ERP solutions may seem interchangeable at first glance, but key distinctions emerge when you look closer, particularly between two leading platforms: SAP and Microsoft.
In his own words, Richard Taylor, Partner at Birchman, shares his perspective on what differentiates these two major ERP ecosystems, highlighting the strengths, challenges and ideal use cases for each.
#1: SAP Cloud ERP S/4HANA: Built on Five Decades of Expertise
SAP has leveraged its five decades of ERP experience to “develop scalable and modular industry and localised solutions”. Their offerings are driven by a comprehensive best practices model, with configuration options facilitating the implementation of these proven strategies.
For customisations, or “want to ‘bespoke’ the solution” as Richard says, “then you do so outside of the core solution itself using tools such as the SAP Business Technology Platform.
Partners play a vital role with SAP implementations bringing both industry and localised knowledge to a company, and ushering organisations toward best practices and facilitating digital transformation.
#2: Microsoft ERP: A Platform for Bespoke Solutions
On the other side, “The background and heritage of Microsoft is essentially a development platform” Richard recognises as a foundation that shapes its ERP approach. The company collaborates with partners who craft tailored industry and localised solutions.
Microsoft’s agile application development and implementation methodologies underpin their strategy, guiding projects through requirements, design, and build phases.
#3: Microsoft ERP: Balancing Pros and Cons
Microsoft’s allure lies in its adaptability; “the biggest advantage from that perspective is that no matter what your requirements are” Richard says, “the answer is yes”. Cost-wise, lower investment in solution development translates to lower licensing costs.
However, the allure of bespoke solutions carries drawbacks. By tailoring solutions, Richard explains “you risk missing the opportunity to realise the value of implementing the ERP solution or maximising the value of implementing the solution. And the cost of implementing and maintaining the solution can be higher”.
Furthermore, dependence on partner-developed industries and localised solutions could lead to vendor lock-in or require collaboration with multiple partners for complex needs, potentially impacting project stability.
#4: SAP Cloud ERP S/4HANA: Benefits and Challenges
Richard highlights three major advantages of implementing SAP Cloud ERP S/4HANA
- Adoption of Best Practices – SAP’s frameworks enable organisations to drive process improvement and realise tangible business value.
- Separation of Customisations – Enhancements sit outside the core solution, ensuring seamless adoption of SAP’s continuous innovations and updates.
- Scalability and Flexibility “So often, customers are worried that SAP is for larger organisations” Richard explains, “however, the scalability and the modular nature of the licenses mean that you can take as much or as little as you require” catering for organisations of all sizes.
With SAP you may want to start with the base functionality, but as you grow it allows you to add functionality to meet your needs.
The downside of the SAP approach is that by adopting best practices, it entails a transformational journey that demands robust project sponsorship, active business change and ownership. This shift is more than an IT endeavour; it’s a holistic business project.
#5: Choosing the Right ERP for Your Organisation
Microsoft’s appeal lies in lower licensing costs and tailored flexibility. “If you’ve got very unique and bespoke requirements, very specific requirements, then Microsoft is best solution for you” Richard advises.
On the other hand, “If you’re looking to adopt best practices and drive significant business improvement, the SAP is your best option”. SAP’s commitment to comprehensive solutions and industry best practices positions it as the go-to option for organisations seeking substantial business improvement and operational optimisation.
Conclusion
Choosing between SAP and Microsoft ERP solutions involves a delicate balance of cost, customisation and transformative potential. While Microsoft offers flexibility and cost efficiencies, SAP provides structure, scalability, and a proven pathway to transformation. Ultimately, the right choice depends on your organisation’s goals, appetite for change and long term vision. Consider the pros and cons, align them with your goals and make an informed decision that sets your business on the path to success.
If you’re ready to explore how SAP can drive measurable value in your business, contact Birchman today to begin your transformation journey.
