Comparison Between Sap And Oracle Information Technology Essay

In this report we have to discuss about the two ERP packages named SAP and Oracle. We are making this report as we have to purchase and implement an ERP system into our organization. As we have to choose and use any one of these two in our organization. So first we will discuss about what an ERP system is, what its components are and why it is so much of importance now days. Then we will discuss about the two most dominant ERP vendors SAP and Oracle and differentiate between them on the basis of some points like cost, which one is better to use, functions, applications, technology platforms etc and finally we will give conclusion about the comparison done and evaluate that which one is better and which one is to be implemented in the organization.

Introduction Of The Report-

Enterprise resource planning (ERP) what does this mean, in a short and simple way and by the name we can define it as planning done in an enterprise to manage the resources. ERP is a part of Enterprise management system (EMS). EMS is defined as a system which manages an enterprise by the use of various resources available to run a business. It has various components and ERP is one of the components. In EMS, ERP system plays an important role as the major decisions are taken through it. ERP system deals with the planning and use of resources in the business. The resources are finance, material, manufacturing, capacity and human resources. The ERP provides, the methodology of accessing the resources need for a given business plan to achieve certain business objectives. It also helps to execute the plans, decisions and actions in the time bound manner. The ERP provides a support system in transaction process, updating and reporting various functions. The ERP is the main interface of the organization. The implementation of most of the ERP packages begins with the definition of enterprise structure, authorities, functions, business process and business plans. The ERP solutions are available in unique platform and also in windows NT. The typical ERP package consists of the following modules- (Wailgum, 2011)

Sales, marketing and distribution.

Manufacturing.

Inventory management.

Personnel management.

Finance management.

Purchase.

Planning.

Control.

There are six system which together act as the support systems to the ERP, they are-

Communication management system (CMS).

Security management system (SMS).

Electronic data interchange (EDI).

CAD, CAM, CAE.

Attendance management system (AMS).

Document management system (DMS).

Comparison Between SAP and Oracle –

As already discussed above that currently SAP and Oracle are the two most dominant ERP vendors in the market, so to select any one of them we have to do a detailed study about each of them and compare the two on the basis of some characteristics and finally evaluate that which one is best suited for our organization and implemented in it. We will analyze each of the products on the basis of business functions, technology platforms, cost, and ease of use.

General functions and applicability-

SAP is doing its business longer than oracle as SAP was started long before and oracle is new in the market in comparison to SAP. In my view, erect industry-specific functionality is where the rubber hits the path as the hope of enterprise applications unfolds. The ability of an ERP package is to know and take the services of the individuals and to build them according to their requirement into an application which is essentially customized according to the customer, for the individual business in the organization of that individual. This states that although a strong service infrastructure is needed, the vendors also need a large range of services with them to accumulate the further the merrier. SAP takes advantage here as it has skill in 28 verticals and has the software functionality to prove. To make available all the functions as usable for future is one of the task of SAP and if it is done than it will built more customers and can have a bright future. On the other side oracle provides functions that are deep vertical and have a partnering strategy, but this functionality is far behind the SAP functionality. So now oracle is trying to fill the blanks by having more partner products but still it is known that what the products will do and what are their applications we can say that SAP is at the advantage of the two. (SAP vs Oracle)

Technology-

Oracle’s applications are flexible and also configuration is possible, therefore its technology mound for its applications. Although the best of the solutions were there in the market but still oracle was able to embrace in the middleware market early on as company had strong middleware products. Also the oracle organization was working to simplify and to open its application architecture. Oracle provided a product which was easy to install and maintain for the customer which was its benefit. Also oracle is creating a unified data model. On the other hand SAP has five different data models for the customers to work on. If any organization wants a single source with SAP then it has to build a data ware house. But oracle makes data warehouse optional for its customers which result in faster access to information.

