If you live in Chapel Hill, having a car makes life meaningfully easier. You can get around, go shopping, and free yourself from the shackles of the – very good – public transportation. If you live in central London, having a car is a pain. It’s worse than the Tube, costs a fortune, and gives you very little additional access. The value you get out of your car is dependent on your circumstances.
So too does the value of your ERP depend on the business you run. Smaller businesses rarely need an ERP, while midsized companies can get a great deal out of a good installation. For massive corporations, an ERP is a bit of a necessary evil. I have yet to meet a corporate stooge who loves his company’s ERP, but I’ve also yet to meet one that can think of a better solution.
At the top end of the ERP world, there are maybe five top-tier players. The top three slots are always held by SAP, Oracle, and Microsoft. The bottom two exist in a rough rotation, with brands coming into the space and others leaving on a regular basis.
Here’s an ERP comparison of the three players to help you determine which installation is right for your business.
If you want to spend money, make money, and have a not-horrible-but-not-really-great time, SAP is the beast for you. SAP implementations seem to go relatively smoothly, with cost overruns being minimal. For total cost of ownership, Panorama Consulting found that SAP consistently landed in the middle of the pack.
SAP has grown its ERP from the ground up, relying on in-house development to add features and upgrades, instead of acquiring new businesses to fold under its umbrella. That’s resulted in a consistent and standardized product with well-integrated moving parts.
Capterra reviewers have a fondness for SAP, rewarding it with 4.5 out of five stars over almost 40 reviews. The general consensus is that SAP is a great platform with good training, but you’ll have to reach out to get customizations.
One reviewer writes, “Don’t use SAP if you are not willing to shell out for the third-party applications and integrations that improve the success of meeting your organization’s business technology needs.”
After a similar note about integrations, another reviewer says, “Once you set up the basic structure and integration starts working, [it’s] a smooth and easy system to use.”
Panorama’s research has come to basically the same conclusion. In its Clash of the Titans Report summary, the consulting firm says SAP delivers on the goods, but costs a pretty penny. The second most expensive solution – behind Oracle – SAP consistently delivers the quickest return on invested capital.
In summary, SAP’s ERP solution is a great choice for companies that are looking for consistency, straightforward implementation, and that are willing to take on some customization after the fact, using third-party solutions.
Oracle has taken a different tack in its approach to growth. Instead of developing all of its features, it’s often reached out and acquired high-end providers to bring into the ERP environment. NetSuite, Taleo, MICROS, and PeopleSoft have all been picked up over the last decade, adding new tools to the Oracle suite.
Oracle also ends up costing more to install, according to Panorama. That comes with an increased success rate over SAP and Microsoft, with customers usually happy with the final product. That’s not surprising, given the wide breadth of first-class software companies that Oracle has picked up along the way.
In a predictions piece, Panorama recently said that Oracle will continue to have many niche markets locked down. Again, the theme of buying good companies comes up, with Oracle’s stable of brands able to tap into many smaller markets that other ERP providers won’t bother touching.
Reviewers over on Software Advice like Oracle’s flexibility and focus, with one writing, “[It’s] the best ERP software for middle-size company.” Overall, reviewers on Software Advice give Oracle’s ERP offering a solid 4.2 out of five stars.
One thing to keep in mind is that Oracle and SAP hold a huge chunk of the overall ERP market. That means two things. First, everyone is competing against them for room at the big kids’ table. That means every piece of marketing material you see from a tier-two brand is going to talk about the flaws in Oracle and SAP systems.
Second, it means that you’re going to read some bad stories about implementations. These are huge systems that take a long time to put in place and can cost millions of dollars. Don’t let market share turn into a skewed perspective on success. Both Oracle and SAP deliver results, but they can have horror stories at the same time. With more installations, there are more horror stories – anecdotes are not evidence.
Oracle is a good solution for niche players and companies that want more flexibility in implementation. It can get overwhelming, though, so make sure you know exactly which systems you’re interested in installing. If buying SAP is like buying a very nice car, buying Oracle can often be like buying a shed full of the parts required to make a nice car – it’s easy to get lost in the clutter.
Microsoft Dynamics ERP
Microsoft has made a strong play for the smaller end of the ERP landscape. Its products are lower in price and take longer to install, but at the end companies are very happy with the solution. While SAP and Oracle represent the tip top of tier one ERPs, Microsoft is sort of a tier 1.5. It’s not worse, but it’s by no means as popular, especially not amongst the larger enterprises.
In fact, the summary over on Software Advice may put it most clearly, saying, “Microsoft Dynamics GP is a financial accounting system for small to midsized businesses that has expanded to encompass a range of functionality increasingly consistent with a complete enterprise resource planning (ERP) suite.”
Dynamics is actually called Microsoft Dynamics GP, where the “GP” stands for “Great Plains.” Microsoft’s approach to ERP has been a kind of mix between Oracle and SAP. Instead of building the whole thing from the ground up or acquiring new properties as they seem to fit, Microsoft bought on big property back in 2000 and has run with it since then.
One of the clear benefits to Dynamics is its association with Microsoft. If you like SharePoint, Windows, and the .NET framework, then Dynamics could be the perfect solution for you.
Software Advice reviewers have given Microsoft Dynamics GP a middling 3.6 out of five stars. Since it was fashioned on a financial tool originally, it’s no wonder that the positive reviews highlight finance and reporting capabilities.
One reviewer says, “Overall, Microsoft Dynamics GP is a powerful and complex accounting and financial management tool. My favorite parts (sic) of the software is that the reports are customizable, and there is a lot you can do with them. Another positive is that the forms and records offer a tremendous amount of detail.”
Downsides center on training time and learning curve, with some reviewers noting that Dynamics can be difficult to integrate with non-Microsoft products.
This is a great pick for companies that love Microsoft or that don’t want to be bogged down with new interfaces. While there is training time required, Panorama predicts that Microsoft will continue to do well with small businesses because “it has the simple look and feel of Microsoft’s Windows, which is often a key purchasing criterion for smaller organizations that have yet to adopt larger and more complex ERP systems.”
These are big, expensive systems for big companies. Smaller operators might not need all the bells and whistles that come with these packages, or may simply find a more specialized solution to fit their needs. You can check out Capterra’s ERP directory for a full listing of ERP options, alongside reviews from actual users.
A quick thanks to Panorama Consulting for consistently producing the best ERP research available. I’ve never had to hire an ERP consultant, but I’d reach out to them if I ever did – no, they’re not paying me to say that.
Good luck with your search, and check out our Logistics and ERP blog for more valuable tips and insights.