Comparative Analysis on Erp Vendors

aim of logical argument and political economy inch University South B difference K507 first-class honours degree step Resource Planning 2008 F every ERP Project Comparative analysis of ERP vendors wear, vaticinator, and Microsoft Koenraad Adams, Eric Piazzoni, and In-Saeng Suh emailprotected com, emailprotected com, emailprotected edu generalisation This is a study of the comparative analysis on the enterprise mental imagerys mean (ERP) vendors, jester, prophet, and Microsoft. We research on functionalities, toll, features, and target commercialise for each vendor. Keywords ERP, blackjack oak, Oracle, Microsoft, SME 1 school solar day of chore and economic science inch University South Bend . Introduction ERP carcass is an integrated nurture system to embody the work within contrasting organizational parts of an enterprise. The leading global providers ar SAP, Oracle, and Microsoft. ERP packages atomic chassis 18 designed to be customizable to concrete ask of an organization and to its legacy systems. The customization of ERP modules for a concrete consumptionr is performed with special tools and using specific or standard schedule languages. Due to already menti singled general ERP characteristics, customization and implementation usually require specialized greetledge and signifi smoket resources.SAP was founded on April 1, 1972, by five IBM employees. It aimed its first crop ( pecuniary accounting software) in close cooperation with its first customer. The company grew ab initio around ERP and solidified its merchandise leadership by being a pioneer in the move from mainframe to client-server computing with its R/3 ERP resolving power introduced in the 1990s. From there, SAP expanded into a much broader set apart of applications for opposite functions in the enterprise customer relationship wariness (CRM), write out chain wariness (SCM), product life-cycle eradicatement (PLM), and supplier relationship focus (SRM) .By bundling and integrating these applications, SAP became known for senior high-quality, comprehensive enterprise solutions, which SAP or SAP-trained SI consultants would then customize. Oracle was founded in 1977 as computer software Development Laboratories. The first Oracle program was written in meeting tell language, ran on PDP-11 and with 128k of memory. The software was never officially released though. Version 2 which was released in 1979 was the first to be released. The company had changed its name by then to comparative software Inc. Business grew and by 1982 they had changed their name again, this time to Oracle and in 1987 the company went public.Today, Oracle remains one of the leaders in the ERP industry. A few of the firsts Oracle brought us are ? The first commercially-available SQL-based database (1979) 2 inform of Business and economics ? ? ? ? ? ? ? atomic reckon 49 University South Bend The first database to stick out symmetric multiprocessing (SMP) (1983) The first distributed database (1986) The first database product tested to keep abreast with the ANSI SQL standard (1993) The first 64-bit database (1995) The first web database (1997) The first proprietary RDBMS to constrain available on Linux (1998) The first database to support XML (1999)Microsoft kinetics AX is a line of stage commercial enterprise eradicatement solutions that provides financial management, business intelligence, homosexual resource management, project management, customer relationship management (CRM), manufacturing, supply chain management solutions, collaborative workspace, and configuration and development. The Information Technology views quadrants Gartner Consulting produces each year as a type of benchmark to see where each provider wads up against their competition. In 2007, Gartner released the quadrant on the left.While many will compete that Gartners methods are too simplistic and dont make up a truly accurate view of what the decisi on makers face, it is still a good place to start when comparing products. Gartner ranks venders in deuce areas, Completeness of flock and Ability to Execute. Using various qualifiers based on the rankings, the solutions are places in one of four quadrants ? Leaders furnish higher on twain criteria the ability to execute and establishedness of wad. typically enlargedr industry developed businesses with vision and potential for expansion 3 School of Business and Economics ?Indiana University South Bend Challengers degree higher the ability to execute and move on the completeness of vision. Typically larger, settled businesses