MUFI Rating & Risk – ERPNext

MUFI Rating & Risk – ERPNext

MUFI: Maintainability, Usability, Functionality, Implement ability

Vendor: ERPNext (Select For Vendor Profile)

Introduction

ERPNext is a young and up and coming ERP system which is primarily delivered through SaaS. ERPNext is easily the value leader in the ERP space – which of course does not mean that it is the best ERP system for every situation – but if ERPNext can meet a buyer’s business requirements, it offers a tremendous value as is explained in our TCO calculator for ERPNext.

Application Detail

ERPNext is an open source ERP software vendor. ERPNext truly stands out in term of usability and the potential for very high adoption rates. Of all the ERP systems that we have evaluated, ERPNext has the best user interface and is one of the few user interfaces that actually show the user where they are in the process. If working in SAP ECC is the type of experience that can make one hate their job, ERPNext has the type of user interface where its hard to tell you are working. ERPNext has won some open source awards, but we hope they win one in the future for both user interface design as well as configuration design. Some of the specific features of these areas of the application we believe are unique to ERPNext.

This company offers SaaS and service, full support/onboarding help, up to 10GB storage space and regular updates for roughly $600 per year. ERPNext could not do this unless they had built an extremely low maintenance application, and we predict this price will increase as ERPNext becomes better known. In fact, if we were advising ERPNext, we would probably tell them to increase the price, for two reasons. One is that very inexpensive software vendors tend not to be taken seriously, and considering the outstanding job that ERPNext has done in developing their application they deserve more money. Of course, if ERPNext keeps their price low, they could very quickly get hot and become a go-to application for small companies that are price sensitive. Smaller companies tend to purchase ERPNext hosting, so the “unlimited” aspect of service General Motors or Coke Cola has not yet been tested.

This is an ERP system that even smallest company can afford. It also has probably the most clearly written ERP user manual we have ever read. While inexpensive, ERPNext has the feel of a quality application, in fact, a level of quality that many far more expensive applications with much more business press coverage cannot match. ERPNext is also quite intuitive to use – in fact, we rate it as the best user interface in the ERP software category – that is of any ERP system, tier 1, 2 or 3. It also has some features we would like to point out. One of these is how ERPNext has several ways to navigate around the application to perform tasks.

ERPNext DashBoard

The first way is to simply use the dashboard. ERPNext has a simple and attractive dashboard, which will then take the user where they need to go. This is quite common, and several open source ERP applications have the same thing.

However, ERPNext has something we have not seen before in any application. With most ERP applications, you must navigate to a specific area before doing anything. In SAP ERP this is accomplished with typing in a transaction – which is a four digit alphanumeric code such as SE16. I have a list of transaction codes for SAP APO at this link.

http://www.scmfocus.com/sapplanning/trans-codes/

ERP systems have a lot of functionality, and traditionally one of the major weaknesses of ERP applications has been the difficulty in navigating to the area that is required efficiently. ERPNext allows a way for any transaction of the master data element to be accessed from a single drop down. This is called the “New” button and can be accessed from any area in the application by selecting the File menu item and then the New button. This is demonstrated in the following screen shot.

ERPNext New

When selected a long scrollable list appears. This addresses one of the main weaknesses of ERP systems, in that they are difficult to navigate. This one feature makes ERPNext one of the best ERP systems regarding navigation because any adjustment to the system is just two mouse clicks away from any screen the user is currently within. As a person who has spent many years navigating through ERP systems the “old bad” way, this approach is a revelation. And this is not the end of how ERPNext has improved ERP navigation as the next screenshot will show.

ERPNext Bookmarks

ERPNext has included two innovations in its bookmarks. In SAP ERP, one can create a bookmark for a specific transaction, but then the details of that transaction must be entered. This means the details must be written down or remembered, or there is some search that must take place before the correct record can be returned. ERPNext not only places the Bookmark function on the main menu – meaning it can be accessed from any screen without going back to the introductory menu screen, but the ERPNext Bookmark function can be used to go to not only the transaction, but also to the specific record in the transaction. In fact, notice that the general transaction of “New Purchase Order 1,” which is the general transaction for creating a new purchase order, is in the same Bookmark menu as “PO00001,” which is a specific purchase order that just created. This means that the user does not have to write down or remember their previous transactions. This is another major boon to navigation efficiency, and is a best practice for any application, but is in particular well suited to an ERP system, which requires a great deal of navigation for both making change as well as checking the status of transactions. 

