Top 10 Cloud-Based ERP Systems of 2023.

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Understanding the Diverse Landscape of Cloud ERP Systems in 2023

Cloud-based ERP systems come in various forms, each with its unique characteristics. Some vendors attempt to present a cloud ERP system by simply replacing the front-end layer while maintaining outdated legacy backends like RGP. On the other end of the spectrum, certain vendors may deploy an on-prem code base in their data center, arguing that a “web link” constitutes cloud functionality. There are even cases where financial companies are hired to translate on-prem offerings into SaaS. The term “cloud” has become so complex that evaluating and ranking these systems requires a comprehensive assessment.

To gain a better understanding, let’s explore the different benefits offered by cloud ERP systems and how the cloud terminology is used within each context. These benefits include financial translation of spend, reduced reliance on IT, enhanced mobility, and improved user experience through the modernization of all system layers. While financial benefits are easier to quantify and comprehend, the technology benefits, although intuitively grasped by some ERP users, can be more challenging to articulate and realize, leaving others with only a partial understanding even after years of system usage.

Legacy experiences associated with certain ERP systems contribute to longer training times and increased operational complexities. Examples of such frustrations include the inability to open the application in multiple tabs, limited search capabilities that only cover data or menus, inadequate transaction traceability, and the absence of embedded experiences with operational workflows when generating PDF reports. These issues often become apparent only after using the system extensively.

To assess and rank cloud ERP systems, several criteria should be considered:

  1. Definition of a Cloud ERP System: How comprehensive is the functionality provided in the cloud? To what extent does the system offer a cloud-based experience, encompassing financial, operational, and technical aspects? Has the entire stack been modernized or only the front-end?
  2. Overall Market Share and Number of Customers: The higher the market share in the cloud, the better the ranking.
  3. Ownership and Funding: A higher level of commitment from management to the cloud product roadmap leads to a higher ranking.
  4. Quality of Development: The presence of cloud-native capabilities contributes to a higher ranking.
  5. Community and Ecosystem: A larger community with active participation from cloud users contributes to a higher ranking.
  6. Depth of Native Functionality for Specific Industries: The availability of publisher-owned, out-of-the-box cloud-native functionality leads to a higher ranking.
  7. Quality of Publicly Available Product Documentation: The availability of comprehensive and informative product documentation contributes to a higher ranking, while poor documentation results in a lower ranking.
  8. Cloud Market Share and Publisher Commitment: The higher the focus on the cloud, as documented through financial statements, the better the ranking.
  9. Native Support for Diversified Business Models: The system’s ability to natively accommodate diverse business models contributes to a higher ranking.
  10. Acquisition Strategy Aligned with Cloud-Native Approach: Acquiring legacy products solely for marketing purposes leads to a lower ranking.
  11. User Reviews: In-depth reviews from cloud-native users positively impact a product’s score.
  12.  Scroll down and know more about this.

It is important to note that the systems considered must be ERP products and not edge products or add-ons owned by ISVs or VARs that sit on top of other accounting platforms, such as QuickBooks, Freshbooks, Xero, Zendesk, HubSpot, or Salesforce.

By evaluating cloud ERP systems based on these criteria, we can gain insights into the diverse landscape and make informed decisions in the evolving world of digital transformation.

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1. Odoo:

Odoo is a cloud-native ERP system that specifically caters to small and medium-sized businesses. It was designed for the cloud from the ground up, resulting in a consistent user interface across all screens and modules. If a cloud-native experience is your top priority, Odoo should be on your list. However, it’s worth noting that out-of-the-box operational capabilities for organizations with revenues over $50 million may be limited.

Strengths:

  1. Designed for Global Companies: Odoo is well-suited for smaller companies with multiple entities in various countries, particularly in regions like Europe and South America.
  2. User Experience and Consistent Design: Expect an excellent user experience with consistent design patterns throughout the system.
  3. Open Source: Being an open-source platform, Odoo can help save costs on licensing. However, when considering factors like maintenance and hosting, the overall costs may be similar to comparable paid offerings.

