ERP Buyers Guide

ERP systems primarily differ based on Price, Scalability, technical and functional capabilities

ERP software, like most other products, is built with a target business in mind. (Size of business, business profile, industry type...)

The industry offers up several definitions of the ERP software market predominately segmented on company size (Revenue) and employee numbers. The tiers, starting at the bottom, (Tier 4) are for start-ups and small businesses, Tier 3 SMBs small to medium sized businesses roughly in the $5 M - $50 M turnover range; Tier 2 SMEs small to medium sized enterprises $50 M - $1.5 B and then Tier 1 global enterprises at the top of the industry pyramid. The revenue ranges should be used as guidelines only.

Some buyers will sit on the boarder between ERP tiers making their ERP selection decision more difficult, others will be clear cut often due to affordability as the overall required investment at each tier does differ.

Entry Level Software

Most entry level accounting systems are technically limited from scaling past a small number of system users and they may also have database volume limitations. User interfaces don't support viewing and searching large volumes of transactions & records Further to this, entry level systems offer a fixed / rigid system designed for small businesses who may not have a qualified accountant or bookeeper on staff. The systems are easy to use but inflexible.

SMBs & SMEs

As we progress up the tiers the ERP software becomes more flexible and capable of meeting a wider range of business processes. They typically cover more business scenarios than the previous tier of software and often support on platform customizations. Some SME systems natively cater for enterprises operating in multiple jurisdictions with multi legal entities.

Whilst it's true that some ERP systems can be tailored to fit into a tier, they weren't necessarily designed to cater for we have seen this back-fire. Implementation firms generally are not versed in working in a tier below or above their normal software segment

Most ERP software can't move up to a tier above their designed tier but that does not stop some vendors from trying. If product limitations don't get you the lack of implementation experience to service a larger sized business will.

There are several supplier behaviours to be aware of that if ignored can cost you dearly.

• Investment low balling to win your business
  • Too few licenses, the wrong license mix, insufficient project budget, under resourced infrastructure and an unrealistic
    project timeline equals a bigger, unexpected investment. Exiting a project mid project isn't typically possible or affordable for a buyer so a clear understanding of what you are getting for your money is essential..
• Unrealistic Project Assignments
  • We call this the art of allocating project tasks to clients knowing full well they are highly unlikely to be able to complete the tasks.
• Fixed Fee Project Investment offer
  • My favourite, a fixed fee that isn't tied to outcomes. What's covered isn't ever defined fully leading to dispute.
  • You pay extra when the time runs out,
  • They haven’t accounted for all the project elements so you’ll pay extra for inevitable project changes
• Over simplification
  • Everything is easy. Our system is magically far easier to configure and deliver than all the other products in the same market segment and therefor faster and less expensive & it covers all the complex scenarios in your business.
  • Our system is a breeze to learn
  • Our templated company for your industry speeds up project delivery but we reduce the value the system would otherwise deliver as a tailored solution reducing your ROI.
• Cutting corners
  • No or little documentation especially concerning technical developments and integrations.
    • No test environment
    • Minimal Project Management
    • No change Management
    • No Steering Committee
    • Unlicensed software
• Deliberate contractual ambiguity

Project killers and causes can concurrently reside with supplier and buyer.

Buyers

• Ignoring the need for change management
• Not completing assigned tasks on time leading to cascading delays, rework and extra costs
• Jeopardizing a business-as-usual state by under resourcing the project
• Appointing a project manager who doesn't possess the authority to direct staff
• Setting an unrealistic timeline to go live.
• Under-estimating the time required for staff to absorb new business processes, new software and new responsibilities.
• Taking on project tasks to cut costs but not being in a position to deliver on the assigned project tasks.
• Requiring rework where the original specification of SOW wasn't fully considered by the buyer when the opportunity originally existed
• Choosing the wrong software and or the wrong implementation partner in the first instance
• Supplying inaccurate data (Garbage in Garbage out)

Implementation Suppliers

• Over promising & under delivering
• Not setting up a Steering committee
• Taking project shortcuts (documentation, SOW, RICEFW, RACI...)
• No or insufficient supplier-side project management
• Insufficient explanation concerning the suppliers approach to delivering a project, at the start of the project
• Informing clients after the fact rather than providing timely advice or requesting a project change
• Not implementing a change management process

Project timelines and resourcing

Tier 2 & 3 ERP projects contain a myriad of tasks, many with dependencies, which together help determine how much time is required to deliver an ERP project and the timeline for doing so. Project tasks are split between supplier and buyer with each party’s resource demand differing throughout the project.

