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The ten biggest differences between Oracle Fusion Cloud Application Suite and SAP S/4HANA

The SAP user community magazine e3zine published an interview with some of the leading industry analysts. The article, “Composability—Quick Wins in a World of Constant Change,” highlights the ten biggest differences between Oracle Fusion Cloud Applications Suite and SAP S/4HANA. Here’s a summary:

1. Composability

The idea of composability consists of three key characteristics: Composable thinking, which ensures creative thinking is never lost; composable business architecture, which ensures flexibility and resiliency; and composable technologies, which are the tools for today and tomorrow. Oracle’s applications suite is modular and composable by design, but engineered to work together for seamless extension. In contrast, some experts say SAP S/4HANA is monolithic.

 

Why it matters: Business runs on technology, but technology itself must be composable to run composable businesses. Oracle recognizes the importance of suitable technology, and we’re focusing on helping customers with data and managing, securing, and acting on the world’s most important datasets. That’s what makes Oracle Fusion Cloud Applications the software-as-a-service solution that puts the emphasis on service.

The Oracle solution proved to be the most complete, modern suite of enterprise applications on a common platform that we were able to identify. It allows us to concentrate on our business and not on the technology that supports it. That’s what we were looking for.

Bruce Schinelli CIO, TTX

2. View change as an opportunity

Traditional business thinking views change as a risk, while composable thinking switches up that idea to understand changes and protect your business by innovating. CIOs leading high-composability enterprises recognize that business conditions, from customer demands to financial models, often change. So they empower the teams closest to the action to respond and reshape accordingly.

Why it matters: Business composability is an antidote to volatility. Sixty-three percent of CIOs at organizations with high composability reported superior business performance compared with peers or competitors in the past year. Companies that can take advantage of tremendous amounts of data are proving to be more agile and resilient and more capable of innovating, especially as the world recovers from the pandemic and other disruptive market challenges. Oracle Cloud Infrastructure (OCI) is a digital business platform with integrated, next-generation capabilities that help make it easier to orchestrate from end to end, so you can drive value. Such digital business platforms help companies innovate with technology catalysts, such as artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), blockchain, new user experiences, and the ability to extend cloud applications and build your own cloud applications, without affecting updates.

With Oracle Cloud continuous updates, our mantra has been to ‘adopt and adapt’—adopt the updates and adapt our processes to meet new challenges. The solution is very strong.

Peter Haddow Capital Investment Finance Manager, Scottish Water

3. Single data model

Oracle has a unified data model, meaning all data is in one place and defined in one—and only one—way. With Oracle Fusion Applications, we only define master data, such as customer, employee, product, and supplier, once. No matter which pillar or module uses this master data, it always has the same definition. That is not the case with SAP S/4HANA.

Why it matters: A single data model is not just an IT feature; it actually helps end users. When users want to create a report or analysis, they will know that “customer,” “employee,” “product,” and “supplier” are defined once. So when they pick one of these for a report or analysis, they will always have the right one. That seems logical, but you can only achieve this level of consistency with SaaS designed and built from scratch. SAP hasn’t done that. SAP solutions, such as SuccessFactors, Ariba, Concur, and Fieldglass, are separate products, each with its own data model and not part of SAP S/4HANA.

ArcelorMittal turned to Oracle Cloud HCM suite because it needed a comprehensive, intuitive, enterprise-wide solution that could handle recruiting, onboarding, competence management, learning, succession planning, performance management, and strategic workforce planning—without any assistance from IT.

The basics, like those built into Oracle Cloud HCM, were much stronger than those of the competition. Oracle clearly understood how things should work.

Koen Mols HR Excellence Program, ArcelorMittal

4. Continuous innovation

With Oracle Fusion Applications, you can rely on quarterly updates that improve our software and provide innovations, functions, and technologies, such as AI, ML, chatbots, digital assistants, and more. That’s not just true for the cloud applications—we also update the underlying platform every quarter. Since Oracle Fusion Applications run on OCI, every quarterly applications update comes with a synchronized update of the OCI platform.

Why it matters:Research from Boston Consulting Group found that over the last 14 years the most innovative companies outperformed the broader market on shareholder return by 5.6 percent. Innovation, perhaps more than anything else, is the real engine of business success, and it pays big dividends. Cloud technology is a great accelerator to help companies discover new markets, products, and ways of doing business.

