Project Intermediate Submission

SAP’s ERP Solution

Submitted By:
Group 2

Amrit Priyadarshan PGP/21/009

Abhigyanjit Bora PGP/21/065
Kuldeep Bukarwal PGP/21/150
Sonali Bhattacharjee PGP/21/198
Introduction: SAP & ERP
The SAP value proposition offers tangible benefits and enables growth:

 It helps in reducing the total cost of ownership

 It helps in improving productivity and insights by giving employees access to enterprise
information faster and in an organized way
 Improve financial management and corporate governance
 Helps in retaining top performers
 Optimize IT spending
 Reduce costs through flexibility in operations
SAP is the world's largest business management software company and the third-largest
independent software provider in terms of revenues. Even though the competition is quite fierce
with a lot of new entrants in the marketplace from large and small vendors, SAP is still a leader
in the enterprise software space. Some of the competitors being Microsoft Dynamics AX,
Microsoft Dynamics GP, Sage 100 etc.
SAP ERP system is scalable, customizable and adaptable, simplifying integration with other
third-party applications. It fits in with the evolving business requirements of enterprises and is
highly scalable. This gives the enterprise a competitive edge in the market. SAP assures
affordability and ensures business to utilize the most of their IT budget. It helps align the
strategies with the operations while offering trade-specific solutions. The architecture of the
SAP ERP system is robust. It is process-centric and has a flexible foundation that operates with
the enterprise-wide business process on the basis of real-time communication. SAP has a vast
array of strongly integrated modules, and it interacts better with third-party tools compared to
other ERP products.
SAP implementations runs for months and are highly expensive. So a mid-size industry who is
only into financial services may not go for SAP but rather choose other product which has
better name in providing financial tools and services.

SAP’s ERP vs. Competitors

Microsoft
Vendor SAP Oracle Dynamics Infor
Market share 19% 13% 16% 13%
Short list rate 38% 18% 31% 13%
Selection rate after shortlisting 38% 22% 22% 19%
Implementation duration (months) 23.1 24.5 23.6 15.3
Total cost of ownership ( in millions ) $ 2.09 $ 2.38 $ 2.06 $ 1.51
Payback Period (months) 30 29 12 8.5
Realised 50 % benefits 34% 21% 26% 10%
Achieved more than 50 % functionality 44% 86% 80% 75%
Disruption at Go - live 44% 42% 41% 42%
Implemented in the cloud 30% 47% 60% 22%
Achieved more than 40 % cost saving with
the cloud 50% 14% 0% 33%
  SAP holds the highest market share of 19% among its competitors.
 Both the short listing and selection rates are highest for SAP which represents a strong
trend in its Sales cycle with respect to the other vendors.
 Highest payback period in SAP means that it takes time for people to learn a new
system and use all of its functionality, hence increased focus can be put into making the
software more user friendly.
 There is a decreasing trend in the delta of planned and actual cost of implementation
which shows better planning potential.
 SAP shows the highest realised benefits of 34% among the customers which shows
increasing positive sentiment about the company.
 Full functionality of software usage is least for SAP which further emphasises on the
need for improving the user knowledge of its functionality.
 SAP is the only organization which implements in a hybrid approach which makes
it’s the most versatile of software and increased risk mitigation in case of operational
failure at early stage of the project.
 Least customization in SAP indicates that organisations are performing due diligence
when evaluating system against their business requirement which combined with high
selection rate indicates that SAP is targeting the right customers which understands its
usability for their business.
 Cloud usage is becoming increasingly popular in enterprise software market. SAP
holds the highest competitive advantage in cloud usage as it provides easier
implementation , lower upfront costs and lower total cost of ownership, thus increasing
its total cost savings by 50% which is the highest among all its major competitors.

Value Placeholders
Value Value Element SAP’s ERP Microsoft Dynamics
Dimension
Economic Benefits
Payback Period SAP has the highest Microsoft’s payback
payback period in the period is only 12 months
industry (30 Months)
Cloud Cost Savings SAP is one of the very For Microsoft, the
few companies offering saving is below 40%
a cloud cost saving of
more than 50%
Technological Benefits
Benefits Realisation 34% of SAP’s projects Only 26% of Microsoft’s
realised benefits of projects realised benefits
more than 50% of more than 50%
Service Benefits
Hybrid SAP is the highest user Microsoft does not use
Implementation of Hybrid Hybrid Implementation
Approach Implementation approach
Approach (A mix of
Big-Bang and Phased
implementation)