Today we released a summary of our 2017 Clash of the Titans Report. Each year that we publish this report, we find some interesting takeaways – and this year is no different.
First, a bit about the report: it contains a summary of our analysis of 470 organizations that have selected and implemented one of the leading Tier I ERP vendors: SAP HANA S/4, Oracle Cloud, Microsoft Dynamics 365 or Infor CloudSuite. Respondents include a diverse set of global organizations, including companies of all sizes, most major industries and every major region of the world. Respondents completed their respective implementations between October of 2015 and November of 2016.
Here are five points that struck me as particularly interesting as I was reading the initial analysis:
1. The Traditional Market Share Rankings Have Been Scrambled
For the first time in several years of publishing this data, this is the first year that the market share rankings didn’t start with SAP, followed by Oracle, then Microsoft Dynamics. Instead, Microsoft Dynamics 365 moved up in the market share rankings to overtake Oracle in the #2 slot. This trend is also reflected in the rate at which Microsoft is short-listed and selected relative to the other two. This could be a reflection of Microsoft’s aggressive push into the small and mid-size market, as well as their adoption by larger organizations.
2. Surprises with Average Implementation Costs
The data in this report tends to vary from year to year, but this year, we saw some interesting changes related to the average total cost of ownership of implementing one of these four titans. Compared to last year, SAP’s average cost increased materially to an average of $2.1M USD, while Infor’s decreased to $1.5M. Also notable: Oracle’s average total cost of ownership increased to $2.4M, but the discrepancy between actual and planned cost was the lowest among the four ERP vendors.
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.
3. Average Implementation Durations Continue to be Hard to Predict
Implementation durations range anywhere from 15 to nearly 25 months among the four titans. Infor customers experience the shortest average implementation durations – as well as the most predictable, with the actual average timeframe being two weeks less than planned. The other vendors had time overruns of one to two months, while Oracle Cloud customers took the longest to implement and Microsoft Dynamics customers had the widest discrepancy between planned and actual duration.
4. Return on Investment (ROI) Continues to Elude Many Tier I ERP Customers
The average payback period for Tier I customers – which is the time it takes to realize enough measurable business benefits to recoup the costs of the investment – continues to be all over the map. Infor customers lead the pack with the quickest payback period, but ironically, are more likely to have not yet achieved any measurable business benefits (56% have not yet realized any measurable benefits). And, in a turnabout from past years’ data, SAP HANA S/4 customers now have the longest payback period among the four titans – after experiencing the shortest payback period last year.
5. Cloud Adoption is Inconsistent Across the Four Titans
For all the hype and investments in cloud ERP systems, on-premise adoption continues to be remarkably steady – even for the four industry leaders. SAP leads the pack in terms of customers that are deploying cloud or SaaS options (60% of their customers are in the cloud), while Infor CloudSuite (despite their branded name) brings up the rear at just 39% customer cloud adoption. Despite inroads being made in this area, a majority of Oracle and Infor customers are still opting for on-premise options, while just under half of SAP and Microsoft customers are doing the same. It is clear that it may take some time for customer adoption to reach the market potential of cloud options.
There are too many more data points than can be covered in this one blog post, so I recommend that you download the summary report of 2017 Clash of the Titans for more insights. There is much covered in the way of operational disruption, benefits realized, functionality achieved, cost savings and other metrics that will help you as you compare various ERP systems in the market.