Most clients we work with either evaluate or implement the four leading Tier I ERP vendors in the market. This week, we released our 2016 Clash of the Titans Report, which compares actual results from over 500 different SAP, Oracle, Microsoft Dynamics and Infor implementations across the globe. The report contains some interesting findings, especially for those about to embark on an ERP selection and implementation project involving one of those ERP systems. Here are some ERP Lessons we learned in this new report:
SAP: More expensive, but quicker payback. SAP, the ERP vendor with the largest market share in the market, is expensive to implement – second only to Oracle. In addition, our research finds that SAP customers realize the least amount of potential functionality compared to the other Tier I vendors. The good news? SAP implementations deliver the quickest financial payback relative to the others. This suggests that despite the relatively high costs and low functionality realized, customers are still experiencing solid financial benefits as a result of implementing the software. In addition, SAP’s implementation duration is (perhaps surprisingly) low compared to its peers, which is second to Infor.
Oracle: Expensive and unpredictable implementation costs, but higher success rates. Even when normalized for company size, Oracle implementations (including JD Edwards and eBusiness Suite) are the most expensive of the four. In addition, customer implementation durations and costs are more unpredictable and experience higher deltas between planned and actual numbers relative to the other Tier I vendors. On the flip side, Oracle implementations have the highest success rate of the four in terms of customers’ subjective self-assessment of whether or not they felt their implementations were successful. In addition, JDE and eBusiness Suite customers realize a higher degree of functionality from their implementations compared to SAP and MS Dynamics.
Microsoft Dynamics: Longest to implement, but lowest total cost of ownership. Microsoft Dynamics implementations take the longest to implement when compared to their Tier I counterparts. This could be at least partially attributed to the fact that MS Dynamics also has the highest customization rate of the four systems, which typically leads to longer implementation durations. On the other hand, total implementation costs are the lowest among MS Dynamics customers compared to the other three. In addition, MS Dynamics is largely considered as the most flexible option of its Tier I peers.
Infor: Lowest short-list rate, but most predictable outcomes. Infor may not be short-listed by potential customers nearly as often as the other Tier I vendors, but once they are short-listed, they are selected at a very high rate – a close second to SAP. This suggests that Infor has some work to do to become top of mind for potential ERP buyers as a viable Tier I alternative to SAP, Oracle and MS Dynamics. (Note: this is the first year Infor was included as a Tier I solution in our study. This was largely because of their increasing penetration of large, multi-national organizations globally). However, Infor implementations are the most predictable in terms of planned vs. actual implementation cost and duration. This suggests that there are less unhappy surprises among their customers. In addition, Infor customers experience the lowest level of operational disruption when compared to the other three vendors in our study.
Although every organization is different and has different business needs and requirements, the data points outlined in our study can be a useful data point for any ERP evaluation and selection process. Although no ERP system is perfect and without tradeoffs, your unique business priorities will ultimately determine the best fit and most appropriate tradeoffs between the different options in the market.