with minimal future plans for that industry ? ? Visionaries s midpoint disappoint on the ability to execute and higher on the completeness of vision. Typically littler companies that are unloading their planned potential Niche players score lower on both criteria the ability to execute and completeness of vision. Typically food foodstuff fledglings I n 2007, both Oracle and SAP were placed towards the bottom of the Challengers Quadrant.This would depict they claim the ability to execute, though maybe not that easily as they are towards the bottom of the quadrant, and they dont seem to dedicate a great pass out of vision. But is that all there is to look at? In this study, we focus on functionalities and features, the essence greet of ownership, and target market of the ERP vendors SAP, Oracle, and Microsoft kinetics. 2. Functionalities and Features 2. 1 SAP R/3 SAP R/3 is a client-server based application, utilizing a 3-tiered model, the presentation layer, the application layer, and the database layer.SAP R/3 is structured using its own proprietary language called ABAP (Advanced Business industry Programming). ABAP, or ABAP/4 is a fourth generation language (4GL), geared towards the creation of simple, yet powerful programs. SAP R/3 similarly offers a complete development surround where developers toilette either metamorphose existing SAP code to modify existing functionality or develop their own functions, whether reports or complete transactional systems within the SAP framework. ABAPs main fundamental interaction with the database system is via Open SQL statements.These statements lay off a developer to query, update, or delete information from the database. Advanced topics let in GUI development and advanced integration with early(a) systems. With the introduction of ABAP Objects, ABAP provides the opportunity to develop applications with object-oriented programming. SAP ERP redefines enterprise resource formulation delivering role-based access to crucial data, 4 School of Business and Economics Indiana University South Bend applications, and analytical tools. With SAP ERP, we asshole efficiently deal with business challenges in the following areas ?End-user supporter delivery Ensure that employees can readily access the critical data, applications, and analytical tools they need to perform all their job functions efficiently and effectively while too supporting a shared- avails organizational model for human resources, finances, and other key processes. SAP ERP offers role-based access, self-services, and employee interaction center support through with(predicate) SAP draw offr Self- serving, SAP Employee Self- inspection and repair, twain and employee interaction center support. Plus, SAP Mobile Time and Travel enables employees in the field to report time and expenses offline. SAP ERP Financials Ensure compliance and predictability of business surgical operation so the organization can gain a deeper financial insight across the enterprise and tighten control of finances. SAP ERP Financials automates financial and management accounting and financial supply chain management. The solution also provides rigorous support for corporate-governance mandates such as Basel II and Sarbanes-Oxley. ? SAP ERP mankind Capital counsel Optimize the HR processes with a complete, integrated, and global human capital management (HCM) solution.SAP ERP provides this HCM solution for organizations of all sizes and in all industries. You can maximize the potential of your workforce, while supporting innovation, growth, and flexibility. The SAP ERP HCM solution automates genius management, core HR processes, and workforce deployment enabling increased efficiency and erupt compliance with changing global and local regulations. ? SAP ERP Operations Manage end-to-end procurement and logistics business processes for complete business cycles from self-service requisitioning to lexible invoicing and pay optimizing the flow of materials. SAP ERP Operations also helps discrete and process manufacturers manage the undefiled life cycle of product development and manufacturing. The solution automates the total manufacturing process and compacts personify by controlling and adapting the 5 School of Business and Economics Indiana University South Bend manufacturing process in reliable time and increases customer satisfaction by delivering higher-quality products. ?SAP ERP Corporate serve Helps organizations manage their most costintensive corporate functions by supporting and streamlining administrative processes in the areas of real