The SAP vs. Oracle debate is common among large, complex companies. Clients often ask us, “which is the better ERP software system?” Of course, as an independent ERP consultant, we determine the best fit for our clients based on their unique business requirements. However, we’d still like to provide a comparison of SAP and Oracle based on industry benchmarks and client experience.
A Brief Overview of SAP and Oracle
SAP primarily builds its products from the ground up rather than through acquisition. The vendor targets companies with at least $1 billion in annual revenue. SAP ERP software has deep functionality, so it requires a very technical, time-consuming implementation.
S/4HANA Cash Application enables real time, intelligent invoice-matching powered by machine learning.
Oracle’s primary strength is acquiring product lines that can provide flexible functionality to a variety of industry niches. However, niche functionality is still transitioning from EBS and JD Edwards into Oracle’s newer products. Oracle targets companies with at least $750 million in annual revenue.
Oracle Business Intelligence 12c provides seamless analytics across cloud and on-premise solutions.
Both SAP and Oracle provide a full business suite of solutions, including HCM software, CRM software, SCM software, etc. Both vendors were featured in our manufacturing ERP report and distribution ERP report on the top ERP systems for those industries. The vendors in these reports have robust supply chain management and inventory management capabilities. They also offer strong production management software.
SAP vs. Oracle Case Study
SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.
Panorama Client Experience With SAP and Oracle
Based on our experience evaluating and implementing these ERP solutions for clients, we’ve gleaned some interesting insights:
We help clients create requests for information (RFIs) to send to ERP vendors. These RFIs list the client’s business requirements in detail. Vendors must indicate if (and how) their solution can fulfill each requirement. Below are examples of some of the requirements fulfilled (or not fulfilled) by various SAP and Oracle products. It is broken down by functional area:
Business Requirement: The ability to support manufacturing production management.
Business Requirement: The ability to auto-recommend warehouse staging location for products based on delivery (ship-via) type.
Finance and Accounting
Business Requirement: The ability to support user-configurable invoice structure.
Business Requirement: The ability to track historical product pricing at the customer level by sales rep (user).
Business Requirement: The ability to create and display user defined hierarchies for dashboards and reporting purposes.
Business Requirement: The ability to support integration with external benefits platforms.
As you can see, SAP and Oracle can both support a variety of business requirements with minimal software configuration. These are the kind of answers companies want to see in a RFI response. Even if some configuration is required, it is greatly preferred to software customization, which SAP and Oracle both strongly recommend against.
The products mentioned above are not the only products these vendors offer. You can find a complete list in our vendor database.
We regularly coordinate ERP vendor demonstrations for clients. After each demo, clients score functionality on a scale from 1 to 5. The highest score a vendor can receive is a 5. The following metrics are based on clients’ ratings of SAP and Oracle across a variety of products during the last two years:
SAP and Oracle Products Scored Closely in These Areas
Demand Forecasting – (SAP) 2.3 / (Oracle) 2.2
Industry Intelligence – IBM partnered with SAP to create a Cognitive Demand Forecasting Solution for the retail industry. The solution can be integrated into SAP S/4HANA and the SAP Customer Activity Repository. Oracle Demand Management Cloud is a supply chain management solution that accurately predicts customer demand for a broad range of industries.
Material Requirements Planning – (SAP) 1.8 / (Oracle) 1.9
Industry Intelligence – SAP recently updated its material requirements planning (MRP) capabilities within SAP S/4HANA. Oracle NetSuite also has recent updates to its MRP.
Fixed Asset Management – (SAP) 3.3 / (Oracle) 3.3
Industry Intelligence – SAP Business One has a fixed asset management function that eliminates the need for repetitive manual data entry. Oracle NetSuite Fixed Asset Management automates asset acquisition, depreciation, revaluation and retirement.
E-Commerce – (SAP) 2.2 / (Oracle) 2.2
Industry Intelligence – SAP Upscale Commerce allows manufacturers and merchants to quickly launch “pop-up” e-commerce stores. Oracle Commerce On-premise, has likely stopped releasing updates. However, Oracle Commerce Cloud is frequently updated, with its last update this month.
SAP Products Scored Higher in These Areas
Multi-Currency – (SAP) 3.0 / (Oracle) 2.7
Industry Intelligence – SAP ECC has improved precision in currency conversion of foreign exchange rates.
Audit Management – (SAP) 3.8 / (Oracle) 3.4
Industry Intelligence – SAP Audit Management instantly captures audit documentation while providing drag-and-drop tools. You can access the application through mobile devices.
User-Defined Dashboards – (SAP) 3.9 / (Oracle) 1.4
Industry Intelligence – Not all BI vendors provide user-friendly dashboards. However, SAP BusinessObjects allows you to create interactive, role-based dashboards accessible from any device. An alternative is SAP Analytics Cloud, which allows you to easily create predictive models and integrate them into workflows.
