ERP selection and vendor criteria for core financials has been saved
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.
- A leveled playing field for ERP selection
- Redefining the ERP selection process
- Results of the poll
- ERP evaluation criteria considerations
- Your next move
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)
- 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.
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:
- In our Core Financial ERP Survey, we engaged Deloitte leaders who have advised nearly 20 key clients across 10 industries, spanning both public and private sectors, through their ERP vendor selection process.
- In our May 2020 Dbriefs webcast on “Technology-enabled finance strategy: The value of a holistic approach,”1 we polled more than 4,000 participants to understand what was most important in their ERP selection (view full results of this poll by downloading the infographic here).
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:
ERP evaluation criteria considerations
|Capability fit||Technical architecture||Extensibility
||Product strategy and road map|
|25% 15%||10% 20%||15% 10%||0% 5%|
|User experience||Regulatory and statutory||Vendor ecosystem, culture, and relationships
||Total cost of ownership|
|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.
Navigating the cloud
Holistic finance modernization starts with vision, not technology