estate enterprise assets project portfolios corporate travel environment, health, and guard compliance quality and global trade services. SAP ERP Corporate function is a complete and integrated solution that maximizes transparency and control, while lessen financial and environmental risks and enhancing honorablety of employees. ?Performance management Support the entire life cycle of performance management, delivering real-time, personalized measurements and metrics to improve business insight and decision making. SAP ERP supports financial analytics, operations analytics, and workforce analytics, as well as united financial and statutory report planning, budgeting, and forecasting, outline management and scorecards, and risk management. 2. 2 Oracle An Oracle database system is a platform with at least one application running n it to access and process the data. info is stored logically in the form of knock back spaces and physically in the form of data files. The recommended structure for an Oracle database is the be RAC authentic Application Clusters. Multiple instances, usually on diverse servers, appropriate to a central storage array. This offers better performance, scalability and redundancy for the users. There are various versions of the Oracle database management software. In addition, Oracle divides its product into various editions to track marketing and sales. opening move mutation The full entourage of performance, scalability, security and reliability stored on either a clustered or single server. Runs on all standards and available with a large issuance of applications. ? ? Standard Edition Provides Enterprise level functions for mid-s ized organizations. Sold through Oracles cd Value Added Re loters. Standard Edition One low end stripped five users admittance level package. 6 School of Business and Economics ? ? ? Indiana University South Bend Express Edition primarily intend for students to learn how to code applications for Oracle.It is small, free and his limited capacity. Oracle Personal Edition ? High end? functionality but sold to single-use developers. Oracle Database Lite designed to run on mobile devises. Though this looks like a large number of options, there are really only three straightforward choices and they are based on the size (number of seats) of the organization. Of the other three, 2 are for developers and the other just provides access to database information from a mobile devise. Oracle does, however, offer some other ? flavors? to offer as well.Oracle has grown dramatically mostly through acquisitions. Their product lines include. ? ? ? ? ? ? ? PeopleSoft Enterprise Siebel JD Edwards Hyperion Agile AutoVue Fusion not counting the other products (PeopleSoft, JD Edwards etc. ) Oracle Business Suites alone have over 140 different applications which can be installed on their platform. These include ? Enterprise Performance Management A tool which aides in the executive decision making process by supporting a broad range of strategic, financial and operational management processes. Business functioning Outsourcing an application which seems to work as an extranet and allows organizations track the non-core business processes which have been outsourced. ? guest Relationship Managementtracks what is going on in the sales department. Allows other departments (finance, production) know what they can expect. It will also allow the marketing groups know how effective campaigns have been. 7 School of Business and Economics ? Indiana University South Bend node Self- proceeds Solutionsallow customer place orders themselves without the supplier having to have someone ent er the order.This reduces the risk of order entry errors. Production or warehouse groups receive the order right away(p) and can act on it much quicker so subroutine around takes less time. ? ? Financial Management Solutionsprovides and tracks data for finance operations, governance, risk, compliance, and performance management. Human Capital Management ? tracks all aspects of the Human Capital needs, from core human resource (HR) transactional functionality through service automation and delivery to complete enterprise talent management solutions.? 1 It provides the needed resources and has proven to reduce the costs. ? Procurement Insures that the supply chain stays on top of productions needs and maintains the most cost effective method of doing so. Project Managementmaintains express of current projects statuses and communicates with those needing the information in order to insure projects are go on as they should. ? loony toons Suiteinsures shipments happen upon their destination as well as, ? lowers transportation costs, improves customer service and asset utilization, and provides flexible, global fulfillment options.? 