Enterprise resource planning (ERP) has become an integral part of organizations today, helping manage operations so that they run smoothly and you can focus on growing your company. However, this can only be achieved if you choose the right ERP system, one that fits your specific needs. Making this choice can be challenging, especially if you’ve never used an ERP system before, as you may not have any basis for comparison. And even if you have used an ERP Product, you may not know much about the other ERP options out there.
In this article, we will compare the top three ERP business suites currently available on the market: SAP S/4HANA, Oracle E-Business Suite, and Microsoft Dynamics. But, before we jump in, let’s talk about the ideas behind the term “ERP.”
What Is Enterprise Resource Planning and How Can It Help Your Business?
ERP is a software used to manage day-to-day operations that are essential to running a business. It integrates all functions across an organization into one central database, allowing for data integrity since all departments can rely on the same information for their needs. This single source of truth will also provide better insights for the most critical business questions, such as how your sales profit compared to last year’s or why the production time took longer than it’s supposed to. Moreover, ERP can increase productivity by automating core business operations.
SAP S/4HANA, Oracle E-Business Suite, and Microsoft Dynamics each have their own strengths and weaknesses. In the following sections, we compare the three options according to the functions that enterprises usually look for in ERP.
Deployment and Implementation
Nowadays, almost every ERP product offers on-premise and cloud deployment options. SAP S/4HANA Cloud supports a system-driven implementation for rapid deployment and provides a ready-to-run business process according to SAP best practices. On the other hand, Oracle Modern Best Practice offers a set of end-to-end business process executions to deploy Oracle’s cloud ERP in less time and with less risk. Microsoft Dynamics offers Rapid365 for its cloud deployment best practices.
These rapid deployment tools mean that enterprises do not have to define parameters in configuration tables, as the system already provides the pre-configuration needed for ERP implementation. Examples include a chart of accounts, organizational structures, and approval threshold, which all allow for easier implementation.
Speaking of implementation, software is not the only factor that affects the timeframe, cost, and risk of an ERP implementation project. Rather, it’s also important to plan an implementation and testing strategy. The timeframe and cost of the project are also greatly affected by the complexity of business operations and resources required.
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Functionality and Adaptability
Microsoft is considered a new player in ERP; its features have not been fully optimized and are still being firmed up. Many say that Microsoft Dynamics is a bit slow when it comes to running reports, and its human capital management modules are considered weak compared to its competitors.
Oracle and SAP ERP, on the other hand, have the benefit of maturity, and both boast products that are rich in features and functionality. For example, the difference in Bill of Materials (BOM) structures due to the availability of materials in each region will impact the report of manufacturing costs. To solve this problem, Oracle E-Business Suite has a feature that allows users to view information on the visibility of global inventory balance while maintaining local item attributes. Moreover, SAP S/4HANA offers detailed planning for manufacturing that covers the alternative modes feature, which allows you to automatically choose an alternative production plan if the main plan is not visible.
The table below shows a more detailed list of modules provided by each ERP product:
|Microsoft Dynamics||Oracle E-Business Suite||SAP S/4HANA|
Table 1: Modules provided by Microsoft Dynamics, Oracle E-Business Suite, and SAP S/4HANA
It’s clear from the table that SAP S/4HANA offers a more comprehensive set of modules than the other two options. This allows you to cover more areas of business operations.
For example, let’s say your organization is a car or automotive parts manufacturer, and you have to release a new product design every two years. In this case, the R&D modules in SAP allow your organization to plan the product and project in detail. Manufacturing & Production modules will allow the production department to gain access to the R&D features and plan production accordingly. At the same time, the production department can consider sales data from previous years, as well as models that the sales department can provide if they are using SAP’s Sales & Order Management feature.
This allows for a more seamless integration between all departments without having to connect one system to the other, which can be arduous since the data is not real time and there is a possibility of data inconsistency. The more comprehensive modules will give your organization a competitive advantage because you can react swiftly to current market conditions by leveraging the real-time data analytics.
Of course, limited capability does not always mean that the product is not a good choice. For example, if you want to focus on planning and executing your manufacturing process, you might want to choose a product with a strong feature for that particular process, regardless of the limited options for mobile development. On the other hand, if your main objective is to have a reliable dashboard report in a mobile device, choose a product with the best capability for its mobile interface. Just make sure to properly assess the product based on your organization’s needs and requirements.
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Flexibility and Scalability
All three options provide flexibility and scalability to a certain degree. SAP S/4HANA and Oracle E-Business Suite are more flexible in terms of program development and customization, and SAP S/4HANA is the most scalable option, as it’s better when it comes to standardization.
For instance, when a multinational organization expands aggressively around the world, the most efficient and cost-effective strategy may be to standardize its operations across all global locations. In such a case, SAP S/4HANA might be a better fit because it easily allows the organization to scale without having to worry about a scattered ERP system.
On the other hand, Microsoft Dynamics is a better choice for organizations that require more flexibility (without customization) to cater to stakeholders’ ever-changing needs—without having to focus on the globally standardized operation. Microsoft Dynamics is slightly more flexible because it allows customers to buy only a certain modular solution that meets their requirements. Then, they can add more modules if they plan to scale their business or expand their operations.
Microsoft, Oracle, and SAP all apply machine learning and artificial intelligence to create their own products. All three offer above-average business intelligence and analytics, but SAP S/4HANA is often considered better than its competitors due to its in-memory platform, which provides speed, performance, and real-time visibility.
However, when it comes to technical integration, SAP is the least favored. Technical integration means the ability to integrate with other business software; that is, the capability to transfer and obtain data from one system to another. If you want to integrate your SAP system with third-party applications, you’ll need to pay extra for the license. This becomes especially difficult with any highly customized system.
Oracle E-Business Suite is much easier to integrate with third-party systems using multiple tools and methods. Microsoft Dynamics, on the other hand, provides the most benefits, due to its ease of integration with other Microsoft products like Microsoft Office.
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For a small-scale organization that is still growing and not quite fixed on its business model, it may be best to choose a product that offers more flexibility, as the business process changes will be more manageable. However, as the organization grows and plans to scale operations more widely, this solution may not be suitable, and an option that can offer more scalability could be a better fit. On the other hand, choosing a product with the most comprehensive functionality does not always guarantee a faster return on investment (ROI). In fact, it will only be a waste of your resources if those functionalities are not utilized.
Deciding which ERP solution is best for your organization can be confusing if you are not clear on what you need. Considering each ERP product based on technical parameters alone is not a good idea. Rather, you should consider the business and management perspectives too.
If you’re already using a certain ERP product and want to migrate to SAP S/4HANA or Oracle E-Business Suite, Panaya can help you with the process.