What’s Changed: 2023 Gartner Magic Quadrant for Cloud ERP for Service-Centric Enterprises

The editors at Solutions Review highlight the key takeaways in the 2023 iteration of the Gartner Magic Quadrant for Cloud ERP for Service-Centric Enterprises and analyze the new report.

Gartner has recently released the 2023 version of its Magic Quadrant for Cloud ERP for Service-Centric Enterprises. According to Gartner, “a service-centric cloud ERP solution as a suite that is marketed and sold as an integrated product that provides at least three of the following: Financial management system (FMS) functionality, including general ledger, accounts payable (AP), accounts receivable (AR) and financial planning.” These solutions are generally used by companies in the professional services, healthcare, media, financial services, non-profit, real estate, and telecommunication industries.

The researchers behind the report—Denis Torii, Sam Grinter, Tim Faith, Naveen Mahendra, Neha Ralhan, and Robert Anderson—evaluated the strengths and weaknesses of each provider listed and ranked them on the signature “Magic Quadrant” graph, which provides readers with an illustration of each vendor’s ability to execute their vision. The diagram includes four quadrants: leaders, challengers, niche players, and visionaries.

What’s Changed: 2023 Gartner Magic Quadrant for Cloud ERP for Service-Centric Enterprises

As the ERP market evolves, Gartner adjusts its criteria to evaluate providers, which means the vendors listed on this year’s report are slightly different from last year. For example, Infor is no longer listed as it recently announced a shift in its go-to-market approach and did not reach the criterion for the number of live customers with annual revenue of more than $75 million. A breakdown of each category and the companies associated with it is below.

Leaders

Oracle is the top Leader in this year’s Magic Quadrant. Its solution, Oracle Fusion Cloud ERP, is a modular, configurable SaaS platform for upper-midmarket and large-enterprise service-centric organizations across the Americas, EMEA, and Asia/Pacific regions. Its strengths as a vendor include its collection of financial management, analytics development, procurement, third-party resource management, xP&A, project management, data integration, and extension development capabilities. Oracle also earns points for its industry-specific support services, bolstered by its acquisition of Cerner in 2022.

Workday retains its position in the report with the Workday Enterprise Management Cloud solution, which targets upper-midmarket, large, and global organizations. The fully cloud-based platform provides users with embedded industry-specific capabilities for select industries, extended capabilities via partnerships, and machine learning-driven technologies. For example, its differentiating strengths include its extended planning and analysis tools, human capital management offerings, and financial management capabilities.

SAP closes out the category with the public edition of S/4HANA Cloud. This solution targets midmarket, large, and global enterprises in the Americas, EMEA, and Asia/Pacific. The public edition of the platform is a fully managed SaaS cloud solution sold directly to customers and via implementation partner channels. Gartner identifies its strengths as its financial management product vision, its enablement of continuous improvement efforts, and its services for managing procurement, third-party resources, and assets.

Challengers

Oracle NetSuite is the first and only Challenger in Gartner’s report. The ERP solution suite is a fully managed cloud SaaS platform that runs exclusively on Oracle or NetSuite-owned data centers. Notable features include its global presence, embedded localization offerings, professional services automation tools, pre-configured implementation templates for multiple service-centric businesses, and recently released data warehouse, analytics, and workforce management capabilities tailored for service-centric enterprises.

Niche Players

SAP Business ByDesign is the company’s second solution listed and is once again a Niche Player. The fully managed cloud platform targets mid-market organizations across America, EMEA, and Asia/Pacific. Native capabilities include financial management and procurement applications bolstered by the company’s partner network. Other strengths include its professional services, customization offerings, access to AI capabilities, and its ability to be used as an ERP for smaller businesses.

Sage is the next vendor listed. Its Sage Intacct solution focuses on lower, mid-market organizations in North America, although it has a growing presence in European countries. Sage Intacct is a fully managed cloud solution that primarily provides users with financial management applications. Alongside its financial functionalities, Sage Intacct received high marks for its HR and project management capabilities and its Sage Intacct Budgeting and Planning, a native FP&A solution seamlessly integrated into the platform.

Microsoft earns its spot in the Niche Player category with the Dynamics 365 Business Central solution, which equips lower mid-market companies with a fully managed cloud solution delivered via Microsoft’s data centers. Strengths include its market positioning as a horizontal solution for basic accounting requirements, its growing market momentum, and the integration opportunities it offers with offer Microsoft solutions, including Microsoft 365, Power BI, Teams, Power Platform, and Dynamics 365 CRM.

Certinia, formerly FinancialForce, also retains its place as a Niche Player. It provides a fully managed cloud SaaS solution for companies in the Americas and EMEA, with some in the Asia/Pacific markets. One of the platform’s strengths is its use of the Salesforce platform, as it allows the software to pull from its services, including Einstein Analytics. Other strengths include its project-based capabilities, financial functionalities, and Multi-Revenue Billing solution, which provides native billing features for handling revenue streams and structures.

Visionaries

Microsoft closes out the report with Microsoft Dynamics 365, a cloud SaaS solution suite hosted as a managed service by Microsoft and its partners. It’s aimed at midsize to large global service businesses worldwide. Most of its ERP components are developed natively and include project task management support, AI, generative AI, and xP&A capabilities. Strengths include its enterprise-level financial management capabilities, Microsoft Azure platform capabilities, out-of-the-box integrations with other Microsoft applications, and procurement tools.