A study just released confirms something those of us in the Enterprise Resource Planning (ERP) implementation & support industry have known for many years - just because you pay more, does not mean you get more.
Panorama Consulting Group recently released the results of their years long survey of companies that implemented ERP systems.
"Our study of ERP implementations across the globe consists of a wide variety of leading ERP solutions (Figure A). In addition to Tier I vendors such as SAP, Oracle and Microsoft, our study also includes Tier II solutions such as Baan, Epicor, Exact, IFS, Infor, Lawson, Netsuite, Sage, Syspro and others.There were 670 participants in this portion of our study and included data from organizations in the US, Europe, Australia and India."
Their findings (in summary):
- SAP & Oracle implementations cost on average $10 to $14 million dollars more than Microsoft implementations of similar size,
- SAP & Oracle implementations cost on average $9 to $13 million dollars more than Tier 2 vendor implementations of similar size,
- SAP & Oracle implementations took about the same amount of time to implement as Microsoft & Tier 2 vendors,
But... - SAP & Oracle products yielded lower (Oracle 62%) or marginally better (SAP 73%) satisfaction than Microsoft (69%) or Tier Two vendors (70%).
Meaning...
Selecting Microsoft for your ERP solution provides satisfaction levels equivalent to any other choice you may have made, but maximizes savings & minimizes implementation time.
Now as you look at these figures, you might assume that all implementations of these products cost of millions of dollars. This is not true. While there was no information related to the size of organizations surveyed, I suspect they were very large organizations. There are many factors to consider. Obviously there are a lot of issues to consider including required functionality, number of users etc. Specifically, for medium sized businesses with under a hundred users, your costs are likely to be a fraction of those reported in the survey.
Our experience in having conducted very similar surveys (much fewer companies surveyed however) on behalf of our clients agree with Panorama's findings, and do support this type of price disparity with smaller numbers of users as well! As with many purchases, because SAP & Oracle are very well know names, companies often assume that success is much more certain with these vendors.
One final point - interestingly a summary of this survey just released concluded that Tier 2 was the best solution. Odd considering that the Microsoft price was more than $700,000 less than Tier 2 with roughly equivalent scores on implementation time & satisfaction levels. Another consideration for many of our clients when choosing between Tier 2 and Microsoft is the increased comfort dealing with one of the world's largest, most stable software vendors versus a relative unknown.
If you have questions or would like to discuss ERP, feel free to contact the us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .