MUFI Rating & Risk – NetSuite OneWorld

MUFI Rating & Risk – NetSuite OneWorld

MUFI: Maintainability, Usability, Functionality, Implement ability

Vendor: NetSuite (Select For Vendor Profile)

Introduction

NetSuite OneWorld has over 10,000 customers. NetSuite OneWorld has one of the better user satisfaction levels in the ERP software category.

Application Detail

While often marketed as such and known as such (which is why we have included it in this software category), NetSuite is not an ERP system. Its most accurate designation is a stand-alone financial system, which has very basic inventory management and warehouse management functionality. NetSuite has used the ERP moniker for marketing reasons. NetSuite has recently grown its footprint through acquisition into HR, CRM and eCommerce. But the strength of the application is finance and reporting on finance.

The fact that NetSuite is not a full ERP system can be confusing because NetSuite is one of the major proponents of something called two-tiered ERP. This is where a tier 1 ERP system is used – both at the parent company level as well as a master ERP system (that integrates other ERP systems) and then ERP systems of lower tiers are used for subsidiaries, etc.…

NetSuite has been putting themselves forward as an alternative for the second tier, but they can primarily handle the financial side of the equation, with other companies necessary — such as a Rootstock, to complete the ERP footprint. NetSuite is a SaaS-based solution and is well regarded for its financial functionality. In fact, it is considered the best system for consolidating multiple companies.

Netsuite Browser

NetSuite OneWorld has a browser user interface, with easy an easy to navigate menu bar along the top. Reporting is a strong point of the application.

NetSuite OneWorld can be leveraged for what it is, but it is also a bit difficult to classify. After evaluating NetSuite, we have categorized it as a stand-alone financial application, although it is a bit more than that – but it is nowhere near broad enough in the scope of functionality to be called and ERP system.

NetSuite OneWorld’s strength is its ability to be brought up quickly, and its ease of use. However, in which direction will NetSuite grow? Will it use its newfound market muscle to make more acquisitions? If so will that reduce software quality and delivery as this usually does? NetSuite’s CRM and eCommerce applications are not competitive offerings, so NetSuite’s growth outside of OneWorld has not been encouraging. Typically, we don’t make a big deal about “vision.” We leave that more esoteric analysis to Gartner. However, NetSuite is one of the few vendors whose vision is a concern to us, because we can’t understand NetSuite’s strategy – it seems built on wishful thinking. The following paragraph will explain why.

NetSuite offers its product primarily through SaaS, which is one reason it can be brought up so quickly. However, NetSuite’s pricing has dramatically increased over the past several years, which makes it far more expensive than any of the stand-alone financial systems, even though it is not an ERP system, it is priced as if it is an ERP system which is towards the expensive end of the spectrum. NetSuite is in our view killing its value proposition. NetSuite OneWorld is a basic system; it should not be priced towards the upper end of a software category that it does not even belong in. Considering that one of NetSuite’s main marketing programs is to pitch themselves as a tier 3 ERP solution to complement tier 1 ERP applications like SAP ECC and Oracle JD Edwards Enterprise One, NetSuite’s pricing seems really out of sorts.

NetSuite is considered a go-to application for some types of financial functionalities – in particular, multi entity and multi-currency that is better than any other application. NetSuite strongly markets this functionality as is shown in the following quotation from their website.

NetSuite OneWorld can populate a single charts-of-accounts across subsidiaries, or use separate charts-of-accounts for each company with postings between subsidiaries such as expense allocation managed via inter-company journals. Local taxes are readily handled across subsidiaries with an embedded tax engine that allows for multiple tax schedules for everything from GST, to VAT, to consumption tax or general sales tax. Revenue recognition, local financial reporting and compliance are also built-in components. – NetSuite

For some of these functionalities, there are not good alternatives. However to engage those functionalities is quite expensive. Outside of these specialized functionalities, we do not consider NetSuite a compelling value.

MUFI Scores

All scores out of a possible 10.

Vendor and Application Risk

Software Decisions Risk Defined: (See This Link for Our Categorization of Risk)

NetSuite OneWorld is an application with reasonable implementation risk. OneWorld has a high implement ability and a decent functionality level. Some of the things that OneWorld can do on the financial side can exceed expectations.

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.

