We regularly work with a number of leading ERP software solutions including SAP, Oracle, and Microsoft Dynamics ERP. As we’ve outlined in other blogs and research, each software solution has its strengths, weaknesses, and tradeoffs.
SAP, which leads the ERP market in terms of market share and install base, is typically considered one of the three leading ERP solutions. In addition to our client experience with SAP, we also recently compared the product to other leading enterprise software packages as part of our 2008 benchmark study of over 1,300 ERP implementations across the globe. More recent data from our 2010 ERP Report will be made available in the coming weeks.
In the meantime, some of the findings we discovered from our experience and research with SAP include:
- SAP is installed by 35% of organizations that use an ERP software solution.
- Its product line is evaluated, selected, and implemented in an average of just under 20 months; very close to the average of other solutions.
- SAP implementations have the lowest level of business risk expressed in terms of companies that experience a material operational disruption at go-live.
- The software has the highest levels of satisfaction and business benefits realized compared to other ERP software vendors.
However, in addition to the above strengths, there are two key tradeoffs to consider when evaluating SAP as a potential option:
- SAP implementation durations have the highest degree of variability of all the solutions in our study.
- The total cost of ownership averages $16.8 million for the initial investment, or 18% of the implementing company’s annual revenue. Both numbers are significantly higher than other solutions.
The point is not to suggest that SAP is better or inferior to other enterprise software solutions, but rather to provide one data point as part of a robust ERP software selection process. While this provides useful information on the surface, it is also important to consider business requirements that are unique to your business, understand the key functional and technical differentiators, and assess the overall fit with your organizational and operational needs.