Weaknesses:

  1. Limited Capabilities for Larger Organizations: Due to its open-source nature, there is a tendency for developers and IT departments to over-customize Odoo, leading to an inferior product experience despite its cutting-edge user experience.
  2. Limited Business Consulting Expertise: The ecosystem primarily consists of developers, lacking seasoned program managers, change management experts, and business consultants to effectively guide large-scale implementations.
  3. Limited Last Mile Capabilities: Odoo’s capabilities for specific micro-verticals may be limited, requiring significant customization to cater to specific industries.

Overall, Odoo is an excellent choice for startups with revenues under $50 million. To make the most of Odoo, it is advisable to engage a seasoned business consultant with experience in managing ERP implementations and integrations. However, it is important to avoid over-customization in order to achieve the best experience with the system.

2. Plex:

Plex is a cloud-native ERP system that primarily targets the automotive, food and beverage (F&B), and industrial manufacturing industries. It is a suitable choice if the manufacturing execution system (MES) experience is crucial for your organization. However, Plex may not be the best fit if you require deep ERP layers to achieve operational efficiencies through process step decoupling or if you have mixed-mode manufacturing requirements.

Strengths:

  1. Born in the Cloud: Plex was built from the ground up to deliver a cloud-native experience, providing a consistent design and architecture across screens and modules.
  2. Manufacturing and MES: Plex is specifically designed to meet the needs of automotive original equipment manufacturers (OEMs) and offers tailored supply chain and quality processes for specific micro-verticals.
  3. Automotive Capabilities: Plex includes pre-built compliance and quality capabilities aligned with Toyota and Ford requirements, but adapting similar capabilities to other automotive products may require substantial effort.

Weaknesses:

  1. Ecosystem: Plex implementations typically follow a hand-off approach, and the availability of consulting options may be limited due to a smaller install base.
  2. Limited Solution Focus: While Plex is well-suited for pure-play automotive companies, it may not be as suitable for businesses with diverse models, even within the manufacturing industry.
  3. Not Ideal for Companies Growing Through M&A: Plex may not be the best fit for companies involved in mergers, acquisitions, or carve-outs due to uncertainties surrounding future business models.

Overall, Plex is a great fit for pure-play companies within the Toyota and Ford ecosystems, with revenues ranging from $50 million to $1 billion. It is particularly suitable for businesses with a focus on traceability and supply chain management, such as those in the F&B industry. However, organizations with diverse business models should carefully evaluate how well Plex aligns with their current and future needs.

3. IFS:

IFS differentiates itself by targeting mid-to-large organizations with a strong emphasis on project and field service management, particularly in asset-heavy industries. It excels in providing best-of-breed field service and asset management capabilities, which can be utilized as standalone offerings or integrated with SAP or Oracle systems. However, it may not be the ideal choice for mixed-mode manufacturing companies or organizations undergoing frequent business model changes or engaged in M&A activities.

Strengths:

  1. User Experience and Interface: IFS offers a consistent user experience that has been rearchitected and modernized, comparable to born-in-the-cloud products.
  2. Best-of-Breed Field Service Capabilities: IFS enables efficient field service scheduling for large teams, with significant investments in resource optimization capabilities.
  3. Best-of-Breed Asset Management Capabilities: IFS provides robust asset management capabilities suitable for organizations with extensive asset and predictive maintenance requirements, such as maintenance, repair, and overhaul (MRO) organizations.

Weaknesses:

  1. Ecosystem: IFS may have limited presence in North America and a lean partner ecosystem compared to other providers.
  2. Limited Focus: Companies with diverse business models or those expecting significant changes in their models may outgrow or face challenges with IFS’ solution.
  3. Not the Best Fit for Companies Growing Through M&A: IFS may not be the optimal choice for companies involved in mergers, acquisitions, or private equity portfolios due to potential misalignment with evolving business models.

Overall, IFS is a great fit for companies operating in the MRO and airline ecosystems that require a cloud ERP system. It is also well-suited for organizations seeking best-of-breed asset management and field service capabilities. However, it is important to carefully evaluate and align IFS with your long-term process maps and operating plans to ensure it accommodates your evolving business model effectively.

4. Acumatica:

Acumatica is a cloud-native ERP system that specifically targets organizations in the distribution, construction, field services, and manufacturing industries. Its primary focus is on countries such as the US and the UK, catering to organizations with deeper operational needs rather than extensive global financial requirements. It is an ideal choice for companies with revenues ranging from $10 million to $100 million, but may not be the best fit for large global companies.