ERPNext Find

We can stay in the same purchase order transaction to demonstrate another excellent ERPNext feature, which is the Find function. Here I need to find a supplier to assign to a new purchase order. I can see the current database of suppliers by selecting the magnifying glass icon to the right of the input box, and can then search by various characteristics. Here I am searching by the Supplier Name. There is currently only one supplier setup in the system, called XYZ Supplier so that I will select this for my new purchase order. However, if I had a long list of suppliers, I could restrict the list by simply typing in the first several letters of the supplier name, or choose another characteristic of the supplier, and also type in the first few letters of that characteristic. List filtering like this is one of the most important features the controls the productivity of an ERP user. Too many ERP systems require that the user scrolls through lists of various master data when quick filtering like this is greatly preferable. Most ERP systems have search or find functions, which work similarly, but ERPNext search works extremely smoothly. This feature, along with the navigation features I have described up to this point are indicative that ERPNext would have a high productivity level and a far better productivity level than any ERP software from the big ERP software vendors.

ERPNext Options

ERPNext provides application intelligence to the user by proving the options, which are available in a clear way. In the new purchase order transaction, the following options are shown at the top of the screen: From Material Request, From Supplier Quotation, For Supplier. This means that the user does not have to remember or guess exactly all the ways that a purchase order can be created, but instead is told right within the transaction, a this is a consistent feature of ERPNext for all of its transactions.

There is enormous productivity implications for software that naturally works, and software that ostensibly has some search functionality, but for which the actual usability of the functionality is low. This is one of the most important misunderstood features of software selection, which similar functionality on paper often has great differences in productivity in actual usage. 

ERPNext along with OpenERP are two of the easiest ERP systems to implement. Neither are implemented by the major consulting companies, and much of the consulting hours are remote, and intermittent greatly reducing the costs.

ERPNext is one of the most intriguing applications in the enterprise software space. The only fault we can find with the application is the broadness of its functionality, but even at is current functionality it is one of the best values in enterprise software. Right now it is mostly suitable for small to smaller medium-sized companies, but with ERPNext’s high developer productivity, we would not be surprised if ERPNext can easily handle the mid-sized market. It is worth a very serious look. Even buyers that do not choose ERPNext should be evaluated ERPNext to see the most usable ERP system that currently exists.

MUFI Scores

All scores out of a possible 10.

Vendor and Application Risk

ERPNext is either the simplest or one of the top two simplest ERP applications to implementation to implement. Its exceptional user interface and configuration mean that it takes little specialization to implement the software. For that with experience with Quickbooks OnLine – it has a similar feel regarding how it is setup. ERPNext can only afford to offer support and hosting for ERP system because the application is as close as it gets to self-service.

Likelihood of Implementation Success

This accounts for both the application and vendor-specific risk. In our formula, the total implementation risk is application + vendor + buyer risk. The buyer specific risk could increase or decrease this overall likelihood and adjust the values that you see below.

Risk Definition

See this link for more on our categorizations of risk. We also offer a Buyer Specific Risk Estimation as a service for those that want a comprehensive analysis.

Finished With Your Analysis?

To go back to the Software Selection Package page for the Small and Medium ERP software category. Or goto this link to see other analytical products for ERP Next.

Honest Vendor Ratings – ERPNext

Introduction

The application ERPNext is produced by the company Web Notes Technologies, however, as they do not market under this name, we simply refer to both the company and the application as ERPNext.

ERPNext is one of the few software vendors that we cover that is not based in the US. ERPNext is based in India. The company that makes ERPNext began as a custom development company until they hit upon the idea of offering an ERP system. ERPNext’s objective is to continue to build applications for small businesses. ERPNext is still little known but has won numerous awards as offering a best open source application.

Quality of Information Provided

The quality of information provided by ERPNext is of good quality. They certainly do not have the large sales quotas that are a plague at many software vendors. Numerous interactions and observations have lead us to conclude that ERPNext does not have the normal propaganda apparatus that is so common in software vendors. In truth, currently, it’s debatable if ERPNext even has a single person who focuses on marketing. They do some marketing, but not the type of marketing that is the norm for a software vendor. They get most of their business through the web. They are simply not outfitted to provide a great deal of false information to their prospects. We also found their user manual to be quite accurate and quite well written.

