“Also critical is the ERP vendor – you ultimately have a choice between different go-to-market models, which are typically split into Tier 1, 2 and 3:
Traditionally sold as enterprise-ready ‘big’ ERP that is suitable for large multi-site corporations and is usually highlighted as the most expensive option.
Touted by some as the ‘sweet spot’. ERP systems here tend to be not too large or expensive – meaning they have many features of Tier 1 systems without the complexity.
Often considered to be made up of ‘niche’ vendors that specialise in certain industries, or are just smaller, but perhaps, ambitious ERP software houses.
“It is quite simple why some vendors are more expensive, as the more complex the software, the more complex the support. However, it will also likely be the case that larger vendors may invest a great deal more in development resources than smaller ones. This means that larger vendors have more functionality and regular updates, including security vulnerability patching.”
Another area of consideration for businesses is delivery models. There are typically two main types that dominate the ERP landscape, here’s Martin on vendor delivery and partner delivery:
On Vendor Delivery:
“Not only does the company write the software, but they also implement and support throughout and post-implementation. What are the benefits of this? Well, you are likely to be a bigger fish in a smaller pond, as well as influencing the development of the software in the future, and you’ll most likely be looked after very well. If the software is more niche, it will certainly be tailored to your industry and may require less customisation than Tier 1 and Tier 2 (which can be expensive).
“The downside? Well, given that they may deliver the implementation and support all by themselves, the relationship between the two parties must be strong. If you fall out with them, your choices are limited to living with or changing the system, which could result in a brand new ERP implementation.”
On Partner Delivery:
“With Tier 1 and 2 the model is, except for larger implementations, to deliver through a partner model. The advantage of this is that you have choice. If
the partner you are working with does not have the specific industry knowledge you need, or you simply do not get on with the other party, then you can find
someone else and not have to ditch the current ERP project.
“On the other hand, it is more likely going to be a more expensive option and you will have very little, if any influence on the vendor. This doesn’t necessarily matter as the software should be expansive enough to meet your needs – and if you do require something unique or bespoke, you’ll likely be able to find a partner that can develop a custom solution that will work within your ERP system.”
Cloud software and computing have experienced a great boom over the last few years. The flexibility provided by the Cloud, gives users more options in utilising and making the most of this specific type of software. Of course, this applies to ERP too. But how can on-premise or Cloud ERP systems help a business? Martin explains: