SAP alternative: What are the sensible ERP options?
An overview!
When it comes to Enterprise Resource Planning (ERP), most people think of SAP first. The DAX-listed company has virtually become a synonym for enterprise software. However, while the Walldorf-based ERP is the market leader for large companies, medium-sized companies are increasingly asking themselves whether there is an SAP alternative.
The flagship solution S/4HANA is clearly aimed at corporations, and even the solutions geared towards medium-sized companies, such as SAP Business ByDesign or SAP One, are often too complex and correspondingly cost-intensive. Even the implementation usually goes over budget – and that’s without taking into account hardware, IT support, security and, above all, customizations.
But let’s be honest: does it have to be SAP? The good news is: no! There are SAP alternatives for medium-sized businesses that cost less and offer you exactly what you really need.
Why should I consider alternatives to SAP?
In fact, there are numerous reasons to choose an SAP alternative:
- High implementation costs: As the undisputed market leader, SAP is correspondingly expensive.
- Vendor lock-in effect: The strong dependency on one provider limits flexibility and means that you have to accept price increases.
- Complex system architecture: Customizations are extremely expensive, while at the same time many functions remain unused and yet have to be paid for.
- Necessary expertise: SAP systems require specialized personnel and intensive training for all employees.
- Maintenance costs: Updates and system maintenance often require external expertise and incur high running costs.
What are the SAP alternatives?
SAP is not the only ERP for medium-sized companies available, but there are various SAP alternatives available to you. These include individual tools that address specific problems, ERP solutions from SAP competitors, industry-specific software and hybrid systems that combine standard applications with individual solutions in one system.
Individual solutions & tools for specific problems
Implementing specialized individual solutions initially appears to be a cost-effective and simple way forward. Such systems focus on specific business areas such as financial accounting, merchandise management or human resource management. The big advantage is that implementation is comparatively quick and cost-effective.
However, significant disadvantages become apparent in day-to-day operations: employees have to switch between different systems. The lack of integration between the systems leads to media disruptions, double entries and corresponding efficiency losses. Since each system maintains its own database, data consistency is difficult to ensure.
Instead of efficiently digitizing processes, they only create new interfaces and gaps that employees have to bridge.
Alternative standard software for companies
Enterprise solutions such as Microsoft Dynamics 365 or Oracle NetSuite offer comprehensive integration of all business processes and are the closest you can get to the classic SAP system. These systems have a cloud architecture, offer features such as AI in ERP and guarantee regular updates (via licenses and corresponding maintenance contracts).
However, as with SAP, you will have to dig deep into your pockets for implementation. Licenses, training, customization – basically, you are just trading one big name for another. And depending on it (keyword: vendor lock-in), you are making yourself dependent on it.
An industry-specific solution as an alternative to SAP
ERP industry solutions are an exciting compromise. Such an SAP alternative is already tailored to the requirements of certain industries and comes with the appropriate functions. Since many industry-specific processes are already predefined, it enables faster implementation than classic enterprise solutions.
A good example is the development of the solution XPandit for efficient order processing in electrical companies, which we supported as a development partner of Braso AG with a software team.
However, you may have to compromise on the available range of functions and scalability. For example, adaptation difficulties may arise when changing business models or expanding into new business areas, and the configuration options are also limited when it comes to unusual or individual requirements. This makes it all the more important to clarify your requirements in advance.
Hybrid ERP solution instead of standard software
For medium-sized companies, not using SAP and developing an individual ERP alternative is usually impractical. In many cases, however, a hybrid system is a sensible SAP alternative. This means that you continue to use proven standard solutions and supplement your IT setup with individually developed software that reduces manual interfaces and consistently digitizes processes.
This way, you can accurately map all your business processes without compromising on functionality – without paying for expensive customization of your ERP or incurring license costs for applications you don’t actually need. Sure, development requires an initial investment and time for implementation, but significant cost advantages arise in the long term.
Which is the right SAP alternative for your company?
Various SAP alternatives are good, but the central question remains unanswered: Which solution is best suited to your company? We cannot and do not want to give you a general recommendation here, because the answer should always be based on a thorough analysis of your specific situation. You should not only consider the current requirements, but also the potential for development. The following key questions, for example, are important:
- How many employees use the system actively? Larger teams often require integrated cloud solutions with role-based access control.
- Are your processes already standardized or highly customized? The more customized the processes are, the more adaptable the ERP architecture must be.
- How developed is your IT infrastructure? Isolated stand-alone solutions can lead to data inconsistencies and should be eliminated first.
- What budget is available in the short and long term? This is crucial when deciding between cost-efficient SaaS models with pay-per-use licenses, capital-intensive on-premises systems, or hybrid systems with custom software that require an initial investment but are significantly more cost-effective in the long term.
- How will your company develop over the next three to five years? Planned expansions require scalable ERP systems, possibly with multilingual functionality.
Because the topic is complex, we recommend that you do not take stock of and analyze your business processes and goals on your own. An independent partner can help you identify needs and potential and find solutions for SAP alternatives.
Efficiency instead of name dropping: Work more efficiently and save costs with the right SAP alternative
There are SAP alternatives that don’t bear the big name of the top dog, but can be more efficient and cost effective. Between other well-known providers and special industry solutions, we can only strongly advise against one option: isolated solutions that solve individual problems and create additional manual interfaces.
Many companies benefit most from an individual or hybrid ERP solution that combines off-the-shelf solutions with individual applications on an efficient platform.