Strengths:

  1. One Product, Multiple Business Models: Acumatica stands out by offering support for multiple complex business models within a single package, spanning construction, manufacturing, and distribution.
  2. Consumption-based Pricing: The consumption-based pricing model is advantageous for companies that require ERP seats for customer and vendor collaboration, or for businesses with seasonal workers and low transaction volumes, such as construction-centric companies.
  3. Marketplace and Ecosystem: Acumatica boasts one of the most vibrant marketplaces and ecosystems, with quality development enforced through controlled procedures implemented by Acumatica.

Weaknesses:

  1. Globalization Capabilities: Acumatica requires hosting multiple instances in different countries, with limited collaboration between these entities. It may not be the best fit for global companies with significant collaboration needs.
  2. Ability to Handle Larger Workloads: Acumatica is primarily designed for SMBs and may not have the capacity to handle the workload of larger organizations.
  3. Not Suitable for Companies Growing Through M&A: Companies undergoing growth through mergers and acquisitions may require global capabilities and entity collaboration, making Acumatica less suitable for holding companies or those in private equity portfolios due to the constant evolution of business models through aggressive M&A cycles.

Overall, consider Acumatica if a cloud-native experience is a priority for you, even if it means sacrificing deeper operational and global capabilities.

5. Microsoft Dynamics 365:

Business Central Microsoft Dynamics 365 Business Central is a fully rearchitected cloud ERP system that specifically targets SMB companies with significant financial needs, professional services automation (PSA), and fast-moving consumer goods (FMCG) distribution. It is an ideal choice for global SMBs with a presence in multiple countries. However, it may not be the best fit for companies in industrial distribution and manufacturing verticals that require complex operational capabilities beyond the native features provided by MS Dynamics 365 Business Central.

Strengths:

  1. Designed for Global Companies: Microsoft Dynamics 365 Business Central inherently supports global regions and localizations, making it an excellent fit for countries where other suite-centric solutions might be absent, such as Acumatica, Epicor, or Infor.
  2. Deep Supply Chain Capabilities for Complex Distribution and Retail Organizations: The data model of MS Dynamics 365 Business Central is well-suited for FMCG and distribution companies that require native support for advanced features like bin tracking or license plate support.
  3. Ideal for Diverse Companies Growing Through M&A: The global nature of the system and the available marketplace options make it an ideal choice for companies experiencing growth through mergers and acquisitions, regardless of whether they are vertically integrating or expanding globally.

Weaknesses:

  1. Limited Last Mile Capabilities: The native last-mile capabilities of MS Dynamics 365 Business Central may be insufficient for industries such as industrial manufacturing or distribution.
  2. Technical Focus and Limited Business Consulting Expertise of the Microsoft Ecosystem: The ecosystem surrounding Microsoft Dynamics 365 Business Central primarily consists of technical companies, with limited experience in business consulting. This may result in over-customization and overengineering of Microsoft products, leading to implementation failures.
  3. Limited Microsoft Support for Smaller Partners: Unlike other ERP companies, Microsoft does not provide support or control to its smaller partners, which can sometimes lead to implementation issues due to a lack of channel control.

Overall, consider Microsoft Dynamics 365 Business Central if you require robust global financial capabilities and access to a vibrant marketplace of developers.

6. Microsoft Dynamics 365 Finance & Operations:

Microsoft Dynamics 365 Finance & Operations is a robust cloud solution that excels in supporting various business models within a single software platform. It is particularly suitable for large global companies that do not require additional add-ons, thanks to its integrated Warehouse Management System (WMS) and Transportation Management System (TMS) capabilities. However, it may not be the best fit for smaller companies with revenues under $250 million that are outgrowing systems like QuickBooks or other smaller ERP solutions.

Strengths:

  1. Designed for Large Organizations: Microsoft Dynamics 365 Finance & Operations is an ideal choice for large global companies with complex business models operating in multiple countries, offering a unified system for all operations.
  2. Embedded WMS and TMS Processes: The inclusion of embedded WMS and TMS processes is beneficial for companies that require end-to-end traceability even after goods leave the dock.
  3. Mixed-mode Manufacturing Capabilities: This solution supports multiple business models within the same platform, including process, discrete, and professional services automation (PSA) manufacturing.

