Today we published Clash of the Titans — our annual study of SAP, Oracle, and Microsoft Dynamics ERP implementations — which has become our most widely referenced and downloaded piece of thought leadership. In addition to being a favorite of CIOs and CFOs across the globe, it is my personal favorite for a number of reasons. First, it’s just plain interesting to see how the leading ERP vendors compare to one another in terms of implementation duration, benefits realized, total cost of ownership and a host of other metrics that we evaluate for the hundreds of ERP implementations across the world included in the study. Second, it’s always intriguing to see how these leading ERP systems differ from one another and, just as importantly, how they are the same in many ways.
Most people that download and review this study want the answer to several fundamental questions. Is SAP better than Oracle and Microsoft Dynamics, and vice versa? Do Microsoft Dynamics ERP implementations really take less time and money? Does Oracle provide better functionality and business benefits because of its best of breed solution? Although the study doesn’t provide definitive black and white answers to the above, it does provide several compelling findings.
Here are some highlights from the study, most of which are consistent with our extensive implementation experience with each of these solutions:
SAP is considered more often than the others during organizations’ ERP selection cycles. Perhaps not surprisingly, SAP is short-listed more often – and by a wide margin (35-percent vs. 24-percent for Oracle and 17-percent for Microsoft Dynamics). This is consistent with patterns we’ve seen in recent years, primarily due to SAP’s market share and brand name recognition. However, as you’ll see below, SAP’s hit rate when it is considered on short-lists is not as high as the other vendors.
Oracle is selected at a higher rate than SAP and Microsoft Dynamics. Although SAP has the largest overall market share, it is interesting to see that Oracle (which includes E-Business Suite, PeopleSoft, and JD Edwards) is selected at a higher rate than SAP and Microsoft Dynamics. Because Oracle is not short-listed as often as SAP, it’s overall market share trails that of its larger German counterpart, suggesting that Oracle could hypothetically gain a larger market share if it found a way to get on more organizations’ short-lists in the first place.
Microsoft Dynamics is implemented in less time than SAP and Oracle. Microsoft Dynamics is implemented in an average of 13 months, versus 17 months for SAP and 18 months for Oracle products. One point to note, however, is that these are averages that include companies of all sizes and industries. Since Microsoft Dynamics customers are typically smaller and less complex than the average SAP or Oracle customer, these metrics could be more a result of the implementing organization’s complexity than a result of the ERP software itself.
SAP, Oracle, and Microsoft Dynamics all take longer to implement than planned. One thing that all three solutions have in common is that the implementations typically take longer than planned, with approximately two out of three ERP implementations involving one of these three vendors take longer than expected. Oracle implementations had the largest variance (18 months actual versus 14 months expected), followed by Microsoft Dynamics (13 months actual versus 11 months planned) and SAP (17 months actual versus 15 months planned). These data points suggest that ERP vendors and their system integrators and sales reps tend to grossly underestimate the time required to implement the solutions.
Organizational change management issues are the most common reasons for ERP implementations taking longer than expected. When looking at customers of all three products, lack of organizational change management was the top reason for implementation delays, second only to increased project scope. One out of five implementations cited organizational issues as the top reason why their implementation took longer than expected. This data proves that the “slam in the system and get the employees trained quickly using some canned training materials” approach to change management doesn’t work.
In addition to the above data points, the study also reveals a number of other noteworthy findings. For example, SAP has the least predictable actual business benefits, while “availability of information” was the number one business benefit cited by user organizations of all three ERP vendors.
So who wins the SAP vs. Oracle vs. Microsoft Dynamics showdown? Unfortunately, we still don’t have a clear-cut answer. Even if we had data that overwhelmingly supported one of the three – which we don’t – the “best” solution depends on the needs and priorities of the implementing organization. Just as importantly, it also largely depends on how the organization implements the system. For example, even if a specific software is a great functional fit for an organization, it’s the implementation of that software that leads to ERP success . . . or failure. If the implementation isn’t well-managed and run by proven ERP implementation experts, it is much more likely to lead to disaster — and that holds true for implementations of SAP, Oracle, Microsoft Dynamics and any other ERP system on the market.
Learn more (and ask specific questions) during our Clash of the Titans webinar tomorrow (10 a.m. MT) and be sure to download Clash of the Titans 2012: An Independent Comparison of SAP, Oracle and Microsoft Dynamics today.