Back-office ERP systems are gaining strategic importance as organizations seek to digitize and automate business processes, modernize their application stack, migrate to the cloud, and accelerate the speed of business.
In its latest MarketScape on worldwide SaaS and cloud-enabled large enterprise ERP, IDC says, “The pace of innovation is increasing, and ERP vendors focused on AI, ML, natural language processing (NLP), chatbots, robotics process automation (RPA), and genAI are critical partners to consider for the digital future. This innovation will reset the use of ERP systems for years to come. By 2028, 85% of enterprises using intelligent applications will have evolved to run as autonomous organizations, redefining the technology resource usage within the business.”
Anchoring the organization to their ERP system and then extending into industry differentiation is quickly becoming the norm, says IDC. The extension of the ERP into additional applications is quickly reshaping both the organization’s and the end user’s usage and reliance on technology. For example, autonomous processes are removing the need for additional employee clicks and decision points, quickly transforming the business experience.
Selecting and implementing the right ERP system is critical. IDC finds that by mid-2024, 30% of global organizations will take advantage of human-like interfaces in their enterprise applications to gain more insights quickly, improving decision velocity. And by late 2024, 70% of the Global 2000 will focus on reducing the process time between events and decision-making to gain a competitive advantage.
This list of 10 most powerful ERP vendors takes into consideration that, for most enterprises, selecting a vendor runs across two main axes: the size of the organization, and the specific ERP modules required. Some ERP vendors focus on the SMB market; others are built to accommodate the requirements of the largest, global enterprises. Some vendors focus on the accounting, finance, and HR aspects of ERP (Workday, Sage); others are designed for product-centric industries such as manufacturing (Epicor, IFS).
One thing all vendors can agree on? The need to embed generative AI functionality into their ERP systems. Some vendors — Microsoft with Copilot, for example — have gotten a head start out of the gate; others are playing catchup.
In terms of market share, there’s a clear demarcation between the Big 3 — SAP, Oracle, Microsoft — and everyone else. The Big 3 strive to offer the broadest suites of ERP offerings, whereas smaller competitors try to differentiate themselves with deep insight into business processes for specific vertical industries.
1. SAP: Restructuring to target AI
Why they’re here: Pure-play powerhouse SAP is the runaway market share leader with a vast installed base of large enterprise customers. Through deep discounts and other incentives, SAP is successfully moving customers from its rigid on-premises ERP platform to the S/4 HANA Cloud, a fully managed SaaS solution with modules that cover all of the ERP bases.
Power moves: Not resting on its laurels, SAP has announced a company-wide transformation program and restructuring aimed at strategic growth areas, particularly AI.
By the numbers: 8,000: The number of positions that will be affected by the restructuring. SAP says it will reach that number through voluntary leave programs and internal reskilling.
Outlook: On April 22, SAP announced that first quarter revenue soared 24%, driven by a 32% increase in Cloud ERP Suite revenue. Profits were up 27%. CEO Christian Klein says, “We’re off to a great start in 2024 and we’re confident we’ll achieve our goals for the year. Looking ahead, we have powerful growth drivers in place — Business AI, cross-selling across our cloud portfolio, and winning new customers particularly in the midmarket. The strength of our current cloud backlog reaching a record growth rate is a testament to that momentum. Our transformation program is also well on track and will help us to capture this growth and increase efficiency.”
2. Microsoft: Powerful integration of genAI features
Why they’re here: Gartner puts Microsoft in the visionary category in its latest Magic Quadrant for ERP systems for service-centric organizations. Dynamics 365 is primarily a SaaS solution hosted as a managed service. The advantage Microsoft has is that it has integrated its ERP capabilities with the rest of the Microsoft ecosystem, including the Azure cloud and applications such as Power BI, Power Apps, and Dataverse. In addition, Dynamics 365 is both an ERP and a CRM, which creates integrations across sales, marketing, and customer service.
Power moves: On April 12, Microsoft announced its first price increase for Dynamics 365 in five years.
By the numbers: 17%: The per-user, per-month price increase for Dynamics 365 modules for ERP features like supply chain management and finance.