Risk Management Approach

Problems can arise when OneWorld is implemented as if it is a true ERP system, instead of considering it a best of breed financial system with a few other areas of functionality – therefore the largest challenge we see regarding managing the risks of a OneWorld implementation is the scope of the implementation.

Finished With Your Analysis?

To go back to the Software Selection Package page for the Finance & Accounting software category. Or go to this link to see other analytical products for NetSuite OneWorld.

References

http://www.investopedia.com/terms/c/conglomerate.asp

http://www.netsuite.com/portal/products/oneworld/global-erp.shtml

Solution Architecture Package – Oracle Two Tiered ERP Calculator

Introduction

A two-tiered ERP strategy is where multiple ERP systems are used – most often one tier 1 ERP system is combined with tier 2 and tier 3 ERP systems. The ERP vendors and applications are typically categorized into the following “tiers.” The concept is that different ERP systems are to be used for different “tiers” of the business.

Gartner has the following definition of two-tiered ERP.

“Two-tier ERP is the use of different ERP systems at two different layers of the organization: One system serves as the global backbone, often for administrative ERP processes such as financials, human resources and procurement, which are able to be harmonized across all divisions as shared services. (bold added) In addition to the global backbone, one or more ERP solutions (or even reconfigured instances of the same system) are used in parts of the organization to support geographical subsidiary needs, usually for smaller operational requirements, such as sales, marketing, field services and local manufacturing.”

Gartner’s definition is a bit too rigid to describe how the term two tiered ERP tends to be used, and it also does not explain how the strategy differs from single instance ERP – where the entire entity is migrated to a single – typically tier 1 ERP system. In fact, this is rarely discussed in print, because most of the entities that write on ERP have for years been proposing that companies follow a single instance ERP strategy. Two-tiered ERP is the first public admission by ERP companies that a multi-ERP environment can be beneficial. Since the beginning of ERP in the 1980’s the consistent approach by large ERP software vendors has been to nudge their customers in the direction of centralizing their businesses to a single ERP system. However a broad scale transition to single instance ERP never occurred except for exceptions and for smaller companies, and there are a number of reasons, why, which are explained in detail in the SCM Focus Press book The Real Story Behind Two Tiered ERP.

Two-tiered ERP is an important concept, but not for a reason that many people exposed to the concept realize. It is important because two-tiered ERP represents one of the first cracks in the façade of single instance ERP. ERP has nowhere near achieved the objectives that it was predicted to achieve and many of the ERP systems have aged quite badly. ERP is on its way to being “just another system,” instead of the centerpiece of the solution architecture and overpaying for ERP is now one of the least effective uses of IT budgets.

Important points regarding two-tiered ERP are the following:

  1. Financial Bias: Most the entities that propose the two-tiered ERP have a financial bias. They tend to be tier 2 or tier ERP vendors that are trying to sell their software by any means necessary, and tier 1 vendors that are attempting to answer the logic for two tiered ERP by recommending that their ERP applications (either tier 1 or tier 2, as both SAP and Oracle have tier 2 ERP applications in addition to tier 1 ERP applications) by proposing that two-tiered ERP is a “fine idea,” as long as it means using their applications.
  2. No Attempt to Provide Evidence: There is some anecdotal evidence that this or that company saved money using a two-tiered ERP strategy, but no real research into the area. Academics have not researched the topic.
  3. No Reliability to Research: No entity that would be traditionally relied upon to perform research on this topic would be able to perform the research without financial bias affecting their research results. This is because they are all in some way financially dependent upon the large software vendors. For instance, even IT publications receive a disproportionate percentage of their advertising from either large software vendors or large consulting companies – both of which would push against any research which showed that two tiered ERP was effective. Entities do not publish research, which contradicts their own financial model.

The Comparisons

Our first comparison shows all using one single instance of Oracle JD Edwards EnterpriseOne ERP system to support 600 users. This is compared against a two-tiered ERP strategy that uses Oracle JD Edwards EnterpriseOne for 200 users, and then four other ERP systems (Epicor, Infor Lawson, Sage X3 and NetSuite OneWorld).

This is a very realistic scenario as the average company that uses ERP systems has five ERP systems within the company. This statistic combines with the statistic that the average ERP system has 60% of its modules actually operational.