The typical buyer resource allocation consists of a project manager and team and subject matter experts who will be called upon for specific inputs typically during the project requirements gathering phase and the solution design phase.

Of course, a business should never jeopardize their business-as-usual state due to competing project attentions. Unless extra staff are brought in or reassigned, existing staff working in the project need adequate time to complete their project tasks and their day-to-day responsibilities, and this should be reflected in the project plan.

Delays in a buyer’s completion of assigned tasks can hold up a project and lead to a need to push out the cutover date. Matters such as annual leave, competing priorities, scope creep and resignations can impact the project timeline and go live target date.

Rushing or squeezing the project into a crammed timeline won’t necessarily reduce the investment fee but it is likely to jeopardize the outcome.

Mature businesses demand advanced ERP system solutions some of which are difficult to price to the cent. Certain project tasks are most adequately dealt with by the supplier offering a from and to range. Close project management will quickly establish the adequacy of the estimate and will afford both parties to review the previously agreed approach & solution.

• Communicate with project team members and all other stakeholders regularly
• Co-ordinate the involvement of 3rd party suppliers to the project.
• Be flexible around changing conditions
• Appoint a project sponsor and meet with them as and when required.
• Budget for Steering Committee meetings
• Anticipate passive and active pushback from some staff and plan accordingly (Change management)
• Adopt the train the trainer approach as it produces the best project outcomes.
• Ensure system users receive the appropriate level of training that will make them most effective
• Staff with little or no report writing and Bi experience aren’t likely to successfully learn a new application(s) and then create custom reports and dashboards in the timeframe usually available in an ERP project. Budget accordingly
• Allow ample time for User Acceptance Testing (UAT). A comprehensive UAT is paramount to a successful go live position.
• Empower your staff to make a positive contribution to the project.
• Capitalize on staff skills relating to project tasks
• Don’t take on tasks best delivered by suppliers
• Allocate time to communicate with stakeholders
• Be cognoscente of competing staff demands & staff availability when planning
• Don’t leave it up to the supplier. ERP projects are a shared experience

CitySoft’s starting point is that every business has their own unique set of investment objectives and reasons behind investing in a new advanced business software system (ERP) and ultimately every business wants to experience demonstratable and measurable business benefits from their investment in software & our professional services.

CitySoft’s value proposition to companies who choose one of the ERP products CitySoft specialize in are

• More extensive use of the chosen business systems capabilities leading to companies getting far greater value from their software investment.
• Smarter configuration of a products options to better serve the interests of the business. Our business analysts and product experts combine to satisfy both business and operational demands of the business and not one at the expense of the other.
• The presentation of alternative ways of doing things and improved business processes utilizing system capabilities that may not have been available in the system that is being replaced. We challenge the way a business has operated in the past, often due to limitations present in the business software being replaced and provide avenues to embrace and benefit from a digital transformation.
• A less confrontational change management process that yields greater staff engagement. Our empathy for staff impacted by the business changes and our ability to support managements business decisions results in high levels of system adoption.