Weaknesses:

  1. May not be the Best Fit for Publicly-traded Companies: The traceability requirements for publicly-traded companies may not be as intuitive compared to ERP solutions designed from a CFO perspective.
  2. Ability to Handle Fortune 500 MRP Runs: Microsoft Dynamics 365 Finance & Operations may not be the most suitable option for handling the transactional workload and Material Requirements Planning (MRP) runs of Fortune 500 companies due to the significant processing requirements.
  3. Overwhelming for Smaller Organizations: Companies with revenues under $250 million or those outgrowing smaller ERP or accounting systems like QuickBooks may find it challenging to adapt to the data modeling and translation expertise required for successful implementation.

Overall, consider Microsoft Dynamics 365 Finance & Operations if you have a globally diverse business model and aim to consolidate disparate business models and entities into one solution.

7. Oracle Cloud ERP:

Oracle Cloud ERP is targeted towards large publicly traded organizations seeking comprehensive global financial capabilities. It is particularly suitable for large service-centric organizations looking for robust finance capabilities in a best-of-breed setting. However, it may not be the best fit for smaller product-centric companies that are outgrowing smaller ERP or accounting systems.

Strengths:

  1. Designed for Large Service Organizations: The embedded Human Capital Management (HCM), Customer Relationship Management (CRM), and Configure, Price, Quote (CPQ) processes are well-suited for large service-centric organizations with leaner inventory and operational needs. The procure-to-pay (P2P) workflows are favorable for indirect procurement organizations.
  2. Embedded WMS and TMS Processes: Oracle Cloud ERP includes embedded Warehouse Management System (WMS) and Transportation Management System (TMS) processes, benefiting logistics, healthcare-centric, and other service-centric organizations with streamlined inventory management.
  3. Designed for Large, Regulated Industries: The product architecture of Oracle Cloud ERP supports the complex financial processes of large organizations in regulated industries, offering deep sub-ledger hierarchies, subsidiary-level book closures, and user-defined books for branch, fund, partnership accounting, and more.

Weaknesses:

  1. Limited Capabilities for Product-centric Companies: The P2P processes, CPQ, and manufacturing capabilities may not be the most suitable for product-centric organizations that require features like Manufacturing Execution Systems (MES), Product Lifecycle Management (PLM), and Sales and Operations Planning (S&OP) processes.
  2. Ability to Handle Fortune 500 MRP Runs: The workflows in Oracle Cloud ERP are better suited for service-centric organizations, where the MRP layers may not be as complex. However, the solution might struggle with the intricate MRP runs involving millions of costing, scheduling, and work-in-progress (WIP) entries.
  3. Overwhelming for Smaller Organizations: The data model and translation requirements of Oracle Cloud ERP may be too overwhelming for companies outgrowing QuickBooks or other smaller ERP systems.

Overall, consider Oracle Cloud ERP if you are a large, global service-centric organization or if you primarily require financial and procurement capabilities with an integrated HCM tailored for service-centric industries.

8. SAP S/4 HANA Cloud:

SAP S/4 HANA Cloud is targeted towards large product-centric organizations with complex product models and Material Requirements Planning (MRP) runs. It is best suited for large global companies aiming to host all their entities within a single system. However, it may not be the ideal choice for companies outgrowing smaller ERP systems or QuickBooks, as implementing the solution requires a certain level of IT maturity.

Strengths:

  1. HANA Power: SAP S/4 HANA Cloud leverages the power of HANA, enabling it to handle complex MRP runs with millions of serial numbers, SKUs, and processing millions of costing and scheduling entries much faster than most ERP systems.
  2. Best-of-Breed Capabilities Pre-integrated: The solution comes pre-integrated with best-of-breed software such as SAP Commerce Cloud, Hybris, Concur, SuccessFactors, and Extended Warehouse Management (EWM), offering potential cost savings through seamless integration.
  3. Financial Traceability for Large, Global Organizations: SAP S/4 HANA Cloud provides end-to-end traceability of SOX compliance workflows, which is crucial for large complex financial organizations.