Alternate One - 100% Oracle JD Edwards EnterpriseOne VS Multi Two Tier ERP

CategoryApplicationTCOUser #
Tier 1 ERPOracle JD Edwards EnterpriseOne$ 62,340,403600

Alternate One - 100% Oracle JD Edwards EnterpriseOne VS Multiple Two Tier ERP Part 2

CategoryApplicationTCOUser #
Total$ 50,579,450600
Tier 1 ERPOracle JD Edwards$ 23,712,250200
Tier 2 ERPEpicor ERP$ 7,493,575100
Tier 2 ERPInfor Lawson$ 6,308,375100
Tier 2 ERPSage X3$ 6,371,000100
Tier 3 ERPNetSuite OneWorld$ 6,694,250100

This analysis compares the use of five ERP systems versus the use of one ERP system, each serving the same number of users. The cost savings are significant at 19%.

Alternate Two - Oracle JD Edwards EnterpriseOne VS Tier 1 SAP + One Large Tier 2 ERP

CategoryApplicationTCOUser #
Tier 1 ERPOracle JD Edwards EnterpriseOne$ 59,957,378800

Alternate Two - Oracle JD Edwards EnterpriseOne VS Tier 1 SAP + One Large Tier 2 ERP Part 2

CategoryApplicationTCOUser #
Total$ 61,367,489800
Tier 1 ERPOracle JD Edwards EnterpriseOne$ 41,560,269400
Tier 2 ERPSage X3$ 19,807,220400

The next example shows a larger number of users, at 800. It also cuts down the number of ERP systems in the two-tiered ERP strategy to just two ERP systems – Oracle JD Edwards EnterpriseOne and Sage X3. This scenario provides no cost savings. However, it must be remembered that this is only a cost analysis. Having only two ERP systems, also cuts down on the flexibility of the company as there is much more variety in four ERP applications than one. When companies allow different divisions to choose their own ERP systems – that is follow a decentralized approach – they rarely settle on the same ERP system. This is logical because different companies and sub-companies have different requirements that are optimally met by different applications. 

Alternate Three - Oracle JD Edwards EnterpriseOne VS SAP for Both Tier 1 & Tier 2

CategoryApplicationTCOUser #
Tier 1 ERPOracle JD Edwards EnterpriseOne
$ 59,957,378800

Alternate Three - Oracle JD Edwards EnterpiseOne VS SAP for Both Tier 1 & Tier 2 Part 2

CategoryApplicationTCOUser #
Total$ 62,450,719800
Tier 1 ERPOracle JD Edwards EnterpiseOne$ 41,560,269400
Tier 2 ERPOracle JD Edwards World$ 20,890,450400

SAP and Oracle have responded to the tier 2 ERP vendors that is makes more sense to use their tier 2 ERP offerings rather than move to a different ERP vendor for the 2nd tier. This scenario above tests that hypothesis. In this scenario, there are again no cost savings. 

Conclusion

According to our research, one can save money by following a two-tiered ERP strategy, and we predict that the savings would be significant, but it greatly depends upon which tier 2 ERP systems are used, and if the company deploys multiple or a single tier 2 ERP system. There are scenarios where following a two tier ERP strategy will save no money. This only covers the the cost or TCO side of the equation. A major benefit of tier 2 ERP is to gain more diversity in functionality that can be attained by using just one ERP system.

It should be apparent from each of the examples provided above that the primary reason for this cost savings is that tier 1 ERP applications are considerably more expensive than lower tiered ERP systems. Of course, tier 1 ERP systems tend to be better fits for larger companies, although this generality should be questioned more now than ever as both SAP and Oracle have essentially “stabilized” their tier 1 ERP systems – which means little future development — and other ERP applications have closed some of the gap in functionality. Our Software Selection Package for Finance/Accounting explains this point in detail.

Both Oracle tier 1 ERP systems comes with a great deal of implementation complexity and maintenance and it is well understood that their tier 1 offerings tend to be overkill for smaller companies/divisions etc.. Therefore, the claims made by proponents of two-tier ERP strategies regarding costs savings are correct. However, with both Oracle the cost savings changes little whether non- Oracle tier 2 ERP applications are purchased, or if the ERP software from other vendors is purchased. However, our research also does not show that a buyer receives any cost benefit from using Oracle for all the tiers, although the buyer would lose flexibility if they chose to limit their options to purchasing and deploying multiple ERP systems from Oracle. As is most often the case, each application should be selected on the basis of its functionality fit with the business requirements. No other consideration is even close to as important.

