FrontRunners quadrants highlight the top software products for North American small businesses. All products in the quadrant are top performers. Small businesses can use FrontRunners to make more informed decisions about what software is right for them.
To create this quadrant, we evaluated over 600 enterprise resource planning (ERP) products. Those with the top scores for their capability and value made the quadrant.
Scores are based largely on reviews from real software users, along with other product performance details (e.g., what features they offer, how many customers they have).
Every product in this quadrant offers a balance of capability (how much the products can do) and value (whether they’re worth their cost) that makes them stand out in the race for small business software success.
FrontRunners has four sub-quadrants:
Depending on the specific needs of a software buyer, a product in any of these sub-quadrants could be a good fit.
Why? To even be considered for this FrontRunners, a product had to meet a minimum user rating score of 3.0 for both capability and value. This means that all products that qualify as FrontRunners are top-performing products in their market. Their positions in the quadrant are plotted relative to how their peers performed.
For some buyers, a specific FrontRunners quadrant might be best. For example, a number of the vendors in the “masters” and “leaders” quadrants are ERP “megavendors”—i.e., vendors that sell a full complement of ERP modules in a variety of bundles tailored to different industry verticals. Their licensing schemes are frequently tailored to the needs of enterprise buyers rather than small businesses, and they may offer far more functionality than small businesses need. For such buyers, vendors in the “contenders” and “pacesetters” quadrants may be better fits.
You can download the full FrontRunners for ERP report here. It contains individual scorecards for each product on the Frontrunners quadrant.
You can find the full FrontRunners methodology here, but the gist is that products are scored in two areas, Capability and Value.
To be considered at all, products must have at least 10 reviews and achieve minimum user rating scores. They also have to offer a core set of functionality—for example, accounting and human resources.
From there, user reviews and other product performance details, such as the product's customer base and the features it offers, dictate the Capability and Value scores. Capability is plotted on the x-axis, and Value is plotted on the y-axis.
For more information about FrontRunners, check out the following:
Have questions about how to choose the right product for you? You’re in luck! Every day, our team of advisors provides (free) customized shortlists of products to hundreds of small businesses.
Check out the FrontRunners External Usage Guidelines when referencing FrontRunners content. Except in digital media with character limitations, the following disclaimer MUST appear with any/all FrontRunners reference(s) and graphic use:
FrontRunners scores and graphics are derived from individual end-user reviews based on their own experiences, vendor-supplied information and publicly available product information; they do not represent the views of Gartner or its affiliates.
Providers listed as Runners Up were considered for inclusion in the quadrant, but were ultimately not included for one or more reasons: they did not have enough reviews; they did not meet the reviews score minimum; they did not meet the ultimate Value and Capability minimum scores; or they did not meet our functionality requirements for the market.
The enterprise resource planning (ERP) software market is large and complex. There are hundreds of vendors offering best-of-breed (i.e., stand alone) ERP applications or integrated ERP software suites. Additionally, many ERP software companies offer vertical market solutions to meet the unique requirements of specific industries, such as manufacturing, distribution, retail and others. We wrote this buyer’s guide to help organizations better understand how to select the best ERP system that suits their business needs.
Here’s what we’ll cover:
An enterprise resource planning system helps organizations track information across all departments and business functions, from accounting to human resources to sales and beyond. Common ERP functionality includes:
The term "ERP" took root in the U.S. around 1990 as a growing number of organizations required integration outside of—but not exclusive of—their manufacturing applications. They needed to share data from their MRP system with say, their financial accounting, customer relationship, supply chain or other applications. Enterprise planning software was introduced to describe a broader system that integrated each of these applications. The top ERP software packages will cover the following application categories.