Customer example: Schneider Electric needed a tool that would work on a global scale, with worldwide support from the vendor during and after implementation. So Schneider Electric selected Oracle Fusion Cloud HCM with an SAP ERP backbone.

5. Digital era

Traditional, industrial-era businesses thrived during a time of relative stability and slow, predictable change. Back then, changes in the business typically were a result of changes in customer demand or financial models. During this period, many companies chose SAP to run their businesses.

In contrast, digital-era businesses face constant uncertainty and continuous change. These companies optimize for adaptability, knowing that change comes from anywhere—new products and technologies, disruptions, governance, employee and customer experiences, and consumer perception via social media.

Why it matters: Modern companies rely on digital technologies to boost efficiency, power breakthroughs, and stay competitive in a fast-moving environment. To jump-start innovation—and keep going it over time—the most successful companies unify their data and processes on a single platform. This integrates the entire value chain, including idea capture, product development, supply chain planning, manufacturing and maintenance, and post-delivery customer service.

Oracle fits into [our] strategy and complements our existing journey. There will be applications staying in the on-premises world, and we need to invest in simplifying them. It fully supports our cloud strategy, supports consuming technology as a service, and comes with significant financial benefits.

Bernd Leukert Head of Technology, Data and Innovation, Deutsche Bank

6. User experience (UX) combined with data insight

Western Digital Powers on with Oracle Fusion Cloud ERP (4:45)

Data is the currency of the experience economy. The ability to organize it, gain insights from it, and then use it as fuel to power contextual experiences across the customer journey—whatever path that takes—is critical. Fusion Analytics is a family of prebuilt, cloud-native analytics applications for Oracle Cloud Applications that provide line-of-business users with ready-to-use insights to improve decision-making. Without having to code, teams in HR, finance, procurement, and operations can enrich their analytics using embedded ML and additional data from other sources beyond Oracle Cloud Applications. An example of superior user experience is Oracle Subscription Management which uses financial modeling to determine the profitability and price elasticity of offering a subscription service to your customers. This fully integrated, cloud-based system simplifies the management of contracts, billing, and revenue. Self-service functionality lets customers control their subscription orders. With SAP, however, you’ll get different modules with different data models and different user experiences.

Why it matters: Thriving in the experience economy requires a partner that has data at the core of its business. For more than 40 years, Oracle has helped our global customers manage, secure, and act on the world’s most important data. Homogeneous and consistent SaaS offerings from Oracle help support your business and improve end-user productivity. At Oracle, an enterprise-grade customer intelligence platform isn’t about point solutions; it’s about expertise in managing data at scale.

Business users are manipulating data using visualizations in Oracle Analytics. An unexpected benefit was that users identified some anomalies, helping WD realize better quality in the data. We were able to have better insights and better forecasts as a result.

Bill Roy Senior Director of EPM and Business Intelligence, Western Digital

7. Integration

Composability needs to extend throughout the technology stack, from infrastructure that supports rapid integration of new systems and new partners to workplace technology that supports the exchange of ideas. SAP has taken a strategy where, initially, cloud growth was acquired with Concur, Ariba, and SuccessFactors. Yet industry experts say that the most business-critical core – ERP, manufacturing, supply chain, and industries – solutions were not redesigned for SaaS. For SAP customers, these challenges could result in architectural complexity and integration issues, making the associated costs of a cloud journey with SAP much higher than expected.

Why it matters: Connected enterprise planning gives leaders the decision support to act quickly on real-time information and stay ahead of the competition by pulling together data from across lines of business. True integration requires an end-to-end, planning-to-execution, closed-loop system. Oracle’s ability to integrate the execution details from the supply chain, manufacturing, logistics, and order management systems helps planners adjust to change and continuously improve long-range planning. The ultimate goal is to know sooner, act faster, and adapt to change.

“[Fusion Applications] is an integrated environment, from product development all the way to customer feedback. If Workday, SAP, and Salesforce really want to continue to nip at the heels of Oracle Cloud, they're going to have to invest in developing more comprehensive and more integrated suites.

Craig Halterman Vice President and CIO, Cohu

8. Complete cloud suite of applications

Companies need to move toward a portfolio that is more adaptable to business change, with composable applications that can be assembled, reassembled, and extended. Oracle provides an entire suite of composable public cloud applications: ERP, EPM, CRM, HCM, and SCM. Another IT company might be able to offer one or two cloud applications, such as HCM and financials, but they can’t provide a complete suite of integrated business capabilities that Oracle can with Oracle Fusion Cloud Applications.