Software Selection

  • Want Help with Software Selection for your Business?

    It is difficult for most companies to perform software selection without outside advice. It is impossible to obtain honest software selection support from consulting companies. We offer expert and unbiased remote software selection support.

    This article is free, we do not answer questions for free. Filling out this form is for those that have a budget. If that describes you, just fill out the form below and we'll be in touch asap.

References

Montgomery, Nigel. Ganly, Denise. How to Determine If a Two-Tier ERP Suite Strategy Is Right for You. Gartner. October 24 2012

Solution Architecture Package – SAP Two Tiered ERP Calculator

Introduction

A two-tiered ERP strategy is where multiple ERP systems are used – most often one tier 1 ERP system is combined with tier 2 and tier 3 ERP systems. The ERP vendors and applications are typically categorized into the following “tiers.” The concept is that different ERP systems are to be used for different “tiers” of the business. Gartner has the following definition of two-tiered ERP.

Two-tier ERP is the use of different ERP systems at two different layers of the organization: One system serves as the global backbone, often for administrative ERP processes such as financials, human resources and procurement, which are able to be harmonized across all divisions as shared services. (bold added) In addition to the global backbone, one or more ERP solutions (or even reconfigured instances of the same system) are used in parts of the organization to support geographical subsidiary needs, usually for smaller operational requirements, such as sales, marketing, field services and local manufacturing.

Gartner’s definition is a bit too rigid to describe how the term two tiered ERP tends to be used, and it also does not explain how the strategy differs from single instance ERP – where the entire entity is migrated to a single – typically tier 1 ERP system. In fact, this is rarely discussed in print, because most of the entities that write on ERP have for years been proposing that companies follow a single instance ERP strategy. Two-tiered ERP is the first public admission by ERP companies that a multi-ERP environment can be beneficial. Since the beginning of ERP in the 1980’s the consistent approach by large ERP software vendors has been to nudge their customers in the direction of centralizing their businesses to a single ERP system. However a broad scale transition to single instance ERP never occurred except for exceptions and for smaller companies, and there are a number of reasons, why, which are explained in detail in the SCM Focus Press book The Real Story Behind Two Tiered ERP. Two-tiered ERP is an important concept, but not for a reason that many people exposed to the concept realize. It is important because two-tiered ERP represents one of the first cracks in the façade of single instance ERP. ERP has nowhere near achieved the objectives that it was predicted to achieve and many of the ERP systems have aged quite badly. ERP is on its way to being “just another system,” instead of the centerpiece of the solution architecture and overpaying for ERP is now one of the least effective uses of IT budgets. Important points regarding two-tiered ERP are the following:

  1. Financial Bias: Most the entities that propose the two-tiered ERP have a financial bias. They tend to be tier 2 or tier ERP vendors that are trying to sell their software by any means necessary, and tier 1 vendors that are attempting to answer the logic for two tiered ERP by recommending that their ERP applications (either tier 1 or tier 2, as both SAP and Oracle have tier 2 ERP applications in addition to tier 1 ERP applications) by proposing that two-tiered ERP is a “fine idea,” as long as it means using their applications.
  2. No Attempt to Provide Evidence: There is some anecdotal evidence that this or that company saved money using a two-tiered ERP strategy, but no real research into the area. Academics have not researched the topic.
  3. No Reliability to Research: No entity that would be traditionally relied upon to perform research on this topic would be able to perform the research without financial bias affecting their research results. This is because they are all in some way financially dependent upon the large software vendors. For instance, even IT publications receive a disproportionate percentage of their advertising from either large software vendors or large consulting companies – both of which would push against any research which showed that two tiered ERP was effective. Entities do not publish research, which contradicts their own financial model.

The Comparisons

Our first comparison shows all using one single instance SAP ERP system (ECC/R/3) to support 600 users. This is compared against a two-tiered ERP strategy, which uses SAP ERP (ECC/R/3) for 200 users, and then four other ERP systems (Epicor, Infor Lawson, Sage X3 and NetSuite OneWorld). This is a very realistic scenario as the average company that uses ERP systems has five ERP systems within the company. This statistic combines with the statistic that the average ERP system has 60% of its modules actually operational.