Our experience and our approach produce the fastest route for you to start benefiting from your new ERP system 

• Shortlisting more than three products. Seeing too many products amplifies the complexity of selecting one product.
• As a guide, identify your must have vendor attributes; product features and product technologies (Deployment), and licensing model.
• Be aware  that just because a feature is on a vendors roadmap doesn't gaurantee it will ever be incorporated into the standard product or offered as an option.
• Consider the risks with a direct vendor relationship
• Understand who owns your data and how you can retrieve it 
• Share your key presentation requirements in advance of each presentation can help presenters focus on the things that matter to you
• Try and avoid the never ending presentation. The products these days are all merchanable quality so it becomes a case of look and feel and each products ability to meet your particular needs. (Solution practicality, no solution, a work-around or standard capability with set up).
• Be prepared to accept that not everything you want can be demonstrated. Understanding the proposed solution and gaining commitment for its delivery then become pivotal

Great software poorly implemented and poorly supported by vendors or implementation partners will fail to deliver you the investment and business outcomes you expected to obtain.

Considerations when it comes to selecting an implementation partner include:

• Some vendors aren’t particularly selective when it comes to appointing new partners to their ranks. It tends to be all about software sales not project success.
• Not all implementation partners are equal. There is often a large difference amongst service providers when it comes to service capabilities, experience and project approach.
• There is no substitute for real project experience, a proven project delivery model and success with companies and projects similar in size, complexity and scale to your business and project.
• Different sized projects demand different disciplines and processes that not every implementation is suited to fulfilling
• Where to if a project fails and it's a direct vendor relationship
• Where is support delivered from and by whom
• A clear demonstration of a project implementation model and the intention to follow it when delivering your project

SAP Business One v Sage X3 ERP

Target Market

SAP Business One is purpose built for small to mid-sized businesses and subsidiaries (Lower mid-market fit) whereas Sage X3 is position for mid-sized to upper mid-market enterprises with more complex business requirements.

The key comparison metric is business complexity. With business growth comes business complexity. Companies in the lower mid-market typically have fewer, less complex business processes to deal with than upper-mid-market enterprises.

Sage X3 ERP is a strong vertical fit for manufacturers, especially process manufacturers, and distributors.

SAP Business One core capabilities including light manufacturing can be extended by adding Boyum’s ISV best of breed manufacturing and distribution products. The inclusion of these products can push a SAP Business One solution beyond its traditional lower-mid-market positioning.

Comparison pdf

The multi’s

Sage X3 ERP is particularly well suited to enterprises who operate multiple entities who may or may not trade amongst each other whereas SAP Business One was built around a single company per database. SAP introduced the concept of branches into SAP Business One, however inter-company and consolidations are an afterthought for SAP Business One and consequently the system isn’t close to the functionality and capabilities available in Sage X3 ERP.

Technologies

Sage X3 ERP is positioned as an ERP development platform. It offers clients a powerful integration toolkit. It uses GraphQL, REST, SOAP template services and developer tooling through Sage X3 Builder. It also offers loads of APIs, import/export templates, GraphQL extensions, Custom mobile automations and partner add Ons to tailor Sage X3 ERP to meet the most specific requirements of a mid-market & upper mid-market enterprise.

SAP Business One is progressing towards Web client expansion & analytics, eInvoicing and Microsoft 365 and Teams Integration.

CRM

SAP Business One includes best of suite CRM capabilities whilst Sage X3 ERPs CRM is functional without any standout characteristics. Both systems offer integrations to best of breed CRMs and marketing automation tools such as MailChimp. The Sage X3 ERP roadmap for 2026-2027 includes a major update of the products’ standard CRM capabilities.

Sage Intacct v SAP Business One

Positioning

Sage Intacct is best positioned as a Finance platform. Sage Intacct is heavily invested in finance Ai, close automation, AP automation, cash intelligence and financial data access. Sage Intacct suits service-based businesses, the not for profit & non-profit sectors, financial services providers, healthcare providers, SaaS & subscription-based companies, hospitality and by virtue of the solution created by CitySoft, the retail sector.

Product Scope

If you are a lower-mid-market company after an ERP solution and not just a finance platform CitySoft recommends SAP Business One over Sage Intacct.

Whilst Sage Intacct includes inventory and operational modules its relative strengths compared to SAP Business One reside in the products finance layer.