Consulting and Support

ERPNext is not implemented by the major consulting companies, greatly speeding the implementation of ERPNext. ERPNext is one of the fastest if not the fastest implementing ERP systems that is available. Yes, their application is much more simple than larger ERP systems, but the difference is not as large as one would expect.

We have found support to be responsive, and ERPNext knows their application very well.

Internal Efficiency

ERPNext has good management and is still quite small. Therefore its internal efficiency is naturally high.

Innovation

ERPNext has built one of the most efficient ERP systems that we have tested.

ERPNext is one of the top innovators in the ERP space. They have made important contributions to ERP usability, and we consider them the leader in this area. We predict more innovation from ERPNext in the future.

Vendor Scores

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Software Selection Package for Small to Medium ERP

Software Selection

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Enterprise Software TCO Calculator – ERPNext

How it Works

Fill out the form below for a your customized TCO calculation, as well as each of the supporting cost components that make up the TCO. The form does not have a “beginning or end.” The form is constantly calculating, so feel free to make constant changes and the application will auto-adjust.

Details

  • Vendor Name: Web Notes (but far better known as ERPNext) (See for Vendor Rating)
  • Software Category: Small to Medium ERP.
  • Company Headquarters: D/324 Neelkanth Business Park, Vidyavihar West, Mumbai 400086
  • Site: http://www.erpnext.com
  • Delivery Mechanism: SaaS or OnPremises (but primarily sold as SaaS)

Finished With Your Analysis?

Once complete, goto this link to see other analytical products for ERPNext.

Project Planning Package – ERPNext

How it Works

Fill out the form below for your project planning estimate. The form does not have a “beginning or end.” The form is constantly calculating, so feel free to make constant changes and the application will auto-adjust.

Details

  • Vendor Name: Web Notes (but far better known as ERPNext) (See for Vendor Rating)
  • Software Category: Small to Medium ERP.
  • Company Headquarters: D/324 Neelkanth Business Park, Vidyavihar West, Mumbai 400086
  • Site: http://www.erpnext.com
  • Delivery Mechanism: SaaS or OnPremises (but primarily sold as SaaS)

Finished With Your Analysis?

Once complete, go to this link to see other analytical products for ERPNext.

References

Risk Book

Software RiskRethinking Enterprise Software Risk: Controlling the Main Risk Factors on IT Projects

Better Managing Software Risk

The software implementation is risky business and success is not a certainty. But you can reduce risk with the strategies in this book. Undertaking software selection and implementation without approximating the project’s risk is a poor way to make decisions about either projects or software. But that’s the way many companies do business, even though 50 percent of IT implementations are deemed failures.

Finding What Works and What Doesn’t

In this book, you will review the strategies commonly used by most companies for mitigating software project risk–and learn why these plans don’t work–and then acquire practical and realistic strategies that will help you to maximize success on your software implementation.

Chapters

Chapter 1: Introduction
Chapter 2: Enterprise Software Risk Management
Chapter 3: The Basics of Enterprise Software Risk Management
Chapter 4: Understanding the Enterprise Software Market
Chapter 5: Software Sell-ability versus Implementability
Chapter 6: Selecting the Right IT Consultant
Chapter 7: How to Use the Reports of Analysts Like Gartner
Chapter 8: How to Interpret Vendor-Provided Information to Reduce Project Risk
Chapter 9: Evaluating Implementation Preparedness
Chapter 10: Using TCO for Decision Making
Chapter 11: The Software Decisions’ Risk Component Model

Software Category Analysis – Small to Medium ERP

Introduction

ERP implementations are high-risk affairs. Much of the ERP functionality difficult to implement, many of the vendors are offering dated technology – that if it were not for how the word “legacy” is controlled by software vendors and consulting companies would be called legacy. (Hint, legacy is a term of propaganda, and can only every be used to label a system one wishes to replace – never to a vendor’s software.) One of the major complaints of ERP clients is that their ERP vendors have stagnated while buyers keep paying high yearly service charges.