Outlook: Microsoft Dynamics 365 has a lot going for it; it can be deployed either on-prem or in the cloud, it has a mobile app, and it has a powerful integration with the rest of the Microsoft productivity suite, which is pretty ubiquitous across enterprises. Through its close relationship with OpenAI, Microsoft has been an early adopter of genAI technology. Microsoft Copilot AI is being embedded in everything, from its Bing search engine, to Office 365, to Dynamics 365 CRM and ERP applications. This provides customers with the ability to leverage the power of genAI across the enterprise business processes.
3. Oracle: Two-headed ERP monster
Why they’re here: Oracle’s one-two punch of Oracle Fusion Cloud ERP for the largest of enterprises and Oracle NetSuite for smaller companies gives the company a unique market position. Gartner puts Oracle Fusion Cloud ERP in the Leader category for its modular and configurable ERP offerings that can run in Oracle data centers, in the Oracle cloud, or at customer sites.
Power moves: The acquisition of Cerner in 2022 significantly boosted Oracle’s ability to deliver ERP software in the healthcare market.
By the numbers: In its latest earnings report (March 11), Oracle said third quarter Fusion Cloud revenue hit $800M, up 18%, while NetSuite revenue was also at $800M, up 21%.
Outlook: While some ERP vendors have a powerful lineup of service-centric ERP modules (accounting, finance, HR), and others specialize in product-centric ERP (procurement, logistics, supply chain), Oracle is a leader in both categories, with a comprehensive suite of capabilities.Oracle has also jumped headlong into AI, providing industry-specific AI capabilities. And it has all market sizes covered, between Fusion Cloud and NetSuite.
4. Infor: Industry-specific solutions
Why they’re here: Infor doesn’t shy away from competing against the top players for the biggest accounts. Infor’s differentiator is its industry-specific ERP solutions that combine technology with invaluable knowledge of how business processes work in industries ranging from healthcare to aerospace. Says Forrester analyst Liz Herbert, “Companies that are on the larger side generally get attracted to Infor because they find it to be a good solution that is more affordable, and also a vendor that is easier to do business with than SAP or Oracle but still has credibility and proof points in large and global enterprises.”
Power moves: On April 9, Infor announced the launch of Infor GenAI and ESG Reporting to help organizations harness the power of AI to help improve productivity and report on sustainability.
By the numbers: More than 60,000 organizations across 175 countries rely on Infor ERP.
Outlook: The latest IDC MarketScape puts Infor in the leadership category. IDC says, “Infor’s cloud ERP solutions deliver industry-specific capabilities without extensive customizations or integrations by combining the Infor cloud platform built on Amazon Web Services (AWS) and Infor OS innovation services.”
5. Workday: Managing human capital
Why they’re here: Workday is a Leader in Gartner’s Magic Quadrant for service-centric ERP with its focus on HR (Workday Human Capital Management) and financial management (Workday Accounting Center). The Workday Enterprise Management Cloud is aimed at upper-midmarket, large and global organizations, but also has many customers with annual revenue of less than $150 million, says Gartner.
Power moves: In February, Workday announced the acquisition of HiredScore, a leading provider of AI-powered talent orchestration software.
By the numbers: Total revenue for fiscal 2024 hit $7.3 billion, an increase of 17% from fiscal 2023.
Outlook: Workday has new blood in the corner office. Carl Eschenbach, a former VMware exec, became co-CEO in 2022 and took over as sole CEO on Feb. 1. Under his leadership over the past couple of years, Workday has accelerated its innovation with a number of product announcements, and bolstered its partner ecosystem.
6. Epicor Software: Focusing on ‘cognitive ERP’
Why they’re here: Epicor’s Industry ERP Cloud provides industry-specific packages: Kinetic for manufacturers; Prophet 21 for distributors; Eagle and Propello for retailers. Most of Epicor’s customers are midsize companies in automotive, building supply, distribution, manufacturing, and retail verticals. Epicor’s roadmap focuses on AI-enabled supply chain data and analytics, including the use of genAI and sustainability capabilities.
Power moves: On April 9, the company announced that it had surpassed $1B in annual recurring revenue.
By the numbers: In fiscal 2023, Epicor reported 42% year-over-year growth in SaaS-based cloud revenue.
