SAP versus Oracle
SAP VERSUS ORACLE 6
Whenchoosing an efficient and reliable ERP system, the primary factors toconsider should rotate around scalability, cost and duration, andrisk. In the ERP industry, there are two major players: SAP andOracle. This paper will, therefore, look at the difference betweenthe two renowned system companies and in the process recommend thebest option for the CIO. Many CIOs intending to introduce new ERPsoftware will end up pondering over these two industry giants. Whileboth service providers are the apparent market share leaders due totheir well-developed service lines, their strength, risk, weakness,and product roadmaps are almost similar.
Accordingto a report by PanoramaConsultingconducted in 2014, which reviewed quantitative outcomes from hundredsof ERP executions worldwide—Oracle and SAP clients, had varyingresults executing and adapting to the two products. The reportfurther narrowed down the difference of the two in five primaryareas: implementation duration and cost, implementation risk,software functionality and conversion, cloud adoption, andscalability. These fields give emphasis to the vast disparitiesbetween the two company products and their future projections.
Allbusiness executives are concerned about the likelihood ofapplication, which is why they always desire for new tools andmethods to help alleviate the probability of malfunction. Dataextracted from the Clashof the Titan`sreport shows these are definitely coherent apprehensions, with moreSAP clientele alleging their implementations were a failure thanOracle`s customers are. Furthermore, more SAP clients experiencedsome material operational disruption at the point of go-live, forinstance not being able to close the books or ship products. Variousstudies observe that SAP has a slightly higher-risk implementationreport than Oracle products, which mean that every ERP userexperiences an eminent level of risk. To avert these concerns, bothvendors have done exemplary well in developing new risk managementsystems. For instance, SAP has developed the All-in-one product thatfeatures pre-configurations and best practice methods for variousindustry verticals. The product`s intention is to accelerate theimplementation process while at the same time reducing risks. At thesame time, Oracle invented an almost similar system with its line ofexecuting accelerators and its UserProductivity Kitboth premeditated to make training, testing other vitalimplementation procedures more effective and efficient.
ImplementationCost and Duration
Whenlooking at an organization`s yearly income, SAP has emerged as thehigher cost alternative. Market analysts have observed that anaverage SAP client spends 4% of its annual proceeds on its entirecost of rights. In contrast, an Oracle customer pays 1.7%. This isdue to the breadth of functionality—and, therefore, highercost—associated with SAP`s software. Further, it could be anindication of large businesses botching their implementations of theproduct. Another major factor to consider when deciding on the ERP ofchoice is the implementation duration, a part that SAP excels. Oracletakes approximately 22.5 months to implement while SAP takes fourmonths lesser time to do the same.
Manylarger or mid-sized enterprises prioritize the scalability of theirERP systems. They look at their business software as the backbone oftheir operations that help in scaling and growing their companies,mostly after experiencing a period of inconsistent and fragmentedbusiness systems and processes. In this aspect, the two serviceproviders are equal, although for various reasons. The level ofscalability for a company depends on its core needs. Oracle hasdeveloped different products such as Fusion,E-Business Suite, Siebel and Hyperion, andJDEdwards.At the same time, SAP has mostly developed its systems from scratch,inventing more of a reliable and "single system"experience. Companies looking for scalability through standardizationand reliability may favor the use of SAP while those operating a moredecentralized model based on flexibility may prefer the adoption ofOracle set of products.
Softwarefunctionality and customization
Thetechnological backbone of a preferred ERP system does not matter.Instead, buyers of enterprise systems are more concerned withimprovements to their business operations and functionality. Whenmaking comparisons of the two products in this aspect, it is evidentthat both Oracle and SAP are keen on improving functionality.According to various reports, SAP customers experience more of theirexpected functionality and business benefits than Oracle clients do.On the other side, Oracle has a faster payback than SAP. Productsfrom both vendors are highly customizable to fit an organization`soperation needs.
Withthe onset of the cloud technology, many companies are transferringtheir storage options to the cloud. In this area, Oracle has a smalladvantage. More of its customers are leveraging cloud preferenceswith more of its cloud-based clients experiencing a more quantifiablebusiness benefit than SAP.
SAPis making enormous progress in its in-memory invention. SAP HANA, isdistancing itself as a highly well-designed "all –in-memory"method. However, its principal drawback is in the compatibilitylimitations and most importantly the cost of deployment. Incontrast, Oracle has greatly improved with its latest databasein-memory system touted as a highly functional and easy toincorporate into existent applications and compatible databases.However, it may not provide the neither the breadth nor theconvenience of a centralized system.
Asobserved above, both systems have their fair share of merits anddemerits. SAP is best in functionality and speed of implementationbut is higher in cost. On the other hand, Oracle is easy to set upbut takes long to show results albeit at a cheaper cost. Hence, theneed of an effective ERP is based on the financial capability of acompany and urgency of implementation of the system. Here, the CIOwill have to establish the exact needs of the company as well as itsfinancial standing to come up with a sound decision.
Nanayakkara,S., Perera, P., & Perera, A. Factors Influencing Selection andEffective Implementation of ERP Systems in Medium-SizedOrganizations in Developing Countries.