Why Oracle is replacing SAP?
In recent earnings calls, Oracle Chairman and CTO Larry Ellison explained how many companies have switched from SAP to Oracle Fusion Cloud Applications. Initially, 100 companies were identified, and in the 2021 fourth quarter earnings call1, the total number of companies that replaced SAP with Oracle has grown to more than hundreds.
The investments that companies have made in SAP ERP were very significant. So why would these companies decide to switch? What are these companies getting from Oracle that they don’t seem to get from SAP? And how does the transition work? Let’s take a deep dive.
Why are customers leaving SAP and S/4HANA for Oracle ERP?
Once SAP started making its many acquisitions, they promised synergy and integrated business processes. SAP hasn’t delivered. For example, SAP’s purchase of Ariba in 2012. You may have noticed that SAP didn’t really integrate its core modules with Ariba. The same thing happened with SuccessFactors, Concur, Qualtrics, and all the other acquisitions.
While those solutions each individually offered good functionality, it was up to the customer to integrate them with the core SAP ERP. This quickly became an expensive proposition. But what’s worse: When you create the integration yourself, you soon find out that it is a barrier to upgrades. The upgrades that SAP provides are not easy to consume because you have to check all the integration points, business processes, and data models. As a result, many SAP customers have not upgraded. And customizations made that even worse. SAP was the king of integration, but it’s not anymore. This created issues with SAP ECC and Business Suite, but it’s also an issue for companies considering migrating to S/4HANA.
At first glance, the SAP S/4HANA private cloud seems to be an option to move to the cloud. But it’s the same on-premises software as SAP S/4HANA. In other words: It wasn’t created with cloud in mind. Does that matter? Here’s what diginomica’s Brian Sommer says about this hosted legacy system:
By hosting an older solution on a public cloud or hyperscaler platform, these vendors will claim they are providing both a public cloud and a private cloud version of their apps. However, most buyers see this repackaging for what it is. It’s an old product being tarted up and not a real cloud-first application solution."How Oracle's latest announcements change multi-tenant vs on-premises decisions,” 16 Sept 2020
6 benefits of Oracle Fusion Cloud Applications
Clearly, SAP’s hosted legacy applications can’t support today’s modern business environment because they weren’t designed for the cloud. On the other hand, solutions that are designed for the cloud, such as Oracle Cloud Applications, offer a wide range of benefits.
Cloud Benefits |
Legacy way of working |
Why this matters |
|---|---|---|
| Continuous innovation Periodic updates keep apps up-to-date with the latest new and technology. |
Few disruptive upgrades The software is almost continuously outdated. |
Continuous innovation through periodic updates, both in applications as well as platform. Ability to opt-in to new features. Upgrades of legacy applications are so disruptive and costly, that most companies postpone them (sometimes indefinitely). |
Every module can be implemented separately. |
ERP-centric ERP must be implemented first. |
ERP is typically optimized for Finance and typically doesn’t cater for sales, marketing, service, production, logistics etc. With an ERP-centric environment, customizations become a necessity to support the needs of sales, marketing, service, production, logistics (or alternatively: multiple instances of the same software). Customizations are costly and hinder upgrades. Companies use outdated software as a result, which increases security risks, and adds to the cost once upgrades become inevitable. |
| Structured and unstructured data Combined seamlessly inside applications. |
Requires separate applications for structured and unstructured data. |
Unstructured data (photos, videos, spreadsheets, PPTs, PDFs, etc.) form an integral part in modern business. Using separate applications for structured and unstructured data means that users cannot relate the two. It makes business processes and decision making suboptimal. |
| For all organization
sizes Supports large, medium and small organizations. |
For large organizations | With a legacy hosted application, when an organization outgrows it, it must consider implementing another solution. This is costly and disruptive. |
| Data-driven Data drives the process. continuous innovation. |
Transaction-driven The process drives the data. |
The business process rules are determined during the implementation, and process optimization is neglected. In a data-driven process, AI will detect anomalies in the data. Highly data-driven organizations are three times more likely to report significant improvements in decision-making. |
| One data model Data dictionary is designed around modern business processes. |
Many data models Data dictionaries are designed around 1990s business. |
Conflicting or wrong data as a result of inconsistencies in reporting and analysis with multiple data models leads to inferior and slower decision making. |
Supporting today’s new normal
What has changed in business that should make you reconsider your enterprise applications? In a post-pandemic business environment, companies will be managing the following:
- A remote workforce
- Employee health, safety, and training
- Digital customer experience
- A dynamic supply and demand
- Strategic scenario planning and modeling
In a survey by MIT Technology Review Insights, 80% of executives said their organizations are planning big moves—such as acquiring or divesting a business, launching a new business model, or implementing automation for core business processes—within the next 18 post-pandemic months. In this new environment, Oracle Cloud Applications offer the flexibility, scalability, and always-on, real-time capabilities to help you confidently manage new business challenges.