2 These are just a handful of the applications available.Essentially, whatever the need, Oracle has a way to meet it. 2. 3 Microsoft Dynamics Financial Management Microsoft Dynamics AX accounting and finance solutions help you track and analyze business information. You can easily manage your general ledger, payables, receivables, blood, sales process, purchasing, analytical accounting, funds flow, bank reconciliations, fixed assets, and collections. 1 Human Capital Management Solutions. Oracle, The Worlds Largest Enterprise computer software club. 19 Nov. 2008 . 2 Transportation Management. Oracle, The Worlds Largest Enterprise Software Company. 9 Nov. 2008 . 8 School of Business and Economics Business Intelligence and reportage Indiana University South Bend Microsoft Dynamics allows you to manage budgets, create and conso lidate reports and look for trends and relationships in any part of the business. Human Resource Management Microsoft Dynamics allows the management of applicant and employee information payroll and benefits, skills mapping, recruitment and employee registration, and skills development. In addition the system helps you ensure your organization is meeting government reporting requirements accurately and on time.Project Management Project management and accounting applications allow project managers, accountants and executives to improve their project profitability and adapt to changing conditions. In addition manage resources, forecast costs and budgets, track time, and expenses. Lastly, manage contracts and billing. Customer Relationship Management Customer relationship management solutions enable management of customer groups, create and launch marketing campaigns, track customer activity, manage sales and after sales.It also enables automation of many day to day tasks for sales, c ustomer service, field service, call center, and marketing professionals. Manufacturing It provides an integrated suite of manufacturing applications that employ you the tools to plan, manage, and execute a top of the line manufacturing operation. The manufacturing process consists of product configuration, plan and shop floor, and supply and capacity requirements planning. Supply Chain Management This improves inventory management, management of single or multi-site warehouses, demand planning, order processing, and online collaboration with suppliers.Collaborative Workspace This extends the reach of business applications, information and process to employees, customers, and partners with role based delivery through a single web-based portal. Configuration and Development 9 School of Business and Economics Indiana University South Bend Customization capabilities enable programmers and system administrators to add new functionality and modify existing functionality quickly and wit h limited coding. 3. The total cost of ERP ownership gist cost of ownership (TCO) is a significant grammatical constituent in ERP strategies and decisions.Yet while both end-users and ERP vendors tend to talk about lower TCO and many vendors claim it as a point of differentiation. Three different elements of total cost associated with ERP implementations are actually important ? ? ? Amount worn-out(a) on software Amount spent of external services internal costs Since as the company grows, the number of users goes up, along with the total cost of software and services, one can naturally expect a correlational statistics between size of the ERP deployment and costs. As shown in Table 1, as the number of users goes up, the total cost of software and services also rises.Table 1 come Software and Services cost by Company Size Company Size Under $50M $50M $100M $100M $250M $250M $500M $500M $1B $1B $5B Over $5B fairish of Users 38 92 195 344 475 2187 3365 mean(a) Software $1 76,597 $482,941 $695,395 $985,714 $1,364,286 $2,360,577 $2,652,500 median(a) Service $126,022 $351,374 $581,090 $655,263 $1,110,000 $2,081,000 $2,102,778 Average 3 years upkeep $81,676 $247,554 $443,066 $346,639 $617,735 $1,479,208 $1,163,531 Average total cost $384,295 $1,081,869 $1,719,551 $1,987,616 $3,092,021 $5,920,785 $5,918,809Source Aberdeen Group, July 2007 Table 2 displays software and service costs by vendor, since the ratio of services to software costs is fact mood of both ease of use and ease of implementation. We just adopted a few major vendors, Infor, Lawson, QAD, SAP and Oracle. Table 2 Software and Service be by Vendor 10 School of Business and Economics ERP vendor Infor Lawson QAD SAP Oracle Average Software $703,261 $482,500 $633,871 $1,276,667 $1,929,167 Average Service $494,444 $455,556 $463,158 $1,115,323 $1,694,231Indiana University South Bend Average of ERP modules 11. 