As summer draws to an end, people across the country are sending their kids back to school and getting ready for autumn. In addition, CIOs and other executives are finalizing their Q4 budgets and preparing for other end of year activities. For many customers of SAP and Oracle, these winds of change can also signal consideration of switching from one of the two Tier I ERP systems to another. Read how we determine whether ERP Migration is right for your organization.
We work with many companies that are using one of SAP’s ECC, All in One, or Business By Design products and looking to switch to Oracle’s eBusiness Suite, JD Edwards, or Peoplesoft products. We also work with just as many companies that are looking to do the opposite and migrate from Oracle to SAP. In either case, we encourage clients to carefully understand what they’re trying to accomplish, fully understand the risks of switching out ERP systems, and consider their options.
Here are four key questions we ask clients that are about to consider a switch from Oracle to SAP or vice versa:
1. Is the ERP software a band-aid for other operational problems? We often see companies misplace their frustration with operational issues and blame the ERP system. Broken business processes, organizational design issues, lack of employee training, and poorly implemented software isn’t going to be remediated by a new ERP system. It’s easy to blame the SAP or Oracle software for operational or organizational challenges, but it’s important to differentiate between the two. Addressing non-software issues can be much less time consuming, expensive, and risky than completely changing out the software, so it is a good idea to be absolutely certain that the software is the problem before moving forward.
2. Is there another product from the same ERP vendor that can address your needs? If you find that the answer to the first question is that your problems do indeed lie with the ERP software, then you may want to consider whether your vendor has other viable solutions available to your organization. Both SAP and Oracle have a relatively wide variety of products to choose from, so it can be beneficial to consider alternative options from your existing vendor. For example, we often run into companies that are using JD Edwards but feel as if they have outgrown in and want a more robust or more comprehensive solution such as SAP. However, these companies may be well advised to consider eBusiness Suite since it would not require a complete migration away from their current vendor. Your current vendor may be able to provide migration credit and other financial incentives to stay in their family of products, and the implementation of a sister product from the same vendor can be less risky and costly as well.
3. Can your company handle the risk of a rip and replace ERP approach? SAP and Oracle implementations are generally more costly and involve more risk than Tier II systems or point solutions. However, if either SAP or Oracle is indeed the right product for your organization going forward, then it is wise to understand the risks of another Tier I rollout. Because the systems are complex and robust with differing data structures, you’ll want to make sure your organization has the resources and expertise to effectively implement. Effective SAP to Oracle and Oracle to SAP implementations require tedious project management, clearly defined business processes via a business blueprint, and effective organizational change management to address the significant difference between the two software solutions and their related business processes.
4. Are you looking for a single system or best of breed ERP strategy? As simple as it may sound, many companies choose to migrate to or from SAP and Oracle without fully understanding the type of solution that is best for their organizations. SAP generally provides single system solutions that fully integrate data into a single package, while Oracle generally provides a more best of breed solution given their acquisitions of some of the leading business providers, such as Siebel, JD Edwards, and Hyperion. On the other hand, SAP’s single system approach can result in business workflows that aren’t ideal in each functional area, while Oracle’s best of breed approach can create data and software silos between the different systems they provide within their solution set. Either option has strengths and tradeoffs, so it is important to understand the type of software that is best for your organization before making the decision on which route to go.
The switch from SAP to Oracle or vice versa may provide business process and system improvements that enhance your operations. However, as is the case with any ERP implementation, migrating from one Tier I ERP system to another can be risky and resource intensive. The above questions should help ensure you are on the right track as part of your ERP evaluation and selection process.
For more analysis, download Clash of the Titans: An Independent Comparison of SAP vs. Oracle and be sure to look for our forthcoming report comparing SAP, Oracle and Microsoft.