Alternate One - 100% SAP ERP/ECC/R/3 VS Multi Two Tier ERP

CategoryApplicationTCOUser #
Tier 1 ERPSAP ERP/ECC/R/3$ 72,522,188600

Alternate One - SAP ERP/ECC/R/3 VS Multiple Two Tier ERP Part 2

CategoryApplicationTCOUser #
Total$ 54,762,200600
Tier 1 ERPSAP ERP/ECC/R/3$ 27,895,000200
Tier 2 ERPEpicor ERP$ 7,493,575100
Tier 2 ERPInfor Lawson$ 6,308,375100
Tier 2 ERPSage X3$ 6,371,000100
Tier 3 ERPNetSuite OneWorld$ 6,694,250100

This analysis compares the use of five ERP systems versus the use of one ERP system, each serving the same number of users. The cost savings are significant at 24%.

Alternate Two - SAP ERP/ECC/R/3 VS Tier 1 SAP + One Large Tier 2 ERP

CategoryApplicationTCOUser #
Tier 1 ERPSAP ERP/ECC/R/3$ 67,625,688800

Alternate Two - SAP ERP/ECC/R/3 VS Tier 1 SAP + One Large Tier 2 ERP Part 2

CategoryApplicationTCOUser #
Total$ 68,155,345800
Tier 1 ERPSAP ERP/ECC/R/3$ 48,348,125400
Tier 2 ERPSage X3$ 19,807,220400

The next example shows a larger number of users, at 800. It also cuts down the number of ERP systems in the two-tiered ERP strategy to just two ERP systems – SAP ERP/ECC/R/3 and Sage X3. This scenario provides no cost savings.  However, it must be remembered that this is only a cost analysis. Having only two ERP systems, also cuts down on the flexibility of the company as there is much more variety in four ERP applications than one. When companies allow different divisions to choose their own ERP systems – that is follow a decentralized approach – they rarely settle on the same ERP system. This is logical because different companies and sub-companies have different requirements that are optimally met by different applications. 

Alternate Three - SAP ERP/ECC/R/3 VS SAP for Both Tier 1 & Tier 2

CategoryApplicationTCOUser #
Tier 1 ERPSAP ERP/ECC/R/3$ 67,625,688800

Alternate Three - SAP ERP/ECC/R/3 VS SAP for Both Tier 1 & Tier 2 Part 2

CategoryApplicationTCOUser #
Total$ 64,823,695800
Tier 1 ERPSAP ERP/ECC/R/3$ 48,348,125400
Tier 2 ERPSAP Business One$ 16,475,570400

SAP and Oracle have responded to the tier 2 ERP vendors that is makes more sense to use their tier 2 ERP offerings rather than move to a different ERP vendor for the 2nd tier. This scenario above tests that hypothesis. In this scenario, there are moderate cost savings of 4%. 

Conclusion

According to our research, one can save money by following a two-tiered ERP strategy, and we predict that the savings would be significant, but it greatly depends upon which tier 2 ERP systems are used, and if the company deploys multiple or a single tier 2 ERP system. There are scenarios where following a two tier ERP strategy will save no money. This only covers the the cost or TCO side of the equation. A major benefit of tier 2 ERP is to gain more diversity in functionality that can be attained by using just one ERP system. It should be apparent from each of the examples provided above that the primary reason for this cost savings is that tier 1 ERP applications are considerably more expensive than lower tiered ERP systems. Of course, tier 1 ERP systems tend to be better fits for larger companies, although this generality should be questioned more now than ever as both SAP and Oracle have essentially “stabilized” their tier 1 ERP systems – which means little future development — and other ERP applications have closed some of the gap in functionality. Our Software Selection Package for Finance/Accounting explains this point in detail. Both SAP and Oracle tier 1 ERP systems comes with a great deal of implementation complexity and maintenance and it is well understood that their tier 1 offerings tend to be overkill for smaller companies/divisions etc.. Therefore, the claims made by proponents of two-tier ERP strategies regarding costs savings are correct. With SAP, the cost savings are higher if non-SAP or Oracle tier 2 ERP applications are purchased versus most other tier 2 ERP applications. However, we have several less known tier 2 ERP applications that have lower costs than SAP Business One. As is most often the case, each application should be selected on the basis of its functionality fit with the business requirements. No other consideration is even close to as important.