The unfortunate, if under-reported fact is that many years after most ERP systems go live, it is difficult to demonstrate the return on investments from them. This story is of course worse if buyers buy expensive ERP systems. Of all ERP categories, tier 1 ERP are the worst values – and the common logic presented that only tier ERP systems have the functionality for the complexities of large companies is not true. The actual costs of ERP systems are covered in our TCO Estimation for ERP, as well as in our Solution Architecture Packages. Several up and coming ERP vendors are far more competitive along all the decision making criteria in which we measure and score ERP software, and the fact that it is now easy to find stand alone financial applications that are superior to the financial modules in any ERP system is taking the wind out of the shopworn “ERP is necessary” argument. Furthermore, some of the best applications are – while not the least expensive, are towards the less expensive end of the spectrum.

What the Research Says About Risk Implications of ERP

ERP implementations are generally known as risky, but this does not seem to influence the software selection process. This is unfortunate as the risks vary depending upon the application selected. Only rarely is the actual success rate of ERP implementations quoted. According to the publication The Critical Success Factors for ERP Implementation: An Organizational Fit Perspective, the success rate is roughly 25 percent. So, according to this source, 75 percent of ERP implementations are considered failures. But quoting just one study is misleading because the estimates are truly all over the map, as the following quotation attests.

“A study by the Standish Group estimates that 31 percent of projects are not successful (Kamhawi, 2007). Barker and Frolick (2003) suggest that 50 percent of ERP implementations are failures. Hong and Kim (2002) estimate a 75 percent failure rate, while Scott and Vessey (2002) estimates failure rates as high as 90 percent. Different statistics for the success or failure of ERP projects have been offered by researchers. In addition Bradford and Sandy (2002) reported that 57 percent of the companies they interviewed had not attempted to assess the performance of their ERP systems owing to a lack of empirically effective evaluation models.” – Measures of Success in Project Implementing Enterprise Resource Planning

One of the most ridiculous arguments we have heard is that (particularly from the tier 1 ERP vendors) ERP implementations are so difficult that companies that manage to pull them off gain a competitive advantage over other companies. In this incarnation, the ERP system is presented as something akin to the Ironman Triathlon where the implementing company proves its toughness by running the gauntlet. It is an interesting analogy, which as far as we aware is unique in the field of enterprise software where ease of implementation—rather than difficulty of implementation—is traditionally considered a virtue. And in fact, the argument is edging extremely close to circular reasoning: ERP is virtuous because it is difficult to do, and it is difficult to do because it is virtuous. It is also the only time we can recall that a high failure rate is presented as a positive attribute of a software category.

ERP as “Just Another Application”

This transition of ERP from the center of the IT solution architecture is almost never written about or discussed (one of the few exceptions is in an article from Tech Target, who’s reference is show below) however, ERP is not nearly as influential or critical to the IT solution architecture as it once was. After bringing about a period of relative centralization (we say relative, because many of the “legacy” systems that ERP was supposed to eliminate never went away because ERP systems lacked the functionality to replace them), solution architecture has decentralized. And every year the scope of ERP shrinks and companies bring up less ERP functionality, and look for better functionality outside of ERP systems.  In fact, CRM has been forecasted by Forbes to surpass ERP in revenues by the year 2017. This is the first time that any other category of enterprise software has even come close to ERP sales since ERP was introduced back in the 1980s.

Interestingly even when this issue has been brought to the surface, such as with the Tech Target article, the coverage is notable for what is left out. Curiously, they quote Gartner about the future, the firm that coined the term “ERP” — and has historically been one of the big cheerleaders on big ERP. Gartner was one of the pied pipers that lead companies to these bad big ERP purchases on the basis of what has turned out to lack a strategic and technological foundation. This leads to the next section. The question being which of the ERP vendors can effectively support the new reality of ERP not longer being the center of the solution architecture.

Finding Flexible ERP Software Vendors

Buyers should look at ERP systems as an a la carte menu. In our Solution Architecture Packages we compare the TCO of multiple alternatives.

Buyers have all types of options; each should be evaluated on the basis of its TCO as well as the functionality match to the buyer’s requirements. These estimators will be quite a surprise to the vast majority of buyers, because our analysis shows that the only losing strategy is to choosing the recommendation of all the major consulting companies and center their solution architecture on a tier 1 ERP system. Not doing this means the buyer comes out with a far lower overall TCO and with far better functionality – resulting in a much higher ROI.

