Every year Epicor publishes its Industry Insights Report. This year the report and the research behind it have a different and refreshingly new focus. It looks at what customers expect from ERP vendors and partners before, during and after the implementation of their ERP.
The findings also confirm that the move to the cloud for most manufacturers is inevitable, with 90% of firms worldwide saying the benefits of the cloud outweigh the migration effort. It is notable, though, that the effort is substantial, with implementation the biggest concern for firms in the ERP deployment process. While migration at 80% is cited as the biggest concern, eight concerns were separated by only 3%, and the survey did not include change management, frequently cited as a concern in other research.
At 34 pages in length, this is a substantive report. It has a welcome mix of data, graphics, analytics and customer quotes. However, the latter is more around how customers have solved issues using Epicor software rather than part of a qualitative survey. The report has different and interesting insights for readers compared to other research around ERP.
Steve Murphy, CEO of Epicor, commented: “Companies are setting a higher bar for their ERP providers to deliver on more than just the technology itself. Our annual study shows that customers want a provider that can not only tailor their solution to the industry-specific needs that fit the customer’s business but also collaborate closely throughout the entire purchase journey to provide transparency, strengthen onboarding and training, ensure dedicated support teams, and ultimately help realize meaningful business value. To do that, the ERP provider can’t just be a software expert, they must also act as a committed partner.”
What is in the report
Lisa Pope, President at Epicor, leads off the executive summary highlighting one of the key findings in the report. She states, “One significant finding is the difference between the beginning and later stages of working on digital transformation projects with software providers.”. It seems as though vendors engage well during the selling process, but after that, things often go wrong.
The report has six sections, topped and tailed by an executive summary and a conclusion. The six sections are:
- Understanding the customer journey
- The ERP journey
- Easing the move to cloud
- Industry knowledge and guidance
- Interoperability and data support
- Transparency and Training
The executive summary details the survey demographics (usually left to the end of a report). It highlights that 82% of respondents are using hybrid cloud ERP solutions. What is interesting and not highlighted is that the numbers have not changed much over the last year.
Pure SaaS deployments have only increased by 1%. The changes are minimal, though, and it is difficult to draw any conclusions from them. The survey is based on 1,350 ERP users from the US, UK, Australia, and New Zealand.
The remaining section titles vary from the index, but the content is fascinating. One caveat is that while the report looks at the care ERP industry, an important sector for Epicor in Australia, the sample size (2% – around 27) is very small and probably should not have been used in the report.
Some highlights
The findings probably make more interesting reading for ERP vendors and their partners and only confirm what customers already feel. However, there are insights for customers that should validate their position and give them valuable insights.
Customers are not happy. Only 43% strongly agree that they are loyal to their solution provider. In ANZ, that falls to 28% (though it has a small sample size). Perhaps surprisingly, 45% of customers actively consider a move to a new ERP every 1 to 3 years, with 25% looking every year and 6% looking every month!
One has to question the interpretation of the answers when considering the concerns raised by customers about any migration process. Is it financially viable to consider changing ERP every month, or is that just a desire? However, one of the reasons behind this is that many find the selection process relatively straightforward. 98% are confident of navigating the purchase journey.
The survey looked at the reasons for changing ERP, and the top four are worthy of note:
- Better functionality from another provider – 30%
- Integration challenges with new technologies – 29%
- More competitive pricing from another provider -28%
- Cybersecurity concerns – 27%
What is interesting is that although 93% of customers agree they feel like their ERP vendor is a partner to the point of purchase, it can deteriorate after that. The survey did not ask the same question at the different stages of the process, though. The authors identified those processes as sales, planning, implementation, go-live, and ongoing support.
ERP vendors and their partners need to improve how they work with customers after the sales process completes to improve loyalty. The report looks at the concerns customers face at each phase and concludes with five wants they expect from their vendors:
- Industry-Specific Knowledge and Guidance
- Interoperability and Data Support
- Staff Training and Materials
- Greater Transparency around pricing and security
- A consistent partnership throughout the ERP lifecycle.
Epicor steps up
In conclusion, Epicor explains how it meets the needs of its existing customer base. With clear explanations of how it has evolved to become a true cloud vendor. It is only the omission of details around its customer success program and explanation of how its partners can fill some of the partnership consistency does the report let itself down slightly.
Epicor has been able to draw upon a wide customer base to evidence its claims, with Nicholas Mueller, Director of ERP Systems at Enjet Aero, stating: “The move to the cloud has been a game-changer for us. Within two days, I can have a new company set up and give it immediate access to everything Enjet. We can share data freely and get it up and running as a supplier to our other sites, which has alleviated supply chain issues. In addition, all sites are automatically updated to the latest version at the same time.”
Enterprise Times: What does this mean
This report is worth a read, not just by prospects but also by the wider industry. There are some interesting insights that many should take note of. Integration, the flexibility of both product and vendor, security, consistency and transparency are all important to customers.
One of the most insightful comments in the report is near the end, where the authors state: “Customers that acquire post-go-live support get more from their ERP solution, bolstering partnerships and customer retention.”
This is the reality for cloud-based ERP. Vendors need to remember that subscription services mean it is not just the right to use but also a service offering. Customers need to equally demand a service. It is a service that they need to put effort into as well. That Epicor used the word partnership is telling. A partnership infers both sides participating and spending effort. It is a change for many traditional ERP vendors and customers that expect software to run.