Software Selection

  • Want Help with Software Selection for your Business?

    It is difficult for most companies to perform software selection without outside advice. It is impossible to obtain honest software selection support from consulting companies. We offer expert and unbiased remote software selection support.

    This article is free, we do not answer questions for free. Filling out this form is for those that have a budget. If that describes you, just fill out the form below and we'll be in touch asap.

References

Montgomery, Nigel. Ganly, Denise. How to Determine If a Two-Tier ERP Suite Strategy Is Right for You. Gartner. October 24 2012

Enterprise Software TCO Calculator – NetSuite OneWorld

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: NetSuite (See for Vendor Rating)
  • Software Category: Financial and Accounting
  • Company Headquarters: 2955 Campus Drive, Suite 100, San Mateo, CA 94403-2511
  • Site: http://www.netsuite.com
  • Contact number: 877.638.7848
  • Delivery Mechanism: SaaS

Finished With Your Analysis?

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

Project Planning Package – NetSuite OneWorld

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: NetSuite (See for Vendor Rating)
  • Software Category: Financial and Accounting
  • Company Headquarters: 2955 Campus Drive, Suite 100, San Mateo, CA 94403-2511
  • Site: http://www.netsuite.com
  • Contact number: 877.638.7848
  • Delivery Mechanism: SaaS

Finished With Your Analysis?

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

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 – Financial and Accounting

Introduction

Something very interesting is happening in the space for stand-alone financial systems. And that is that even the largest buyers now have superior solutions available to them outside of ERP system financials. This is a fact, but is still little known among enterprise software buyers, most who still adhere to the incorrect notion that ERP systems offer the best financial and accounting functionality.

Quickbooks was the originator of the stand alone financial system, and has been fabulously successful, and has a very high client satisfaction level. Many people do not know that Quickbooks runs quite a few companies of surprising size that have essentially outgrown Quickbooks – because they started with the application before they began to grow, and never switched to a new financial/accounting system. However, other more heavy-duty stand-alone financial systems have risen to prominence. These application integrate very easy to supply chain and CRM systems, and have the potential to change the game in the ERP space.

A New Better Era For Financial and Accounting Applications

The applications profiled in this section have a level of user satisfaction, and a level of usability that ERP systems cannot match. Furthermore, the discrepancy is quite large and is widening because the stand along financial software vendors are innovators, while most ERP vendors are not. Secondly, some of these financial software vendors are quite new – which means they have exceeded the financial systems in ERP systems in a very short period of time. If the difference is already so great, our prediction is that it will only continue to grow.

Some of these new stand alone financial application are doing things that the financial systems in ERP suites never thought to do, and are allowing the buyers that use them to actually be better managed. For instance, the statistics on everything from how quickly money is collected, to revenue recognition to how sales is tracked is better in these applications than in ERP systems. The major consulting companies have been giving the advice to their clients that implementing an ERP system are the best route to better financial performance. However, the research into ERP system implementations over a period of three decades has proven this to be untrue. The question for the present and which will only increase in the future, is how much do companies intend to accept their performance to be reduced by continuing to use ERP based financial system?

Another major benefit of this category of applications is that none of the major consulting companies have consulting divisions that focus on implementing them. These companies do not get their sales leads from major consulting companies – which means the cost of implementation is far lower and the likelihood of project success is substantially higher than if a major consulting company is involved in the implementation. This is shown in our TCO estimation when one compares stand along financial applications to ERP applications.

Strong Innovation

Financial Force and Intacct are software vendors to keep one’s eye on. In addition to its leading financial application, Financial Force has introduced a very nice application, which is essentially a complete solution for consulting management called Professional Services Automation.

Professional Service AutomationThis application leverages Financial Force’s financial functionality by planning items like bill-ability, consulting revenues – in fact all the requirements to manage a consulting entity in one application.

Software Category Summary

The stand-alone financial application category has at least three excellent choices for small, medium and large buyers. While there is no research on the financial returns of these applications, they are so superior to what is currently used, that is ERP financial modules, that the likelihood of a strong ROI is properly implemented is quite high. The news on these applications is slow to get out, because buyers will not hear about them from their consulting company. However, once a detailed comparison is performed for what they can do, they become easy decisions.

MUFI Rating & Risk

See the MUFI Ratings & Risk below for each application in the Finance & Accounting software category.

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