Oracle offers SaaS-based, business-centric applications in a hybrid environment to complement multiple on-premises footprints. Oracle’s solutions can have an immediate impact, and we can seamlessly extend your system over time.

Why it matters: Many companies are moving from on-premises systems to the cloud, but you cannot expect them to do this overnight. It doesn’t have to be a rip-and-replace scenario. You can deploy Oracle SaaS while your on-premises backbone solutions are still up and running. For example, you can start with Oracle Cloud Enterprise Performance Management (EPM) for planning, budgeting, and tax reporting connected to your on-premises ERP. Add more cloud applications when you’re ready.

Customer example: A local authority in Northeast London (UK), London Borough of Waltham Forest employs around 3,000 staff who provide public services, from council housing to road works. Challenged to provide improved services by modernizing ways of working, they decided to shift to Oracle Fusion Cloud ERP, EPM, and HCM to replace an aging SAP system. The effort will drive greater efficiencies through accurate and timely business information and an engaged and better-supported workforce.

9. Modular vs. ERP-centric

On-premises solutions were designed in the 1990s; they are ERP-centric. So are the best practices delivered with these applications. On-premises ERP has to be implemented first before you can use any other module. This creates dependencies and can lead to suboptimal environments. For example, you often see companies running multiple instances of the same on-premises ERP software in every business division or region. If legacy software were flexible enough, you wouldn’t need multiple instances of the same software. Not only is it expensive to run multiple instances, but it could also lead to security vulnerabilities. Many companies that want to reduce costs by moving back to a single instance often find out that this option is extremely complicated. In addition, the alleged SAP “best practices” are not evolving fast enough to support SaaS and the digital economy.

Why it matters: Experts have lamented that monolithic enterprise applications, such as SAP S/4HANA are nearly impossible to change. That’s a huge problem for today’s businesses that need to be able to respond quickly as conditions change. Whether it’s merging two business units within a company, starting a new line of business, or divesting part of the business, your business applications can’t hold you back.

Customer example: Wolseley, a UK-based distributor of plumbing, heating, and ventilation, chose Oracle Cloud SCM because the integrated components of and roadmap for Oracle’s cloud-based application suite aligned with the stock forecasting, distribution center management, procurement, and inventory management outcomes Wolseley needed to further improve its customer service.

10. Customers learn from Oracle

We run our own finances on Fusion Cloud ERP, which means that our customers have the advantage of our insight, experience, and best practices. Our customers also benefit from the Oracle Cloud Customer Connect community. With more than 200,000 members, this network offers access to the collective knowledge of OCI customers and product experts. Members communicate with Oracle product development teams directly. In fact, the majority of our new features have been suggested by our customers.

Why it matters: We’re ready to help you transform finance. We can show you how we put Fusion Cloud ERP to work for us, and what it can do for you. For example, with Cloud ERP and EPM with built-in AI and ML, we close our books and report earnings in 10 days–twice as fast as SAP or Workday. And we help our customers get the same benefits with Oracle@Oracle, our proven business transformation framework.

Customer example: Mazda Motor Logistics’ parent company, Mazda Motor Corporation, decided to go with Oracle for three reasons: Oracle’s global support and flexible solutions, a software solution design that works across Mazda’s entire global organization, and Oracle’s support for competence centers, with the Oracle Transportation Management center located in Europe. Mazda uses the competence center, or center of excellence, model to concentrate expertise in a specific software system in a single geographic location that can support Mazda and its subsidiaries worldwide.

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Sources:

Peter M. Färbinger, “Composability—Quick Wins in a World of Constant Change,” e3zine, December 2021.

Marissa Gilbert and Geoff Scott, “Pulse of the SAP Customers 2022: What’s on the Minds of SAP Customers,” American SAP User Group (ASUG), February 17, 2022.

“Many [customers] complain of a patchwork of programs and lack of proper integration. According to a survey by the DSAG user group, just a third of customers trust the product strategy from Walldorf.” Der Spiegel Magazine, “The dark side of SAP,” November 13, 2021. (in German)

‘The extinction of the monolithic SAP system. How will your future ERP landscape evolve beyond 2025’. ResultingIT, April 2022.

“Selecting the right ERP system is critical, as one technology misstep impacts the future for years to come. Digital resiliency requires modern, modular, and intelligent ERP.” Mickey North Rizza and Nadia Ballard, “The right ERP system enhances business value,” IDC, November 2021.