Oracle Products Scored Higher in These Areas
Workflow Configuration – (SAP) 2.9 / (Oracle) 3.3
Industry Intelligence – Oracle has a new set of artificial intelligence applications that automate processes within its cloud suite.
Customer Contract Management – (SAP) 3.0 / (Oracle) 3.7
Industry Intelligence – Oracle Project Contract Billing Cloud provides pre-built templates and automates project billing. The application ensures contracts are compliant with project billing requirements.
Purchasing – (SAP) 2.8 / (Oracle) 3.3
Industry Intelligence – Oracle Purchasing Cloud automates routine transactions, such as invoice validation. The application fully integrates with accounts payable modules.
Quality Assurance – (SAP) 2.1 / (Oracle) 3.1
Industry Intelligence – Oracle Product Lifecycle Management Cloud allows you to define inspection plans by connecting product design standards and quality specifications.
While these scores are just averages of more detailed metrics, they show the perceived strengths and weaknesses of each ERP system. Demo scores are one of several factors to consider during an evaluation of SAP and Oracle.
SAP and Oracle both have products with multiple deployment options. They typically encourage our clients to consider cloud-based technology even if they’ve expressed interest in on-premise technology.
Focusing on cloud ERP is a smart move for SAP and Oracle as the market is increasingly demanding flexible deployment options. However, we’ve found that neither SAP nor Oracle have very many references for cloud implementations at large, complex companies.
While SAP and Oracle aren’t likely to go out of business any time soon, they occasionally discontinue certain products.
SAP S/4HANA is a fairly new platform for SAP. The product has strong R&D funding as does Oracle ERP Cloud. However, R&D spending on Oracle EBS on-premise, is waning as the product is moving exclusively to the cloud. It’s difficult to find technical resources to implement EBS on-premise as most Oracle system integrators are focused on the cloud.
Want to learn more? Our SAP vs. Oracle white paper features a case study on a client in the distribution industry.
ERP Industry Benchmarks
When evaluating ERP vendors, it can be helpful to consider industry benchmarks and independent research. Our comparison report, 2019 Clash of the Titans, provides benchmarks on some of the challenges companies experience when implementing SAP or Oracle:
ERP Implementation Duration
According to our report, SAP projects last around 14.7 months, while Oracle projects take about 12 months. One possible reason that SAP projects take longer is because its clients are typically global and complex companies. These companies choose SAP because of its scalability and robust functionality. Global ERP projects naturally require a longer time commitment due to the number of locations and decisions about standardization vs. localization.
ERP implementations can cause operational disruptions, such as the inability to manufacture or ship products.
Disruptions that occur during SAP projects last about 128.5 days, while disruptions that occur during Oracle projects last about 121.7 days. This might reflect the fact that SAP works with large companies with complex, global operations. An operational disruption at a large company can affect multiple locations, which can take more time and effort to resolve.
To reduce the risk of operational disruption, companies should take a phased implementation approach. It’s also wise to conduct multiple conference room pilots before go-live.
Internal vs. External Resources
Resource allocation is one of the most common struggles for companies implementing enterprise software. While ERP vendors typically recommend at least eight to twelve full-time internal resources, this isn’t feasible for most companies. Many companies heavily rely on external resources from the vendor and systems integrator. Unfortunately, this increases implementation costs.
Companies implementing Oracle use slightly more internal resources than companies implementing SAP. In both cases, respondents reported that their team was almost an even split between internal and external resources.
Complex customization is a major reason why companies rely on external resources. Oracle is a flexible solution that typically requires simple customization and configuration that can be done in-house.
Role of ERP Software in Companies’ Digital Strategies
More than half of SAP customers reported that their ERP project played a significant role in their digital strategies. However, this was true for less than half of Oracle customers.
Oracle’s marketing strategy seems to focus on promoting specific modules, such as finance. This might attract more companies looking to automate particular processes and fewer companies looking to transform their entire operating model.
Summary of Results
SAP and Oracle both provide robust ERP systems that can transform your company. These benchmarks don’t prove one vendor is better than the other, but highlight challenges companies may face.
Diving deeper into these challenges, it’s apparent that they’re not caused by technical shortcomings. Both of these vendors provide value to companies that understand how enterprise resource planning software aligns with their goals.
The Final Decision: Oracle vs. SAP
Comparing Oracle and SAP requires an in-depth understanding of software capabilities, deployment options and vendor and product viability. An informed decision also requires business process reengineering and requirements definition prior to selection. Armed with this insight, a company can decide whether SAP, Oracle or another system altogether best fits their business needs.