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Enterprise Resource Planning (ERP) 2018
Decision Insights Report
Author
Doug Tolley
Author
Sam Eaquinto
The enterprise resource planning (ERP) market has long lacked a clear performance leader, making ERP purchasing decisions difficult for provider organizations. Indeed, ERP solutions have long been a thorn in organizations’ sides as they are grueling to implement and are not often paired with true partnership from vendors. Many CIOs tell KLAS that switching ERP solutions is simply trading one set of problems for another—which is not a ringing endorsement for this market segment. As implementations of new EMRs begin to slow, provider organizations are asking what’s next. This sentiment, along with hospital and health system consolidation and the emergence of cloud technology, is driving much of the current buying energy around ERP systems. Cloud offerings—whether from established vendors or from new healthcare ERP entrants (like Workday)—are creating disruption. Which ERP vendors are capitalizing on this market energy while at the same time retaining/upgrading their existing customers and providing high customer satisfaction?
The A-List: High Energy, Retention, and Satisfaction
Workday has an above-average consideration rate, 100% retention among interviewed customers, and a KLAS satisfaction score well in the top quartile of all vendors KLAS measures. Both current and potential customers see Workday as innovative. Workday’s user-friendly interface is mentioned often as a key consideration factor. Provider organizations like Workday’s consultative approach and believe the vendor will eventually resolve the solution’s current maturity gaps. Workday currently offers procurement and inventory capabilities; however, customers note that end-to-end supply chain functionality is still missing. Workday has expressed a commitment to continue to invest in supply chain.
Who Has Market Energy?
Infor has strong buying consideration; their go-forward CloudSuite product is on the short list for two-thirds of the organizations KLAS spoke to, and Infor is the incumbent vendor in many of these decisions. CloudSuite demos well, and organizations are excited to see it in action. Infor's prior versions (v.9 and v.10) struggle in every area KLAS measures, scoring very low in overall customer satisfaction. Specific complaints about v.9 and v.10 include poor implementation experiences and excessive charges, concerns that are causing some customers to look at replacement options. KLAS performance scores do not include any feedback from CloudSuite users. KLAS is currently working to validate the CloudSuite customer experience.
About half of Oracle considerations are for the vendor’s new cloud offering. Current clients are concerned about the responsiveness of Oracle’s support team and don’t feel that Oracle really cares about their business. Provider organizations are not clear what Oracle’s go-forward ERP strategy is since the vendor offers both on-premises and cloud-based solutions. Some existing Oracle customers report being offered significant price discounts to convert to the cloud product. Current KLAS scores do not include feedback from users of Oracle ERP Cloud.
Premier’s service-oriented culture contributes to the vendor’s good customer satisfaction and very good customer retention. Clients like that Premier fulfills their report-writing requests. However, Premier is conspicuously absent from organizations’ consideration lists. Current and potential customers are not sure whether Premier is primarily a group purchasing organization (GPO) company or a software company. Premier’s lack of an HR/payroll system also hurts their consideration rate.
What Drives New Energy?
Given the buzz in the market about cloud-based ERP products, it isn’t surprising that technology is the third-most cited reason for why organizations chose their new vendor.
Workday’s considerations most often stem from the solution’s reputation for being easy to use. Existing Infor and Oracle customers are excited about the promise of these vendors’ new cloud offerings—incumbent vendors who have a new version or product are getting a legitimate opportunity to retain their customers.
When a vendor loses in this market, it is most often because of lack of functionality. Infor’s customers and organizations considering Infor mention the on-premises product’s user interface and implementation difficulties as reasons they look at other vendors. Workday prospects who ultimately choose another vendor often cite the product’s maturity level as the primary reason. Oracle customers who choose to look elsewhere often list price and general negative perceptions of Oracle as contributing factors. Although SAP is the largest worldwide ERP vendor, provider organizations wonder whether the vendor has a healthcare strategy.
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Movement to the Cloud: A Market Driving Force
One of the primary driving forces in this market segment is a move to cloud-based ERP products. Born in the cloud, Workday has disrupted the status quo. Infor CloudSuite and Oracle ERP Cloud are also helping drive movement away from on-premises software products. While Premier’s solution has always been a cloud-based solution, the company is not seen as innovative.
Absent from the cloud conversation are Kronos, SAP, GE Healthcare, Allscripts, and MEDITECH. As market energy shifts away from traditional on-premises products, these vendors could be left behind technologically.
To date, KLAS has verified fewer than 10 live customer experiences for Infor CloudSuite or Oracle ERP Cloud. In the first quarter of 2019, KLAS plans to publish a report on early implementations of these products and the successes and challenges of this seismic shift toward the cloud.
Cloud ERP Implementation Best Practices
Most HIT projects share some common best practices: delineate roles clearly between all stakeholders to create a written project plan, overcommunicate throughout the project, have a single, in-house point of contact, and test extensively before putting a system into production. Below are a few insights specific to cloud ERP implementations that KLAS has gleaned from interviews with CIOs currently in the middle of such projects.
Network compatibility and load testing are critical.
Test your endpoints thoroughly.
It might be tempting to skimp on this testing with cloud solutions, but bandwidth requirements can be substantial, and a network load test is critical to ensure that the production product will run at acceptable speeds. One CIO reported that his ERP system ran perfectly in the test environment but became unusable in production. In this case, the network infrastructure had to be upgraded before the ERP product could run at an acceptable speed, adding unanticipated cost and time to the implementation project.
What browser configurations and versions will people be using, what security policies are needed, and what mobile devices will people use to access the product? All possible access methods and configurations must be vetted. One senior IT leader found that an outdated security policy was preventing certain Internet Explorer users from accessing their cloud ERP solution. This unexpected hurdle took several days to resolve.
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“Infor really seems to be finding their groove a little bit with the changes they have made lately. There is a lot riding on their cloud offering.” —Very large IDN
“I know Oracle is trying to move to the cloud and that there are many customers moving that way with them. I hope that we can have some more options in the ERP market and see some disruption.” —Large hospital
“The Workday system helps us get things done. [Workday is] constantly adding new features. . . . They seem to be staying ahead of the curve, and this space is difficult.” —Large hospital
Decision Insights help provider organizations understand which vendors have market energy and why organizations are considering these vendors. Decision Insights are not designed to be a comprehensive census or win/loss market share study.
Designer
Natalie Jamison
Project Manager
Robert Ellis
This material is copyrighted. Any organization gaining unauthorized access to this report will be liable to compensate KLAS for the full retail price. Please see the KLAS DATA USE POLICY for information regarding use of this report. © 2024 KLAS Research, LLC. All Rights Reserved. NOTE: Performance scores may change significantly when including newly interviewed provider organizations, especially when added to a smaller sample size like in emerging markets with a small number of live clients. The findings presented are not meant to be conclusive data for an entire client base.