Outlook: Epicor boasts a composable platform that leverages Microsoft Azure for infrastructure services that include integration, low-code and full-code development, AI/ML capabilities, and analytics. Epicor is reimagining how ERP software can serve the essential industries through the power of artificial intelligence, in what it calls cognitive ERP. “The expectations for how ERP will deliver value through AI are quickly changing,” says Vaibhav Vohra, Epicor chief product and technology officer. “This isn’t merely about adding another tool into the tech stack — we believe cognitive ERP will fundamentally transform how businesses operate by embedding contextual intelligence and advanced automation into the very core of their operational workflows. In short, we see ERP itself moving from a system of record to a system of action.”
7. IFS: Manufacturing innovation
Why they’re here: The IFS Cloud is a powerful ERP system targeted at manufacturing, aerospace, defense, construction, engineering, energy, utilities, food and beverage, and chemical industries. Customers are primarily midsize, but IFS also competes for business from the largest enterprises as well. Listed as a visionary in Gartner’s Magic Quadrant for product-centric ERP, IFS invests heavily in manufacturing-centric features such as digital twin, smart factory capabilities, and shop floor integrations for real-time planning and execution.
Power moves: On Jan. 9, IFS named Mark Moffat, who had been chief customer officer, the new CEO. Moffat takes over from Darren Roos, who has been appointed as the company’s board chair.
By the numbers: First-quarter 2024 recurring revenue was up 26% year-over-year, according to results announced on April 25.
Outlook: IFS has been successful moving its customer base to the cloud and is posed for a growth spurt based on the company’s ability to deliver solutions targeted at specific use cases, such as supply chain or connected workers. Moffat adds that AI will be a big part of the future: “Industrial AI is a huge opportunity for our customers, and we are uniquely positioned to help them harness its potential. We have been developing industry-specific AI solutions that integrate seamlessly with our existing products and leverage the data we have to deliver game-changing outcomes.”
8. Sage: Accounting and finance for SMBs
Why they’re here: Sage is a leader in ERP systems focusing on accounting, finance, HR, and payroll for small and midsize businesses with its two product lines, Sage Intacct and Sage X3. Sage’s ERP is cloud-based and the company offers services to help organizations migrate their apps to the cloud.
Power moves: At its annual conference, Sage Transform 2024, the company unveiled Sage Copilot, its AI-powered productivity assistant and product enhancements to Sage Intacct.
By the numbers: Sage Group PLC reported a 10% increase in revenue for its latest quarter, including a 13% jump in North America.
Outlook: Sage continues to expand its product portfolio, moving into new vertical markets such as construction and real estate. It also has a seemingly endless supply of potential new customers — small and midsize businesses that recognize the need to digitize manual processes and take advantage of automation and the capabilities of AI to improve core business processes.
9. Acumatica: A modular approach to cloud ERP
Why they’re here: Acumatica is a leader in the SMB market, with its industry-specific modules for manufacturing, construction, distribution, retail, and general business. Acumatica is cloud-only, and its strength is the modular nature of its architecture, which enables customer to select only the capabilities it needs.
Power moves: Acumatica announced earlier this year that it is adding professional services functionality to its cloud ERP platform. The Professional Services Edition includes new features aimed at customer service and customer lifecycle management.
By the numbers: Fast-growing Acumatica says it now has more than 10,000 customers.
Outlook: Chief Product Officer Ali Jani says the Professional Services Edition will be valuable as industries blur together and companies take on new processes and functions. He adds that AI and related technologies such as analytics are going to be an integral part of enterprise applications going forward. Forrester analyst Liz Herbert says, “Acumatica competes already with NetSuite in a lot of sectors, and NetSuite will probably continue to be the most likely competitor as they further their journey into the professional services sector.”
10. QAD: Manufacturing and supply chain innovation
Why they’re here: QAD is a visionary in Gartner’s Magic Quadrant for its Adaptive ERP product suite that provides administrative and operational ERP capabilities on a single platform. QAD primarily targets six manufacturing sectors: automotive, consumer products, food and beverage, high tech, industrial, and life sciences.
Power moves: QAD acquired Redzone workforce software that connects employees on the factory floor.
By the numbers: $1B: The estimated amount that QAD paid for Redzone.
Outlook: QAD CEO Anton Chilton says, “With the addition of Redzone, QAD now has a complete end-to-end solution for manufacturers to fully realize the potential of the adaptive enterprise, from the shop floor to the top floor, and from supplier to end customer.” QAD recently announced the launch of its Industrial Transformation Platform, an initiative aimed at optimizing people, processes and systems in manufacturing and supply chain scenarios.
