Clash of the Titans: This Year’s Independent Comparison of SAP, Oracle and Microsoft Dynamics

All Articles From Eric Kimberling November 2, 2011 3

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.

These are just a few of the findings. Download the full 2011 Clash of the Titans report and join us this Thursday for a free webinar to review and discuss the findings in more detail.

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3 Comments »

  1. Jack Moran November 2, 2011 at 9:07 am -

    I read your “Clash of the Titans” paper with great interest – your teaser factoids in the introductory email I received did their job admirably. In your teaser and in the paper itself, there was a great deal of weight placed on Project Durations along with a proposition that there was a possible correletion between same and the findings you report on overall satisfaction with either of the 3 solutions being covered in this analysis.

    Looking at the data points outlined in your paper as being the leading causal factors for project timeline extensions, one conclusion stood out. The top 7 reasons cited were all factors one would normally attribute to being more heavily within the sphere of influence of the user’s implementation team than areas more pertinent to a software publisher or their implementation consultants. So if that observation I am offering seems reasonable to others, are we actually saying that the customer controls the primary determinant of whether they will be comfortable with the ERP product they have chosen to deploy and not the capabilities of the products themselves?

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  2. Connor November 3, 2011 at 12:48 pm -

    Eric,

    I would like to say that I find your article very interesting to say the least. For several years now all we heard were how terrrible the success rates and benefits have been with both SAP and Oracle and your article seems to depict something totally to the contrary. Can you explain how or why the change in these areas? Also, how can SAP and Oracle now be deployed faster than Microsoft? I just don’t understand some of your findings (with all due respect) around the statements of SAP and Oracle outperforming Microsoft. I know my response seems slanted towards Microsoft bias but I am an Oracle E Business suite user and I know firsthand their system was a challenge to implement, run and maintain so anything has to be better and from what I have seen on Dynamics AX and heard from a CIO friend running it that it has to have more tangible benefits both short and long term over Oracle. I can’t speak to SAP other than what I have read and heard in industry as well as comparing it to the complexities of Oracle.

    Keep the great articles coming!

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  3. Paul Sita November 9, 2011 at 8:10 am -

    Great buzz – but more questions than answers! Is that a surprise? Microsoft Dynamics refers to a line of 4 different ERP systems that Microsoft offers. Is this Ax, NAV? Investments and satisfaction are relative to who is doing the asking and who is doing the answering – and most importantly, WHEN the question is being raised. Nevertheless value is in the eye of the beholder – people pay millions for an autograph on a piece of paper and that is a good value vs. investing in improving their business over a year or two or more and consider this a poor investment. Keep the “clashes” coming.

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