0 10. 8 10. 2 11. 9 11. 5 Average Software + Service per user $9,843 $10,521 $9,741 $11,381 $16,882 Average total costs per user $12,773 $11,826 $12,161 $15,067 $20,983 Source Aberdeen Group, July 2007 Functionality and TCO remain significant factors on ERP strategies and decisions. The discernment and breadth of functionality deployed, along with the cost of software, services, and on-going maintenance combine to provide a price performance of ERP.Table 3 shows the ERP usage and total cost per user per percentage Point of functionality used by three vendors, SAP, Oracle, and Microsoft Dynamics. Table 3 ERP Usage and Costs per User per Percentage of Functionality Used ERP Vendor SAP Oracle Microsoft Dynamics Average of Modules Used 12. 4 11. 3 10. 6 Average % of Functionality Used 69. 1% 72. 4% 73. 2% Average of Users 834 1365 116 Software + Service + 3 Yrs Maint. $702 $513 $607 Source Aberdeen Group, July 2007Cost Areas of Microsoft Dynamics AX The initial honest evidence price per user for Microsoft Dynamics AX is $3,000. According to marrow Research, Inc t he comely initial license price for a Microsoft Dynamics AX customer was $571,234 with a low of $50,000 and a high of $2. 55 million. The consulting average consumption for Microsoft Dynamics AX deployment was $1,169,745 with a low of $50,000 and a high of $6. 8million. The median expenditure for consulting was $600,000.Pertaining to those customers that made hardware investment, the average hardware costs were $180,188 while the median cost was $84,750 (Nucleus Research, 7). Those companies that invested in the internal effect for deployment and 11 School of Business and Economics Indiana University South Bend current support for the ERP solution the average military force costs were $346,667 and the average annual ongoing cost was $192,000. Lastly, formulation costs on average were $141,375 with one hundred and ninety-five users, twenty-nine hours of preparedness time at a cost of $25 per hour. Table 1.The Average 3-Year Cost of an Microsoft Dynamics AX Deployment Average $ 571,234 $1,169,745 $180,188 Data Components Average initial license price Average standalone consulting expenditure of customers interviewed Average hardware expenditure of customers interviewed Average number of personnel needed to deploy4 Average time of deployment13 months faux full loaded cost of an employee$80,000 Average number of users 195 Average gentility time 29 hours Assumed in full loaded hourly cost of an end user $25 Average initial cost of deployment Average maintenance rate 16% Average initial license price.Average number of FTEs required to support Microsoft Dynamics AX 2. 4 Assumed fully loaded cost of a support FTE$80,000 Average 3-year costs of software, consulting, hardware, personnel, training and maintenance. Software Consulting Hardware Personnel $346,667 Training Total Ongoing Costs Software maintenance Personnel $141,375 $2,409,207 $274,192 $576,000 Total 3-Year Cost $3,259,399 Table 2.The medial 3-Year Cost of an Microsoft Dynamics AX Deployment Initia l Costs Average Data Components Software $168,000 median(a) initial license price Median standalone consulting Consulting $600,000 expenditure of customers interviewed Median hardware expenditure of Hardware $84,750 customers interviewed Median number of personnel needed Personnel $220,000 to deploy3 Average time of deployment11 12 School of Business and EconomicsIndiana University South Bend months Assumed fully loaded cost of an employee$80,000 Median number of users 120 Median training time 24 hours Assumed fully loaded hourly cost of an end user $25 Median initial cost of deployment Median annual cost of license 15% Median initial license price $168,000 Median number of FTEs required to support Microsoft Dynamics AX 1. 