Weaknesses:

  1. Limited Last-mile Capabilities: The pre-built last-mile capabilities specific to micro-industries may be limited, potentially requiring custom development or add-ons on top of the core solution.
  2. Limited Cloud Version Capabilities and Marketplace Options: The cloud version of SAP S/4 HANA is not as advanced in terms of development compared to the on-premises variant. Additionally, the available marketplace options are limited compared to other competing solutions and vendors.
  3. Overwhelming for Smaller Organizations: The data model of SAP S/4 HANA Cloud is designed for large, complex organizations and may prove overwhelming for smaller companies outgrowing QuickBooks or smaller ERP systems.

Overall, consider SAP S/4 HANA Cloud if you are a large product-centric organization or a publicly traded organization seeking to consolidate all your global subsidiaries within a single system.

9. NetSuite:

NetSuite is designed for small and medium-sized businesses (SMBs) operating in multiple countries, focusing on service or commerce. It is an excellent choice for organizations with diverse business models that require a global financial ledger and robust CRM workflows. However, it may not be the most suitable option for industrial distribution or manufacturing.

Strengths:

  1. Supports Both Product and Service-centric Companies: NetSuite offers a robust financial ledger, CRM, and Professional Services Automation (PSA) capabilities, making it suitable for commerce-centric organizations with inventory needs.
  2. Marketplace and Ecosystem: NetSuite boasts a vibrant marketplace and ecosystem with numerous pre-built integrations and add-ons available.
  3. Ideal for Global Companies Growing Through M&A: NetSuite is well-equipped to support diverse global business models out of the box, making it an ideal choice for companies in the private equity portfolio or those experiencing growth through mergers and acquisitions.

Weaknesses:

  1. Patchy User Experience: While NetSuite is a cloud-native solution, its user experience may not be as modern as alternatives like Acumatica or Sage Intacct, making it less appealing for companies seeking a solution known for its user experience and cloud-native features.
  2. Not Friendly for B2C, Unified Commerce, and Omnichannel Experience: NetSuite may encounter performance issues when handling large volumes of B2C customer records and transactions that are integral to commerce or order management system (OMS) operations.
  3. Limited Manufacturing Capabilities: NetSuite’s Bill of Materials (BOM) and Material Requirements Planning (MRP) capabilities are limited and not well-suited for the complex workflows typically found in industrial manufacturing with busy shop floors.

Overall, consider NetSuite if you are an SMB organization focused on services or commerce, particularly if you require global capabilities. It is also a great choice for companies experiencing growth through acquisitions or those owned by private equity.

10. Sage Intacct:

Sage Intacct caters to service-centric organizations such as non-profits, healthcare, financial services, software, and technology-centric companies. It is an ideal solution for companies seeking comprehensive capabilities in contract compliance, ASC606, and subscription-based models. However, it may not be the best fit for inventory-centric organizations.

Strengths:

  1. Deep Subscription-centric Capabilities: Sage Intacct offers robust features for subscription-based models, including ASC606 compliance, revenue recognition, payment terms at the contract line item level, intercompany accounting, and multi-element allocation.
  2. Globalized and Localized in Over 120 Countries: Sage Intacct provides native support for multi-entity collaboration across more than 120 countries.
  3. Built and Owned Integrations: Integrations with Brightpearl, Procore, and Salesforce are developed and maintained by Sage, ensuring the quality of integration and seamless functionality.

Weaknesses:

  1. Manufacturing and Industrial Distribution Capabilities: Sage Intacct may not be suitable for companies with diverse business models, such as tech companies with manufacturing or distribution requirements.
  2. Limited Supply Chain and CRM Capabilities: While it excels as an accounting solution, Sage Intacct lacks CRM capabilities and has limited supply chain features, including indirect procurement. Non-profit and healthcare organizations needing inventory and warehouse capabilities may encounter challenges with the solution.
  3. Complex Implementation: Implementing integrations with Brightpearl, Procore, and Salesforce involves multiple parties, increasing the risk of implementation failure.

Overall, consider Sage Intacct if you are a service-centric organization operating in non-profit, SaaS, healthcare, or financial services sectors.

In conclusion, understanding the specific strengths and weaknesses of each cloud system will help you make an informed decision based on your organization’s needs. Whether cloud-native features are important to you or not, considering the variables and ranking them according to your requirements is crucial. This list serves as a valuable starting point in your evaluation of cloud-based solutions.

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