|ERP Accounting||Accounting systems help organizations manage their financial transactions. At its core, it will have a general ledger, accounts receivable, accounts payable and payroll. Vendors often develop additional features and functionality to meet unique business and industry needs (e.g., Sage Nonprofit with fund accounting). Example vendors include Sage accounting software and Microsoft Dynamics.|
|Business intelligence||Business intelligence, as a term, gained widespread adoption in the late '90’s. However, the technology has existed in some shape or form since the '60’s. It is used to analyze and report business data to help companies make smarter business decisions. Core functions include analytics, data mining, reporting and more. An example vendor is SAP.|
|Customer relationship management||A CRM application is used to manage interactions with prospects, customers, clients and/or partners. It tracks activity across all departments: marketing, sales and service. Core applications closely align with these departments. They include sales force automation, marketing automation and service and support. CRM aims to increase customers, revenue and customer satisfaction. An example vendor is Oracle.|
|Human resources||Modern HR systems help organizations manage traditional HR activities such as personnel tracking and benefits administration, as well as new strategic HR initiatives like talent management, employee evaluation and learning management. Example vendors include Epicor and Lawson Software.|
|Inventory management||An inventory management program helps companies track up-to-date information about their product supply. Its aim is to maintain optimum stock levels so that companies avoid depreciation of inventory and overspending, and ultimately maximize profits. There are different types of inventory programs to meet the unique requirements of different industries and companies. For example, a food distributor will have different inventory management needs than say, an apparel retailer. Sample products include MAS 90 and 200 Software.|
|Manufacturing||We wouldn’t have enterprise resource software if it wasn’t for manufacturing resource planning software. Today, it’s at the core of many well-known ERP systems. Other manufacturing applications and/or modules include manufacturing execution systems (MES), bill of materials (BOM), product life cycle management and more. Example vendors include NetSuite, Infor and Sage.|
|Supply chain management||The supply chain management (SCM) application tracks goods as they move from manufacturing facilities to distribution centers to retail stores. Common applications include: supply chain planning to adjust inventory as demand changes; supplier management to monitor performance of suppliers; warehouse management to track placement of goods within a warehouse, and others.|
Before evaluating options and performing an ERP software comparison, you’ll need to determine what type of buyer you are. Over 90 percent of buyers fall into one of these three groups:
Enterprise resource planning systems buyer. These buyers require integration of data across all departments. They want to have everything in one system and avoid the technical challenges of integrating disparate applications. These buyers favor complete ERP solutions like SAP, Microsoft Dynamics, Infor, Epicor, Oracle and others.
Best-of-breed buyers. These buyers require a single component like a standalone CRM system or a HR system. They often need greater functionality and more features than what is offered in an integrated suite. Because of the functional depth these buyers require, it's important that they spend time evaluating reviews for specialized systems instead of integrated suites.
Small business buyers. A year ago analysts predicted that the average company would have 18 employees before adopting an ERP system. Five years ago the average number was 29. Statistics aside, more and more small businesses want to leverage ERP technology for better business performance. In the past, high upfront costs and technical challenges kept many small businesses out of the market. But with a growing number of cloud options, small business buyers have a new opportunity to implement enterprise-level technology. Of course there are still on-premise or client/server options still available for small businesses.
There are several trends playing out in the market. ERP software vendors are consolidating, adoption of software as a service (SaaS) is growing and more. Here we’ll highlight a few you should know about.
Vendor consolidation. The consolidation of ERP products isn’t necessarily a new trend. Mergers and acquisitions have always been a part of this market's history. However, the rate at which it’s taking place and the implications it has for buyers are worth mentioning. Large vendors continue to acquire niche vendors to round out their product lines, acquire excellent technology or to expand into new geographic markets. Buyers need to consider this when evaluating systems. In a worst-case scenario, their provider gets acquired, the product gets sunsetted and support and updates are no longer available. Avoid this situation by considering a vendor’s financial and strategic viability.
Adoption of software as a service. SaaS or Web-based ERP is an appealing alternative to traditional on-premise systems. The initial investment is lower, the implementation can be quicker, the user interface is familiar (it runs in a Web browser) and companies don’t need full-time IT staff to maintain servers and hardware. Most ERP vendors now offer—or have plans to offer—some kind of Web-based option.
Mobile app development. Vendors have responded to rapid growth in smartphone adoption by developing mobile interfaces for their ERP software systems. For example, Oracle already has a mobile client, so do SAP and Epicor.
Social media integration. Although very much in its infancy, many ERP companies are developing social media tools to keep abreast of the bigger trend playing out. Internal tools are being developed to foster greater collaboration among employees, while integration betwen ERP programs and outside networks such as Facebook and Twitter is also taking place.
ACCEO launches cloud-based ERP solution. ACCEO Solutions has launched a cloud-based ERP offering that is built on the Acumatica platform and targets the Canadian ERP market. The solution is the fruit of ACCEO’s OEM partnership with Acumatica.
Acumatica and Malaysia’s Censof sign deal to bring cloud ERP to Southeast Asia.Acumatica signed a long-term agreement with Malaysian financial management software vendor Censof Holdings Berhad (Censof) in September to offer ERP solutions in commercial and public sectors across Southeast Asia. The alliance gives Acumatica a competitive edge via quick access to the market. The companies hope to leverage cloud computing infrastructure, which is gaining traction in the region despite the current low adoption rates.
Anagram unveils cloud-based ERP system for UK small businesses. Anagram Systems launched a cloud-based version of Encore, its ERP software for small businesses. The service was developed keeping in mind the needs and limited budgets of businesses having 1-150 employees. It provides small businesses affordable access to advanced and secure hosting facilities as well as the full range of ERP capabilities.
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