent on its direct resources to sell and implement the software. This will need to change if it wants to truly penetrate and increase customer adoption in regions such as North America, Latin America, and Asia. It is also not a great fit for manufacturing clients outside of its core functional areas of focus.

#3. Oracle ERP Cloud

Oracle ERP Cloud has moved up the rankings this year, largely due to its increasing momentum in customer adoption and maturing cloud product line. With its maturing product functionality, we also see the product performing well in our clients’ SAP S/4HANA vs. Oracle ERP Cloud evaluations. The product’s relative flexibility also supports emerging ERP best of breed models, which can result in an attractive cost, risk profile, and business benefits.

Having said that, the product still has a way to go to achieve the functional maturity of its legacy on-premise products, such as JD Edwards and eBusiness Suite. Its technical complexity relative to products such as D365 or NetSuite can be overwhelming to some organizations, so these are criteria that should be considered in your ERP evaluation process.

#2. Microsoft Dynamics 365

Microsoft D365 continues its strong showing in our top 10 list this year, largely because of its ability to scale between the mid-market and larger enterprises. We are also seeing increasing customer adoption, and our team is helping manage a number of successful D365 implementations. Perhaps most importantly, the product provides a good deal of flexibility to customize workflows and integrate to other systems, which can mitigate implementation risk and optimize ROI.

On the flip side, the partner reseller model is still a hot mess, with too many unqualified resellers crowding the market and making implementations of the product more difficult than they need to be. This is probably the biggest liability keeping it out of the #1 spot this year. We also see the product’s flexibility being more of a liability for some organizations: just because you can change the software doesn’t mean you should.

#1. Oracle NetSuite

The industry’s pioneer cloud ERP system is in a great spot now that other vendors are struggling to prematurely rush their cloud offerings to market. Add the fact that NetSuite seems to be finally capitalizing on the strength of Oracle’s financial and organizational resources, and the product moves to the top of our list for the first time. Low adoption among the upper mid-market and larger enterprises had kept the product out of the top spot in years past, but we are seeing enough larger organizations prove the product’s scalability with successful deployments – especially in two-tier best of breed models. The product holds up well in comparisons of NetSuite vs. D365 and other systems.

The product still lacks robust implementation and reseller options, but this is slowly changing over time. We also find that the product has limitations with more complex manufacturing, distribution, EDI, and retail situations, so it is important to vet some of these limitations against your business needs.

ERP systems that didn’t make the list

Many very good ERP systems did not make the list. However, any one of them could be the #1 best fit for your organization, so it is important to not limit your options to the ERP systems listed in our annual rankings.

For example, we have seen our clients succeed with the following ERP systems, despite the fact that they didn’t make our top 10 list:

  • Epicor
  • Plex Systems
  • Rovisys
  • Priority Software
  • Deacom
  • Accumatica
  • Best of breed solutions

These and other systems in the market may very well be a great option for your needs, so be sure to objectively consider all of your options.

Top ERP systems are largely dependent on company size, industry, and strategic goals

At the end of the day, the best ERP systems for your organization will largely be dependent on your company size, industry, and strategic goals. Where one particular system may not even make a company’s top 10, that same product could be the #1 pick for another. For example, a technology-agnostic comparison of SAP S/4HANA vs. Microsoft Dynamics 365 illustrates two products that couldn’t be much different.

This is where independent ERP consultants such as Third Stage can help. We help the world’s leading organizations define their digital strategy, select the right software, prepare for implementation, provide implementation quality assurance, and manage organizational change.

Contact me to brainstorm potential options for your digital transformation in 2020 and beyond. I am happy to be an informal sounding board as you evaluate these 10 options and other ERP systems in the market!

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