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ERP selection and vendor criteria for core financials

Choosing ERP software to drive sustainable long-term value

Functionality gaps between enterprise resource planning (ERP) systems are shrinking. With marginal differences between platforms, how can organizations take a more progressive approach to ERP selection for core financials? A holistic strategy focused on added value to the enterprise is key to creating a successful transformation.

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Redefining the ERP selection process

This year, we surveyed Deloitte leaders and other companies’ executives to examine how finance organizations evaluate and select their next ERP system:

Of note, 85% of clients represented in the Core Financial ERP Survey found marginal differences when doing a side-by-side capability comparison of leading ERP platforms. These customers realize that their next ERP won’t be determined only by how well the system meets Finance’s needs and that they should take a more holistic approach to choosing an ERP.

For organizations looking to enhance their ERP selection process, we’ve identified three guiding principles:

Technology-enabled finance strategy: The value of a holistic approach
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Deloitte’s cloud-based platform for ERP vendor selection

Take your ERP package selection to the next level with DecisionView. Learn how Deloitte’s platform provides an accelerated and efficient digital experience to the vendor selection process.

A leveled playing field for ERP selection

The ERP market for core financials is concentrated across a few leaders. These ERP vendors offer a broad portfolio of capabilities, such as:

  • General ledger
  • Accounts receivable and payable
  • Accounting rules (such as revenue recognition)
  • Projects
  • Financial reporting and analytics

Since leading ERPs are inching closer to functional parity as their product capabilities expand and mature, and comparing broader functionalities of different ERP financial platforms doesn’t lead to a differentiated outcome, the focus should shift to more targeted or signature use cases in lieu of broad, generic capabilities. There are also nonfinancial, process-related capabilities that could yield benefits to the larger enterprise.

Overall, this sparks a need for finance leaders to revamp ERP selection and evaluation criteria in order to land on a platform that will elevate their finance organization’s ability to deliver better business value and realize operational efficiencies.

Just ask Willow, who was tasked to help her finance department find its next ERP.

ERP vendor selection for core financials

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ERP evaluation criteria considerations

                             
  Capability fit     Technical architecture     Extensibility
     Product strategy and road map
                             
• Functionality and feature requirements
• Reporting, dashboarding, and visualization capabilities
   
 
• Cloud-based options
• Master data architecture
• System integration and performance
• Mobility and social collaboration
• Digitization/straight-through processing
   
 
• Custom data fields, business logic, and calculations
• Custom modules and functionality
• Interoperability with other cloud environments
• Flexibility and scalability
   
 
•
 Unique product accelerator and differentiators
• Future product road map
• Ability of customers to influence road map
   
25%  15%   10%  20%   15%  10%   0%  5%
             
  User experience     Regulatory and statutory     Vendor ecosystem, culture, and relationships
     Total cost of ownership
                             
• Usability and ease of navigation
• Learning curve and typical rate of adoption
• Comfort with using other applications with the same vendor
   
 
• Inclusion of statutory localizations
• Regulatory and compliance requirements
• Compliance with global data hosting and privacy
   
 
• Support and maintenance approach
• Training tools
• Community of customers and case studies
• Service level agreements
• Vendor alliances and partner
   
 
• License cost
• Software support and maintenance costs
• Implementation costs
• Cost of transition from legacy platform
   
15%  15%   10%  5%   10%  15%   15%  15%

 

  Weightage given by clients (ex ante) (as part of Core Financials ERP survey)     Weightage that should be given by clients (ex post)

Your next move

As you embark on your ERP-enabled digital finance transformation journey, you need a well-defined and communicated finance strategy. You should start by understanding the business strategy and the role finance will play in enabling those key business decisions.

Trade-offs are expected to come up time and again during the transformation journey. However, a well-defined finance strategy and vision reduces variability in the ERP selection process and helps manage expectations regarding capabilities.

Get in touch

Have questions or looking for help around vendor selection to support your finance transformation journey? Contact one of us below.

Raj Chhabra
Managing director
Deloitte Consulting LLP		 Fahad Salah-Ud-Din
Senior manager
Deloitte Consulting LLP		 Brian Moon
Senior manager
Deloitte Consulting LLP		 Smriti Sachdeva
Senior consultant
Deloitte Consulting LLP

Endnotes

1 Deloitte Dbriefs webcast, “Technology-enabled finance strategy: The value of a holistic approach,” May 20, 2020. View webcast.
2 Michele Buckley, “Tech go-to-market: Why tech sales cycles are taking so long and what needs to be done now,” Gartner, June 4, 2018. View article.
3 Ibid.

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