Today we published our highly anticipated Clash of the Titans report. Last year’s report, which provided a comparison of SAP vs. Oracle based on our independent experience and research, was our most popular and most referenced research article of the year. This year, we created a new version to not just include updated research data but also add Microsoft Dynamics to the mix.
This year’s findings are interesting. The report outlines actual results from more than 1,800 implementations across the globe over the last six years. Some of the results validate research of previous years, such as:
- SAP still leads in terms of ERP market share with 24% of the market, followed by Oracle and Microsoft Dynamics, respectively
- Consistent with its leading market share, SAP is short-listed more than Oracle and Microsoft Dynamics (38% of all organizations evaluating new ERP software)
- However, once on the short list, Oracle is selected at a rate higher than the other two vendors (22% of the time, followed by SAP and Microsoft Dynamics, respectively)
- Implementations still take longer and cost more than expected across the board
- Actual vs. expected benefits are still terribly misaligned, with 60%+ of SAP, Oracle and Microsoft Dynamics implementations combined realizing less than 60-percent of the expected business benefits
In addition to findings consistent with last year’s research, this year’s report highlights some compelling new facts. For example:
- Oracle has the highest satisfaction rate, at 80%
- However, satisfaction rates for the others are lower, with SAP at 39% and Microsoft Dynamics at 33%
- On average, Microsoft Dynamics takes the longest to implement at 14 months, followed by SAP (13 months) and Oracle (11 months). Microsoft Dynamics also has the highest discrepancy between planned and actual implementation duration, suggesting that its customers’ expectations are misaligned with reality.
- Microsoft Dynamics offers the quickest payback and return on the investment, with 84% of organizations realizing a payback period of less than 3 years
- In addition, Microsoft Dynamics has the lowest average total cost of ownership (approximately $500k), followed by Oracle and SAP, which is the most expensive
- SAP has the lowest average cost overrun (8% over budget), followed by Microsoft (14%) and Oracle (15%). This suggests that although SAP customers spend more than those of other ERP vendors, SAP customers have a better sense of what it will take to implement and are able to budget accordingly.
Perhaps the most interesting finding is the potential correlation between implementation duration and satisfaction. The more time that customers of the three “titans” of Tier I enterprise resource planning (ERP) software take to implement their systems, the lower their self-reported satisfaction rates. The online survey found that while Microsoft Dynamics had the longest average implementation duration (14 months), it also had the lowest satisfaction rate (33-percent). Conversely Oracle, which has the shortest average implementation duration (11 months), had the highest satisfaction rates (80-percent).
Another interesting finding is what we didn’t find: the ERP software with the quickest payback period (Microsoft Dynamics) does not have the highest satisfaction level. In fact, and as mentioned above, Microsoft has the lowest satisfaction rate, suggesting that business benefits may not be the key determinant of an organization’s satisfaction with a particular ERP system. Instead, it may be that implementation duration is the bigger driver of customer satisfaction.