Cost Benifit Analysis Sap

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  • Topic: SAP AG, Oracle Corporation, SAP
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Cost Structure Benchmarking – Oracle vs. SAP Apps.

Cost Structure Benchmarking Oracle vs. SAP Applications

© RAAD Research GmbH 2009 - Status: 01/28/2009 - Slide: 1

Cost Structure Benchmarking – Oracle vs. SAP Apps.

Introduction Software Costs Implementation Costs Support, Maintenance, Operation IT Budgets Conclusion

© RAAD Research GmbH 2009 - Status: 01/28/2009 - Slide: 2

Cost Structure Benchmarking – Oracle vs. SAP Apps.

Introduction
The comparison of costs and benefits constitutes a deciding factor for companies looking for an appropriate ERP supplier. For Companies, the economic and flexible use of software is particularly important in order to free funds for additional investments, not least in further IT products. Providing for this is also the explicit goal of most ERP suppliers, like Oracle and SAP, for instance. Nevertheless, RAAD studies conducted in 2008 show that many SAP customers consider the costs for implementing, customising, and operating SAP software as very high. From this perspective, the objections against the planned increase of SAP’s maintenance fees is quite understandable. The general feeling that SAP products are too expensive to purchase and operate has also spread among the non-SAP customers of Germany’s small and medium-sized businesses. Here, the predominant opinion is, that SAP is too expensive and too complex. However, RAAD Studies show that SAP’s products and price models are largely unknown to the decision makers. These opinions are therefore based on preconceptions. To date, no comparable studies are available regarding Oracle customers in the German-speaking countries. But Oracle also had to suffer criticism concerning maintenance costs and customer support in the past. (http://www.computerwoche.de/heftarchiv/2006/47/1216914/) Despite the criticism directed at both software suppliers, a structured analysis comparing cost types and cost influencing factors of Oracle and SAP systems in respect to acquisition, implementation, and operation is still missing with regard to German-speaking countries. The study at hand is meant as a first step in this direction. It is the first of its kind that was supported by both software suppliers.

© RAAD Research GmbH 2009 - Status: 01/28/2009 - Slide: 3

Cost Structure Benchmarking – Oracle vs. SAP Apps.

Purpose of the Study
Comparing Oracle vs. SAP, but also Oracle vs. Oracle and SAP vs. SAP The primary purpose of the inquiry was to find out whether the expenses for Oracle and SAP systems differ significantly with regard to a number of easy to inquire cost types and cost influencing factors like licenses, maintenance fees, project duration, and employees required for operation and support. This study can also serve as a means for companies to compare their IT according to the results of aspects inquired among the same ERP user base. In case this deviates from the bulk of the answers, it can be useful for a company to analyse why and where it does not fare so well and where improvements can be realised. Benchmarking can only start with this study Benchmarking between companies – although successfully applied in practice – is still a hotly discussed issue in theory. It is not least the care exercised in selecting the appropriate companies that determines how good and convincing a benchmark really is. In order to derive recommendations for specific actions, a company should only compare itself with a small and narrowly defined subset of companies of similar size, industry, IT affinity, etc. However, as stated above, this is not the immediate objective of this study. Who is more expensive: Oracle or SAP? Neither? To benchmark the IT costs in total seems inadvisable, as no single definition employed by each and every company exists for “IT Cost Total”. Which factors are regarded as part of the IT costs can differ considerably between companies, depending on the structure of the IT. Due to this consideration, next to ‘global’...
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