Digital globe

Perspectives

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

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

Click image to enlarge

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
View the full infographic

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.

Fullwidth SCC. Do not delete! This box/component contains JavaScript that is needed on this page. This message will not be visible when page is activated.

Did you find this useful?