SAP vs. Oracle: Evaluating their pros and cons as an ERP solution
Internet connectivity has made it easier for Filipino companies to work with customers, suppliers, and partners all around the world. As they ramp up their operations to cater to the global market, they also need to make investments that ensure their processes meet global business standards. One of the most important adaptations is the implementation of ERP solutions. Even companies that focus on local operations can benefit from using this system to improve productivity and minimize costs.
ERP stands for enterprise resource planning. It refers to a management application that integrates a company’s different business processes into a single system so that it becomes more efficient. In the Philippines, companies usually choose between two software providers. SAP Philippines and Oracle Philippines are considered “Tier 1 ERP vendors” so they often come out as the top choices. While both offer great ERP solutions, deciding on the best one will depend on your company’s particular situation. These pros and cons can guide you in determining which software to invest in.
Project cost and duration
Regardless of the software you choose to go with, investing in an ERP system can be an expensive endeavor. An Oracle subscription costs an average of 1.7% of annual company revenue while SAP customers can spend up to 4% of annual revenue on their subscription. While SAP appears to be the more expensive option, it also offers more functionality compared to Oracle’s solutions.
Another consideration is the project duration. Implementation of an ERP takes several months and it can take longer for bigger organizations with more requirements. Generally, it takes a maximum of 12 months for Oracle and a maximum of 15 months for SAP. However, each system has a way of speeding up the process. Oracle has implementation accelerators to make testing the systems easier and training users more efficient. Meanwhile, SAP has presets based on best practices that the user company can adapt to its own needs.
Implementation risk
Implementing any ERP system will always involve some risk. This is why both SAP and Oracle have developed risk management mechanisms to minimize the risk of failure. For SAP, the pre-configurations that it uses to speed up implementation also function as risk mitigation. These configurations are based on industry best practices, which also helps the user company ensure that their operations can match those of companies with similar setups.
Both companies offer User Productivity Kits that help to ensure a smooth and efficient implementation process. This includes data migration, user training, and even evaluation of the success of ERP implementation.
Software functionality and customization
The higher price tag on SAP’s system is justified by the extensive functionality that its users can get from the program. However, it can also take a bit longer to implement as additional features require more training and testing. Some companies may prefer Oracle’s more basic functionality and add features later on, but do note that doing so may require another round of time and cost investments.
Both systems can support customizations for particular user needs but have somewhat different approaches. SAP’s focus is on offering flexibility for tool integration so that user companies can use their preferred programs. Meanwhile, Oracle works with a pool of its best recommended solutions for customers to choose from.
System scalability
Having an ERP system can help your company to grow and expand its operations, and that means your ERP system should be able to scale up as well. The way that Fortune 500 companies use either SAP or Oracle for their ERP solutions suggest the scalability potential of both software, but there are differences in the experience. SAP is lauded for having a more streamlined user experience because it works on a single integrated system. This consistency can make it easier to use even as operations scale up. Meanwhile, Oracle allows the user company to work on a decentralized model and add solutions based on growing requirements.
Cloud integration
Few companies use on-premise ERP nowadays, as hosting your own servers and technology infrastructures requires larger capital expenditure. Both SAP and Oracle offer cloud-based ERP solutions, with Oracle investing heavily on their cloud technology research and development. Though SAP has also been developing its SAP Cloud Platform, Oracle applies quarterly updates to its Oracle Cloud Data Science Platform so users may expect to see more features and functionality.
Both SAP and Oracle offer great enterprise resource planning solutions trusted by the world’s top companies, but weighing each one’s pros and cons ultimately depends on how it fits with the needs of your company. Part of the ERP process is evaluating your current business processes as well as the direction that your organization is heading toward. Your ERP system should be able to support your business goals because it will be an important tool for your growth.