Some ERP software vendors are comfortable not being the center of the IT solution architecture and other are not. This indisputable final outcome of ERP is the opposite conclusion to a the ERP trend as predicted by every authority on ERP (primarily SAP and Oracle, consulting companies, IT analysts). They were supposed to be the experts on this topic, but they all had a major flaw – they all had a financial bias, making their forecasts invalid. See our Software Selection Packages to learn all about the effects of financial bias on forecasting. This makes dealing with SAP and Oracle in fact dangerous for buyers because they are proposing the continuation of a strategy that calls for a large and expensive ERP system, which is the center of the IT solution architecture continually consuming a large percent of the IT budget.

This strategy has never worked as the evidence from research that has been performed shows a negative return on investment from larger ERP solutions. (Tip: any entity that proposes that ERP has a positive ROI, simply ask them to produce the independent research study) The evaluation of the research on ERP systems is explained in fine detail in the SCM Focus Press book The Real Story Behind ERP: Separating Fact from Fiction.

On the other hand, other vendors, examples being ProcessPro, Rootstock and ERPNext never operated from this point of view, and are happy to have their system implemented as part of any solution architecture strategy desired by their customers – they are not practicing account control by selling an ERP system. Instead they have always considered themselves providing low cost ERP, and just one system as part of an overall ecology than can be the center or any fit with their customer’s solution architecture that the customer desires. These are the types of ERP vendors that buyers should seek out, as they provide not only the best software in ERP, but also the best ability to partner with, rather than seeking to control their customers. Another major advantage of purchasing from a software vendor that only makes ERP software is that buyers will not relentlessly pitched other products by these software vendors sales reps.

Tier 1 ERP is in the Price Gouging Phase

Oracle and SAP have put very little back into their tier 1 ERP products for roughly 15 years, and as a result the applications are seriously dated. However, their support costs continually increase. This is the negative consequence of software “lock in.” In fact it is estimated that Oracle receives up to a 90% margin on its ERP service contracts. Many buyers have felt the pinch as the following quotation suggests.

“When you put in a $40 million or $50 million ERP package, it’s difficult to have an exit strategy without causing a lot of pain. They know that, and so they increase our costs every year,” he says. Therefore, Steinour says he would like to lay the groundwork for a more strategic approach.” – ComputerWorld

If buyers could wipe the slate clean, we have concluded it is unlikely SAP or Oracle could rebook a high fraction of the customers it currently is receiving ERP support revenues from. Interestingly, the fact that one makes oneself extremely susceptible to the power of their supplier when they concentrate their purchases with a single software vendor was not brought up by any of the supposed experts that were promoters for big ERP. Hold you breath, because one of the major logics presented by ERP vendors, consulting companies and IT analysts was that ERP systems would reduce IT costs.

The Growth of SaaS ERP

Something, which we see as a strong future growth trend, is SaaS ERP. Consulting companies and non-SaaS software vendors have been proposing that SaaS should not happen for “core” applications, however their arguments are simply conveniently connected back to their financial models. SaaS for ERP is bad for them, but it is a good idea for their clients. It’s just that they don’t have SaaS applications to sell. Because they have no SaaS applications, to sell, their advice to customers is to only use SaaS for “non core” software like CRM.

SaaS ERP should begin at the smaller end of the company size spectrum and move its way up. SaaS solutions are particularly attractive for smaller companies and even for midsized companies that have under performing tier 2 ERP applications. There are several very good alternatives. One of our favorites being ERPNext. These systems are easy for both experienced and novices to use because the business process is clearly explained right in the application.

Software Category Summary

The complete story on ERP is quite clear, it is simply not communicated to buyers because it’s more profitable to promote big ERP, rather than communicating accurate information on the topic. ERP systems never provided much of an ROI to buyers, and our research provides a logic for why when accounted for correctly, the ROI for most ERP systems has actually been negative. This research cannot be presented in a few paragraphs, but is presented in its complete form in the SCM Focus Press book, The Real Story Behind ERP: Separating Fact from Fiction. However, buyers don’t have to accept negative ROI ERP implementations, and the best way to control for this is to select better and less expensive ERP systems, which have better functionality, can be implemented more quickly, and are not so difficult to integrate to other systems that they create negative externalities on the overall solution architecture. There are several good applications to choose from that meet all of these criteria.