Cost-

Total cost of ownership (TCO) comprises of technology, extensibility and implementation and ROI. Now the question is which is better, SAP or Oracle? As Oracle’s applications are extensible and flexible it lightens the want for customization. Due to customization deployments which are coming faster, and also due to lower consulting costs of the internal resources the business operations are becoming quicker. The effect of all these attributes results in a lower cost of ownership which everyone wants. As all these attributes are present in the Oracle technology so its cost is lower than SAP’ and not only the cost is lower but the average three year total cost of ownership of Oracle is 48% less than SAP’s, which is a huge difference in the cost of the two.

Ease of use-

As we know that the ERP system can’t satisfy all the customers, but due to flexibility of the applications of oracle it has attracted many customers and organizations towards it. Oracle also rises and has benefit in several areas like extensibility- web applications, workflow and reporting. The web applications of Oracle are so flexible that the company’s IT department can personalize the web application. For an example a web application named iProcurement can be used in such a way that someone logging from any part may get the proper information which is suitable for them. One more example of Oracle’s web application is iExpense. With the help of this application many organization used it to modernize their business processes related to employee expenditure and reimbursements. Also iExpense is an application which is simpler and easier to work than any SAP application.

Evaluation and Conclusion-

Here we will discuss that which is the better product of the two, some thinks that SAP is better but on the other hand many support Oracle. Both SAP and Oracle have some positive as well as negative points, so by evaluating the two we will finally conclude our report on the basis of some points-

Which vendor to select-

According to me Oracle is better than SAP, so one should select Oracle for the organization, as by studying the comparison above we can easily evaluate that oracle out beats SAP in all most all the fields. We discussed many characteristic of the two and finally we can say that Oracle is the better of the two and we should select Oracle to implement in our organization.

Why to select Oracle, on what basis-

Now as we have concluded that Oracle is better than SAP, so how we reached to this conclusion, what were the reasons. Some of the reasons are that Oracle applications are easy to use and can be deployed successfully in short time frame. As discussed many times its application are highly flexible and configurable. SAP basically is an closed circuit and it is too massive to handle, on the other hand Oracle solution are user friendly and also programmer friendly and also it is open and offers all the interfaces to many application, so it is at benefit in comparison with SAP. Also one of the main reasons is that the total cost of ownership (TCO) of Oracle is less than SAP and also working on Oracle applications is easier than working on SAP applications. The positive point for Oracle is that its implementation has taken less time and also at a lower cost. Oracle was established in 2004 and since 2004 it has occupied over 30 other companies as a part of its strategy. Also when customer review was taken then also the result was positive for Oracle and customer were satisfied with Oracle then SAP. Also the profit during the past year has increased 33% for SAP which is far less than Oracle which is 47%. So we have seen both and finally we can say that Oracle have a better offering for its customer. (SAP vs. Oracle applications???, 2011)

Does size or domain influence the decision-

No, according to me these factors are not of much importance that they will influence the decision to select the ERP package. Whether it is a small or large organization or it may be manufacturing industry or a service industry their working and aim is almost same. Everyone wants to have more profit, attract more customers, reduce its cost, want to satisfy the customer, and want to have easier work. These are the basic objectives of any firm or organization only they may differ in some extent but not much difference exists between them. SAP and Oracle applications are made in such a way that they are suitable for almost all the industries so size and domain doesn’t matter in selecting the ERP package only the concern is taken on quality, cost, ease of use etc.

We should choose a full ERP installation or we should pursue customizations from the vendor-

According to it, if one has to select an ERP package one should opt for customization from the vendors rather than installation of the full ERP package. The reason for this is that if we go for a full ERP installation then we have to accept what that ERP package gives and offers us. It may have many things which we don’t want or it might miss something which is required by us. Also we have to use it according to its manufacturer as he has designed it according to him and keeping the entire set of customers in mind. As the package is not made for an individual but for all the customers who can buy it so it will have the features and applications according to the common use of people and not according to the specific use. But if we opt for customization from the vendors, than we have lots of benefit. As it is made according to the individual’s choice, so one can make changes in it. He can add and delete application according to his use. It is made according to his specification and according to the need of the organization. Also its working is set according to what an organization want. So we can easily analyze hare that which one is better and we can say that customization from vendors is better than full ERP installation and the reasons for this we have already given above.