SAP and Oracle on the ERP battlefield

Overview SAP and Oracle

In the implementation of the new ERP software, many CIOs will be the final choice to the two industry giants: SAP and Oracle. These two vendors are ahead of the market share and have a complete product line. Based on this situation, there should be no significant differences between SAP and Oracle in terms of product strengths, weaknesses, risks, and roadmap.

However, according to the 2014 Panorama Consulting Survey report (which studies thousands of ERP implementations worldwide and the results are quantified), there are significant differences in the implementation and use of SAP and Oracle users. For example, Oracle users are less expensive to implement, and SAP users get closer to the expected implementation time. This is just one of many discoveries.

Due to the various tradeoffs and options to consider, we have focused our comparison of the two scenarios in 5 ways: implementation risk, implementation cost and time, scalability, software functionality and customization, cloud scenarios. These aspects reflect the main differences between SAP and Oracle, and the difference in the direction of future development.

Implementation risk

Implementing risk is something everyone is concerned about. As a result, various methods and tools to reduce the risk of failure emerge. According to the figures shown in the survey, more SAP users consider their implementations to be unsuccessful. Moreover, SAP users are experiencing more operational disruptions when the system is online.

While SAP has a higher risk of implementation, in fact, each ERP users are faced with higher absolute risk. That's why SAP and Oracle have a lot to worry about in risk management mechanisms to reassure customers. For example, SAP's All-in-one products provide best practices and preconfigured solutions for each vertical industry, reducing risk and accelerating implementation. In implementing Acceleration, Oracle also provides similar tools, such as the Implementation Accelerator (Implementationaccelerators) and the user Productivity Kit, to improve testing, Efficiency and effectiveness of training and other key implementation processes.

Implementation cost and Time

From an enterprise's annual revenue (for public organizations, with a budget instead), the cost of SAP is higher. SAP users spend an average of 4% of the company's annual revenue, which is 1.7% for Oracle users. This difference may be due to the fact that SAP provides more functionality and is relatively expensive in terms of cost. In addition, the failure of several large corporate cases is also one of the reasons (such as waste Management, Hershey, Marin County and other cases).

However, cost is only one aspect of implementation. The CIO and the project team also attach great importance to the time spent on implementation, and at this point sap is doing better. Oracle's customers take an average of 22.5 months to implement, while the average SAP user spends 4 months less. In terms of time, SAP's pre-configuration and Oracle's accelerators can work, in addition to reducing risk, and helping to reduce the timing required for implementation.

Scalability

Almost all large and medium-sized organizations will focus on the scalability of ERP systems. After all, after years of business processes and systems segmentation and inconsistency, they expect enterprise software to become the backbone of operations supporting the growth of enterprises.

In this regard, SAP and Oracle are basically tied. In other words, for big, global companies, no matter which product they use, they can gain the scalability needed to support their development – most Fortune 500 companies are using SAP or Oracle products. However, according to the different needs of different enterprises, the extent of scalability is still a certain difference. Oracle has a variety of options to offer e-business Suite, Fusion, JD Edwards, Siebel, and Hyperion. And SAP is more independent research and development, give customers a more consistent sense of the whole. Companies that value consistency and standardization may think of SAP as more scalable, while those who prefer to focus on the paradigm will see Oracle's product suite as more resilient.

Software functionality and customization

Fundamentally speaking, the technical backbone of the ERP system is not the key point. Enterprise users are more focused on investments in functionality and operations promotion. From this point of view, both SAP and Oracle are committed to improving functionality. According to Panorama Consulting's survey, SAP is doing a better job of achieving the capabilities customers need. Oracle, on the other hand, can deliver faster returns to users.

Similarly, in the eyes of CIOs, the need for customization is equally important to ensure a better fit between ERP systems and operational requirements. Both SAP and Oracle have done a lot of work in this area. As mentioned above, Oracle's many options offer the convenience of project teams that don't want to be customized, and SAP's customization and integration tools give users more flexibility.

Cloud Solutions

For many organizations, the era of building large IT infrastructures to host ERP software and other enterprise applications is over. Instead, more and more businesses are migrating to the cloud – whether it's purely software-as-a-service (SaaS) mode or hosted by a third-party service provider.

In this respect, Oracle has a slight advantage. More Oracle users are leveraging the cloud platform to deliver more measurable business benefits to users of their cloud offerings. SAP's business One, once thought to be the most promising cloud for small businesses, is said to be on the verge of exiting the market – which could lead to a further lag in SAP. So, while two vendors have implemented the cloud delivery model, market data shows that Oracle is in a dominant position.

In-memory Technology

Over the past few years, SAP and Oracle have been advocating that their in-memory technology will change the future of ERP. With SAP Hana's "all-in-memory" technology, SAP is making significant progress in this area. A single platform is a huge advantage for SAP, but there are weaknesses, such as the cost of deployment and the lack of compatibility.

To meet the challenges of SAP HANA, Oracle has also invested a lot in in-memory systems and placed market segments on a high level of integration with customers ' existing databases and applications. For those who have a ready-made database system, this scheme has a significant cost advantage, but is less manageable than a centralized system.

Aside from the huge differences in technology implementations of the two vendors, the benefits to customers from SAP and Oracle are essentially the same. In-memory technology can improve the efficiency of ERP applications, accelerate the process of analysis, and ultimately bring higher productivity and deeper business insights to users.

Who is the best?

Although the above analysis of the various dimensions did not come to the conclusion of the merits and demerits, we hope to provide some practical evaluation options for potential ERP users. The specific circumstances of each company vary, with differentiated criteria and priorities, but the above analysis provides a concrete assessment of the reality. With both SAP and Oracle at their basic competency, the problem evolves: which product is best for the company to get the job done?