MUFI Rating & Risk

See the MUFI Ratings & Risk below for all of the applications we cover.

Vendor NameApplication
Big ERP
SAPMUFI Rating & Risk – SAP ECC
OracleMUFI Rating & Risk – JD Edwards EnterpriseOne
EpicorMUFI Rating & Risk – Epicor ERP
SageMUFI Rating & Risk – Sage X3
InforMUFI Rating & Risk – Infor Lawson
Small and Medium ERP
SAPMUFI Rating & Risk – SAP Business One
OracleMUFI Rating & Risk – JD Edwards World
ProcessProMUFI Rating & Risk – ProcessPro
RootstockMUFI Rating & Risk – Rootstock
ERPNextMUFI Rating & Risk – ERPNext
OpenERPMUFI Rating & Risk – OpenERP
MicrosoftMUFI Rating & Risk – Microsoft Dynamics AX
Financial Applications
IntacctMUFI Rating & Risk – Intacct
IntuitMUFI Rating & Risk – Intuit Quickbooks Enterprise Solutions
FinancialForceMUFI Rating & Risk – FinancialForce
NetSuiteMUFI Rating & Risk – NetSuite OneWorld
PLM
SAPMUFI Rating & Risk – SAP PLM
Arena SolutionsMUFI Rating & Risk – Arena Solutions Arena PLM
Hamilton GrantMUFI Rating & Risk – Hamilton Grant Recipe Management
Demand Planning
SAPMUFI Rating & Risk – SAP APO DP
TableauMUFI Rating & Risk – Tableau (Forecasting)
Business Forecast SystemsMUFI Rating & Risk – Forecast Pro TRAK
Demand WorksMUFI Rating & Risk – Demand Works Smoothie
JDAMUFI Rating & Risk – JDA Demand Management
ToolsGroupMUFI Rating & Risk – ToolsGroup SO99 (Forecasting)
Supply Planning
SAPMUFI Rating & Risk – SAP SNP
SAPMUFI Rating & Risk – SAP SmartOps
ToolsGroupMUFI Rating & Risk – ToolsGroup SO99 (Supply Planning)
Demand WorksMUFI Rating & Risk – Demand Works Smoothie SP
PlanetTogetherMUFI Rating & Risk – PlanetTogether Galaxy APS Superplant
Production Planning
SAPMUFI Rating & Risk – SAP APO PP/DS
DelfoiMUFI Rating & Risk – Delfoi Planner
PreactorMUFI Rating & Risk – Preactor
AspenTechMUFI Rating & Risk – AspenTech AspenOne
PlanetTogetherMUFI Rating & Risk – PlanetTogether Galaxy APS
BI Heavy
SAPMUFI Rating & Risk – SAP BI/BW
SAPMUFI Rating & Risk – SAP Business Objects
OracleMUFI Rating & Risk – Oracle BI
SASMUFI Rating & Risk – SAS BI
MicroStrategyMUFI Rating & Risk – MicroStrategy
IBMMUFI Rating & Risk – IBM Cognos
TeradataMUFI Rating & Risk – Teradata
ActuateMUFI Rating & Risk – Actuate ActuateOne
BI Light
SAPMUFI Rating & Risk – SAP Crystal Reports
QlikTechMUFI Rating & Risk – QlikTech QlikView
TableauMUFI Rating & Risk – Tableau (BI)
CRM
SAPMUFI Rating & Risk – SAP CRM
OracleMUFI Rating & Risk – Oracle RightNow
OracleMUFI Rating & Risk – Oracle CRM On Demand
InforMUFI Rating & Risk – Infor Epiphany
Base CRMMUFI Rating & Risk – Base CRM
SalesforceMUFI Rating & Risk – Salesforce Enterprise
SugarCRMMUFI Rating & Risk – SugarCRM
MicrosoftMUFI Rating & Risk – Microsoft Dynamics CRM
NetSuiteMUFI Rating & Risk – NetSuite CRM

References

http://searchfinancialapplications.techtarget.com/feature/Is-ERP-technology-going-nowhere-or-everywhere