Market overview and GrowCFO survey results:
GrowCFO completed an independent finance systems survey across our finance leader community comprising thousands of members. Within our survey, we asked companies a number of questions, including the following:
- How long did it take to implement your finance system?
- How much did it cost and did you need third party support?
- Which companies would you recommend your finance system to based upon their size and complexity?
The purpose of this article is to present GrowCFO’s community feedback. All comments are based upon community feedback and do not necessarily represent the views of GrowCFO.
Overview
During recent years, we have seen a massive amount of change and disruption to businesses all around the world. With the continued evolution of economies, businesses need to be highly adaptable in adopting new methods and processes, embracing digital transformation for the good of all stakeholders, customers and staff.
This Solution Array assesses the performance and capability of leading vendors across four distinct segmentations, relevant to an organisation’s size, scale and agility compared with the cost of acquisition and ownership.
Established SME
Fulfilling the needs of the millions of micro, small and small-to-medium sized businesses, the traditional large brand plays from the likes of Sage and Intuit (the authors of QuickBooks) have been besieged for something like 10 years by new entrants based purely on Cloud-based technologies.
Xero, in particular, has been very successful in building market share against Sage in many territories, mining almost exclusively the SME accounting practice market in which its main competitor used to dominate.
Even Intuit, despite its dominant market position in the US, has had to respond by almost completely abandoning the original on-premise Quickbooks, replacing it with the new and solely cloud-based Quickbooks Online, sometimes at a cost of functionality being lost to users.
Legacy ERP
For larger, more complex, organisations the market is still very much dominated by a vast array of legacy, on-premise solutions that have evolved, in some cases, from products first released over 30 years ago.
They are complex to install, complex to manage and even more complex to remove or replace. Market growth has been stalled by restrictions arising out of the use of often complex in-house and/or “in-premise” IT infrastructure required to serve end-users.
While extensions such as Microsoft CRM have been developed for the Cloud (a tactic adopted to counter disruptors such as SalesForce.com), the widespread migration of Legacy systems has been met with significant resistance. An overall reduction in functionality, coupled with poor user experiences of software not designed for use in a browser-based environment, has led to stalled growth for Legacy systems.
Traditional ERP Leaders
Big (in the main US-based or quoted) vendors continue to dominate the enterprise space as they have done for decades. SAP, the biggest software company in the world, has adapted well in the new Millennium (after a couple of false starts with mid-range cloud-based systems – its SAP Business One product still relying on hosted options) with SAP S/4HANA (“High-Performance Analytic Appliance” or in-memory database technology) which has replaced the old SAP R/3 and SAP ERP solutions.
Oracle continues to be competitive having adopted for the largest enterprises similarly large scale data-centric applications hosted in its own Oracle Cloud (think big data centres also owned by Oracle); and by the acquisition of NetSuite, one of the early stage Cloud-based vendors based in the US; along with a quite diverse collection of disparate legacy acquisitions in other business sectors (e.g. the old Siebel CRM product).
Postmodern ERP Challengers
Combining stability, flexibility and maturity of functionality enjoyed by many thousands of organisations who understood the need for digital transformation in recent years as, with an enviable cost of ownership model (normally based around flexible per-user subscriptions), the new breed of “Designed for Cloud” solutions are challenging the tradition vendors across all markets.
As evidenced by the inability or lack of agility to convert older solutions or build new ones, the likes of Sage (similarly Oracle) chose to acquire one instead, in their case the US-centric Intact. Outside the US it is not uncommon for organisations such as Aqilla, who have the experience and proven track record in delivering solutions to organisations of a more complex nature than those served by the SME vendors (going well “beyond book-keeping” if you will), to be serving organisations with sophisticated requirements across multiple companies, taxonomies and territories, maximising the agility a true Cloud/browser-based solution affords combined with enterprise-class, adaptive functionality.
Conclusion
The typical upward growth of successful organisations is demonstrated through their software journey. Most small businesses will begin with software that is placed in the SME category of the Solution Array, when the business model is simple and the finance is likely to be undertaken by an individual who may not be an accountant. Products such as Quickbooks and Xero caters toward a requirement for simplicity.
As the requirements change, so does the software. Organisations that grow to have a complex structure require software that can handle these requirements, an expense that has become engrained culturally within the business world.
As finance departments look to the future, the allure of Legacy ERP systems has begun to stall, with Traditional ERP and increasingly Postmodern ERP solutions the more popular options as organisations look for a balance between security and functionality. Products such as Netsuite provide full functionality as well as contractual simplicity when using a singular vendor for all business system solutions. However, the costs and lengthy implementations associated with Traditional ERP systems increasingly prove too much for Mid-size enterprises who can implement a Postmodern ERP.
Postmodern ERP solutions can be implemented in stages, allowing organisations to spread out the implementation costs across their business systems. With this flexibility, they can implement the systems they most urgently require at a fraction of the cost and time that they would otherwise spend.