“Digital enterprise needs a new generation of cloud applications that are smarter, fully integrated, deliver faster time to value and are easy to onboard and use. Oracle Fusion Cloud Applications exemplifies this new breed of business applications that are built for the cloud and infused with autonomous capabilities.” Frank Della Rosa, “Oracle Innovation Manifests in a New Generation of Cloud Applications,” IDC, September 2020. (PDF)

Boston Consulting Group ranks Oracle the 19th most innovative company in the world across all industries, up 10 places from 2020. SAP is ranked at 40th, down 13 places from 2020. Boston Consulting Group, “15 Years of the Most Innovative Companies,” 2022.

“The acquisitions were put under a single [S/4HANA] brand but not on a single technology platform, much to the dismay of SAP customers.”, Christina Kyriasoglou and Eva Müller, “Why SAP is falling behind,” manager magazin, February 23, 2021. (in German)

“Many [customers] complain of a patchwork of programs and lack of proper integration. According to a survey by the DSAG user group, just a third of customers trust the product strategy from Walldorf.” Tim Bartz and Christian Bergman, “The dark side of SAP,” Der Spiegel Magazine, November 12, 2021. (in German)

“SAP is struggling to survive in a technology world where software becomes a service from the cloud and artificial intelligence is changing business processes from machine maintenance to accounting. A world in which IT projects can last at most a few months and complex business applications should look like chic smartphone apps. In short: In which not only new technology, but also new thinking is required.” Christof Kerkmann, “SAP in the midlife crisis: How Germany's most important tech group is fighting for its future,” Handelsblatt, April 14, 2022. (in German)

“SAP is in a delicate phase of change.” “SAP boss Klein is offering customers a switch to the cloud solution S/4Hana. But this has not been very popular so far” “IDC believes that about half of SAP’s 35,000 enterprise customers may indeed consider an alternative vendor to go to cloud.” Wirtschaftswoche, “Once SAP, always SAP? Those days are over”, Feb 12, 2021. (in German)

“The core S/4HANA product cannot bring significant growth for SAP.” Joachim Hackmann PAC, “Why SAP is losing the connection”, February 18, 2021. (in German)

SAP, “Overview of UI Technologies and Key Features,” https://help.sap.com/doc/saphelp_nw74/7.4.16/en-us/4f/47faaced4b49e985dd31298bd3775f/content.htm?no_cache=true

“The numbers show how unhappy SAP customers are being forced to migrate to S/4HANA. Many SAP customers don’t see any business value that warrant a migration.” Bo Lykkegaard, IDC analyst, February 12, 2021 in Wirtschaftswoche. (in German)

“There are many reasons for the inherent complexity that exists in the cloud model of service-based computing: The term “cloud” means more than one thing [at SAP], many different cloud platforms exist, each cloud has its own instance and volume, it’s not always clear what data should live in the cloud, how will the cloud take us to the next generation?” American SAP User Group (ASUG), “Why Is the Cloud Still so Complicated?” August 10, 2019.

Oracle, “Customer highlights from Q3 FY22 earnings,” March 10, 2022.

“Oracle Fusion Cloud Applications are viewed as more flexible than S/4HANA, which overall is a rigid product that is harder to configure and extend.” Eric Kimberling, “Top SAP S/4HANA alternatives to add to your ERP shortlist,” TechTarget, April 8, 2022.

“The downside of S/4HANA’s standardized business processes is a relative lack of flexibility. For example, when comparing SAP S4/HANA vs. Oracle ERP Cloud or S/4HANA vs. Microsoft Dynamics, we find that SAP is often not as flexible as other products.” Thirdstage Consulting Group, “Independent Review of SAP S/4HANA,” July 10, 2020.

“Particularly in the past year, where responsiveness and flexibility were of utmost importance to customers, Oracle came through and was rated highest among its peers.” Bonnie Tinder, “(Video) SAP, Oracle, and Workday: Who’s #1?” Raven Intelligence, March 29, 2021.

“Lack of flexibility and agility with legacy solutions to address dynamic business needs.” Forrester Research, “The Total Economic Impact™ of SAP Commerce Cloud and SAP Customer Data Cloud,” November 2020.

Charles Homs, “Why Oracle closes its books twice as fast as SAP and Workday,” Oracle Modern Finance Blog, June 21, 2022.