When considering new enterprise technologies, many of our clients consider SAP S/4HANA vs. Oracle ERP Cloud in their ERP software evaluation process. In fact, our upper mid-market and larger enterprise clients choose between these two systems on an extremely frequent basis.
In the most recent rankings of the top ERP systems, it’s not surprising that both solutions did well. S/4HANA ranked #6 and Oracle ERP Cloud landed at #3, although they both finished in the top two in terms of market share. While some might argue they should have finished higher in our rankings, below are some independent analysis of how these two leading industry titans compare to one another.
The common strengths of SAP S/4HANA and Oracle ERP Cloud
For some organizations, S/4HANA and Oracle ERP are the best options because of their common strengths. For example, both products are capable of scaling to meet the needs of larger, complex, and more diverse organizations. Companies that operate internationally, have diverse product lines, and manage supply chains are naturally going to gravitate to these two solutions. This is why SAP and Oracle have historically had such a strong foothold in the Fortune 500 space.
The common weaknesses of SAP S/4HANA and Oracle ERP Cloud
For some organizations, SAP and Oracle are a natural best fit for their needs. However, it is important to also be aware of their weaknesses. Both products are knee deep in their transitions from well-established legacy products to these newer flagship products, which is why both products suffer from a relative lack of functional maturity.
This is true not only related to their own legacy products such as ECC and eBusiness Suite, but also when compared to more established products, such as Oracle NetSuite, Plex Systems, and others that have a jumpstart on migration to the cloud. We see this relative lack of maturity wreaking havoc on their customers’ ERP implementations as they navigate the holes and deficiencies in their products. Best of breed ERP solutions are a common solution to address this problem.
Standardization and harmonization of business processes
SAP is the gold standard when it comes to standardizing and harmonizing business processes. It has an advantage over Oracle ERP in that it drives a certain amount of structure and rigidity – for better or for worse. This is part of what appeals to larger organizations that are trying to drive a certain amount of commonality throughout their global operations.
The downside of this advantage, however, is that it makes organizational change very difficult and painful. Anytime you are forced to accept someone else’s business processes – whether internally or because it’s just the way the software works – employees are going to resist the changes in some way. This is why an effective organizational change management plan is so important for SAP S/4HANA implementations – even more so than for those implementing Oracle ERP Cloud.
On the slip side, Oracle ERP Cloud has the advantage if it is flexibility that you value. Whether you are a decentralized company with independent operations or a company that values speed and nimbleness over structure and standardization, Oracle ERP is going to have the slight edge.
Just as S/4HANA requires effective organizational change management to mitigate the pains of rigidity, Oracle ERP Cloud implementations requires effective change management as well – albeit for different reasons. We often times see the solution’s flexibility mask a deeper issue: resistance to change. The risk of Oracle ERP implementations is that even though you can change the software more easily than with S/4HANA, it doesn’t mean you should.
While most ERP vendors are trying to force its customers to the cloud – including Oracle – SAP still offers multiple deployment models with S/4HANA. Rather than requiring a pure cloud or SaaS delivery, SAP allows customers to choose on-premise, cloud, or SaaS. We find that Oracle on the other hand rarely offers on-premise options – except where there are deficiencies in its product and only a legacy on-premise solution will address those needs.
While SAP may have the advantage in this category, it also has some liabilities. The company may not require customers to move to the cloud before they are ready, but they are certainly forcing existing customers to migrate to S/4HANA before they are ready. SAP’s 2025 deadline is one of the more aggressive mandates that we have seen in the industry in recent years.
Ease of employee adoption
Feedback from our clients indicate that Oracle ERP Cloud has the advantage when it comes to ease of employee adoption. The product’s user interface and flexibility generally make it easier for employees to learn and use than S/4HANA’s more rigid interface and general structure. This is also true when it comes to the initial implementation of the software.
Even though Oracle may have the advantage when it comes to ease of employee adoption, organizational change is still a very critical requirement for success. In addition to the reasons mentioned above, Oracle ERP and S/4HANA require a greater level of discipline, integration, and general process changes – all which require an intense focus on organizational change.
Data and analytics
The ability to translate data into information that can be used for better decision-making is becoming a hot commodity in the enterprise technology space. For decades, companies have been adapting ERP systems to gather more intelligence and data, but few have mastered the craft of knowing how to find value in all that data. This is becoming even more true in today’s age of internet of things, artificial intelligence, and shop floor automation and data capture.
With this in mind, Oracle has historically been very strong in data and analytics, especially since its acquisition of Hyperion years ago. Its Enterprise Performance Management offering is a strong complement to the core ERP system, making for more effective reporting, analytics, and business intelligence capabilities than with S/4HANA.
Alternatives to SAP and Oracle
With this comparison in mind, it is also important to note that there are many viable alternatives to the SAP vs. Oracle debate. Many leading ERP systems have become more viable over the years, and there are more established cloud ERP systems that may be better fits for your organization.
For example, here are a few other product comparisons that are commonly of interest with our clients, along with a link to each:
- SAP S/4HANA vs. Microsoft Dynamics 365
- Oracle ERP Cloud vs. Oracle NetSuite
- Microsoft Dynamics 365 vs. Oracle NetSuite
- Overview of the Top 10 ERP Systems
These and other resources on our website and my YouTube channel will help you navigate the plethora of options available to you.
SAP S/4HANA vs. Oracle ERP Cloud: Which is better?
As you may have gathered from the above analysis, there is no clear “winner” in the SAP S/4HANA vs. Oracle ERP Cloud discussion. We have many clients where S/4HANA is clearly more aligned with their longer-term vision and strategy, while we find that Oracle ERP Cloud is a better fit for others. It all comes down to unique needs, strategies, and goals of your organization.
Please feel free to contact me to pick my brain on the pros and cons of these and other ERP systems available in the market. I am happy to be a sounding board as you continue your digital transformation journey!