25 Assumed fully loaded cost of a support FTE$80,000 Median 3-year costs of software, consulting, hardware, personnel, training and maintenance. Training Total Ongoing Costs Software maintenance 72,000 $1,144,750 $75,600 Personnel $300,000 Total 3-Year Cost $1,26 9,950 3. Target market SAP serves 75% of the Fortune Global 1000, but less than 1% of Fortune Global million. The small and medium enterprise (SME) market is a huge opportunity. SAP views SMEs as its main potential source of growth. As of summer 2006, SAP led the midmarket segment, but to reach its goal of having 45% 50% of order entry from SME customers by 2010, SAP has to address the two most important elements of an SME solution Total Cost of Ownership (TCO) and ease-of-use.SAPs offering has higher up-front outlays but lower maintenance rates. SAP acutely expands SME market via the SAP NetWeaver platform strategy toward the goal of doubling SAPs market cap by 2010. It would probably be safe to say Oracle targets anyone interested in purchasing an ERP solution. That wouldnt be entirely accurate. Its obvious that Oracle has achieved its success by building for the large Enterprise organizations but theyve also been successful delinquent to their focus on their platform.Enterpris e solutions will probably remain a fix target for them. However, if you look at the products they are now producing making it easier for smaller organizations to get introduced to their product, its an obvious sign they are seeking more small to medium businesses in their portfolio. The 13 School of Business and Economics Indiana University South Bend Standard Edition One with a price of $180 per user is a sign of that. They also have a suite of ? out of the box applications ready to bolt on once the server is in place.Get the business used to the Oracle environment when they are small at a competitive price, then sell more licenses as your software helps them grow seems to be their motto. I cant say thats a bad one. At the end of the day, selecting the best solution comes down to preference. Obviously, each solution has strengths and weaknesses. But how do you select a solution when one provider is strong in one area you need while another is strong in another? Additionally, ther e are more solutions coming on the scene.Smaller companies who may be able to provide a different type of service than what the biggest players offer. Another solution many will consider in the future, peculiarly with the current economic situation, is the growing Software as a Service trend. 3 SAP has already got a jump on the market with their ByDesign solution. At the end of the day, it will have to come down to what solution works best for the business making the choice. 3 Maxcer, Chris. Is SaaS ERP a viable model for manufacturing? Manufacturing ERP software and management SearchManufacturingERP. om. 9 Sep. 2008. 23 Nov. 2008 14 School of Business and Economics Indiana University South Bend References Bit on Gartners witching(prenominal) Quadrants and 2007 report for ERP Vendors OracleApps Epicenter. 11 Nov. 2008 . Compare ERP System/ERP Software Solutions. Technology Evaluation Centers. 12 Nov. 2008 . Farber, Dan. Disruptions in the software fabric. Builder AU By devel opers for developers. 25 Nov. 2008 . Gartner Consulting Web Site.. Gartner Consulting. 20 Nov. 2008 . Greenbaum, Joshua. SAP beats Oracle? Oracle surrounding SAP?Microsoft raking in new customers?. ZDNet Blogs. 20 July 2007. 25 Nov. 2008 . Hagiu, Andrei, Pai-Ling Yin, Daniela Beyersdorfer, and Vincent Dessain. SAP Industry Transformation . Harvard Business Journal N/A (2006) 28p. Human Capital Management Solutions. Oracle, The Worlds Largest Enterprise Software Company. 19 Nov. 2008 . Jutras, Cindy. ?The Total Cost of ERP Ownership. Aberdeen Group. 17 Oct. 2006. 10 Nov. 2008 . Jutras, Cindy. Aberdeen Group The Cost of ERP Functionality. Aberdeen Group. 12 July 2007. 10 Nov. 2008 . Jutras, Cindy. The Total Cost of ERP Ownership in Mid-Size Companies. Aberdeen Group. 12 July 2007. 10 Nov. 2008 . Magic Quadrant for ERP Service Providers, North America, 2007. Gartner Custom Newsletter Programs. 11 Nov. 2008 . 15 School of Business and Economics Indiana University South Bend Maxc er, Chris. Is SaaS ERP a viable model for manufacturing? Manufacturing ERP software and management SearchManufacturingERP. com. 9 Sep. 2008. 23 Nov. 2008 Microsoft Dynamics Business management, financial and accounting software solutions (ERP, enterprise resource management). Microsoft Corporation. 25 Nov. 2008 . Oracle ERP Benefits and Disadvantages. ITtoolbox Oracle Knowledge Base. 13 Nov. 2008 . Samuals, Mark. Making best use of Gartners reports 17 Apr 2008 Computing. Insight for IT leaders business technology news, analysis, reviews and jobs Computing. 12 Nov. 2008 . The Real ROI from Microsoft Dynamics AX Nucleus Research. ROI Reports, ROI Case Studies, ROI Tools Nucleus Research. 25 Nov. 2008 . Transportation Management. Oracle, The Worlds Largest Enterprise Software Company. 19 Nov. 2008 . 16