Oracle Fusion Cloud Applications and emerging technologies
Oracle Fusion Cloud Applications are supported by the most complete cloud platform for integration, process automation, visual application builder, business accelerators, and emerging technologies, such as digital assistant, blockchain, Internet of Things (IoT), and augmented reality.
Oracle Integration Cloud also comes prepackaged with the SAP Adapter to connect to SAP’s integration protocols, such as BAPI, RFC, and iDocs. So you don’t need to do one massive migration from SAP to Oracle, or migrate to the HANA database. Go at your own pace by migrating module by module. Build connected, seamless processes with Oracle’s complete suite of SaaS applications across the entire landscape, including the combined SAP and Oracle Cloud Applications.
Our partners
As trusted advisors, the members of Oracle PartnerNetwork accelerate our customers’ transition to the cloud and drive superior outcomes. For example, Evosys is a trusted Oracle Partner with more than 2,000 experienced consultants and 1,200 Oracle Cloud customers. The company’s Evosys Glide methodology has helped many companies with older SAP solutions migrate to Oracle Cloud Applications. Its value-based delivery framework helps companies with their digital transformation journeys to bring in more innovation with new technologies, such as chatbots, AI, and robotic process automation.
Old SAP to new Oracle Cloud
Typical scenarios where companies on old SAP releases choose to migrate to Oracle Cloud Applications include:
- Replacements: Replace Old SAP solutions with modern Oracle Cloud solutions.
- Surrounds: Keep the existing SAP ERP environment, but add Oracle Cloud solutions, such as Oracle Fusion Cloud Enterprise Performance Management (EPM) to introduce advanced planning, close and reporting capabilities on top of existing SAP solutions, or Oracle Transportation Management to bring in logistics optimization and transparency.
- Acquisitions and divestitures. Replace SAP systems that don’t support expansion. Watch this case study of Vodafone’s divestiture (3:01).
Customer success partnerships
Batelco
Batelco is the leading integrated communications provider in Bahrain that is well known in the industry for its innovation and customer experience. Evosys helped migrate Batelco from SAP to Oracle Cloud Applications with the help of Evosys Glide methodology.
View the Evosys and Batelco story
Clayco
Based in Chicago, Clayco provides full-service, design-build construction solutions to clients across North America. Clayco was running on its HR on SAP SuccessFactors. With the help of Evosys, Clayco now has faster, more simplified processes, including Oracle background check integration, Outlook integration with talent acquisition, and goals and performance processes.
View the Clayco and Evosys story
Lovisa
Lovisa is a global, fashion-forward jewelry brand that delivers 150 new styles to stores around the globe every week. Lovisa acquired 84 Beeline jewelry stores in Europe, running on SAP S/4HANA. Lovisa decided to migrate Beeline to Oracle Cloud with the help of Evosys.
Other companies that migrated from SAP to Oracle include
Need unified HR and back-office applications?
Learn why more companies are choosing Oracle over SAP
1 Q4 FY21 earnings call: https://investor.oracle.com/home/default.aspx
2
https://diginomica.com/how-oracles-latest-announcements-change-multi-tenant-vs-premises-decisions