SAPs built in best of suite CRM is simpler to manage than the Sage Intacct solution which involves use of a Sage developed connector to Salesforce or other leading 3^rd party CRMs.

ROI 

There are two key metrics for evaluating the financial impact from an investment in advanced business software (ERP software). The two factors are Total Cost of Ownership (TCO) & Return on Investment ROI. In this article we look at ROI.

ROI measures the business value generated by the new ERP system relative to cost. Value is often measured through improvements in both the efficiency and effectiveness of system users in furthering the goals of the business and increasingly the improvement in the quality of information generated by the ERP system or via a separate Ai system. Ai capabilities are being built directly in many ERP systems and ERP-Bi[1] systems.

TCO focuses on the costs to acquire and maintain the ERP system. Acquisition and on-going costs typically consist of subscription or annual maintenance fees, a one-off license purchase, Cloud hosting fees either shown separately or built into the subscription fee, infrastructure fees, the one-off project fees and then your on-going support spend. The mix of upfront and on-going fees will be influenced by the license and deployment options.

TCO doesn’t consider investment value.

System-wide ROI

The strength of an ERP system’s ROI will be influenced by the breadth and depth of timesaving measures it introduces that positively impact a significant number of systems users on a regular basis.

In general terms these benefits can be both measurable and less tangible yet still of great value to the business.

A combination of streamlined business processes, automation, integrations, alerts and controls typically lead to less overtime, less time dealing with avoidable transactional data errors, higher quality data and the ability for fewer people to manage the business demands or the same workforce comfortably taking on more work.

Staff retention rates at companies using quality modern ERP software typically outstrip businesses using old, tired software that requires workarounds, compromises, & manual interventions to operate.

Accounts

ERP tools that

• Reduce the cost of debtor collections
• Streamline accounts payable processes such as P2P automation tools and
• Maximize creditor discount take up

will make a valuable contribution to your ROI. They also stand to improve your working capital demands.

Inventory-Purchasing & Sales ROI

There are real measurable business benefits from using ERP software that supports optimized stock management. The benefits range from

• Reduced holding costs, think 3^rd party temporary warehousing to accommodate excess stock,
• Improved cashflow through accurate and timely purchasing that does not diminish deliveries in full and on time (DIFOT)
• Lower sales order processing cost often due to the introduction of customer self-service, mobile sales apps and more effective picking & packing.

A new ERP system can in part be justified if it helps you improve inventory turns and supports faster cycle times from order to shipment

Manufacturing

The relative strength of a ROI from introducing Integrated ERP systems for manufacturers comes from the ability of the software to optimize plant and equipment utilization through smart scheduling, planned plant and equipment maintenance, flexibility in scheduling and the speed of responding to unexpected situations.

MRP and MPS capabilities also help optimize the timing and accuracy of purchase orders and optimized stock holdings.

 Integrations, Automations

ERPs that support configurable automated business processes, with or without interventions, and systems designed to integrate with other Cloud software systems not only cut one off system establishment fees they’ll rapidly provide companies with an excellent ROI. The costs of integrating older systems far out -weights the cost of connecting modern software systems.

The importance of these system capabilities with respect to ROI highlights the importance of choosing an ERP built using modern technologies.

The types of ERP extensions adding business value

These days, the best business system solutions are built around an ERP system with supporting systems designed to address specific business processes outside the domain of the ERP. Some of these business areas include -

• Online eCommerce systems
• Traditional Retail POS
• Computerized maintenance management software (CMMS)
• Product lifecycle management (PLM)
• Field Service Management (FSM)
• Management execution systems (MES)
• Bi
• AI
• Optimized equipment effectiveness (OEE)
• Inventory optimization
• Advanced warehousing systems (WMS)
• Rostering, Time keeping & HR
• CRM
• Payroll

Your new ERP system ROI will be impacted by the level of automation between best of breed applications and their connection to a central ERP system remembering that the real value of technology is achieved by maximizing the benefits from it.

 

[1] Bi – Business Intelligence software