In any software selection process, considering all options is critical to ensuring the best system is selected.
It's even true for top-tier products like S/4HANA, SAP's newest ERP platform. For larger, more complex global organizations, an enterprise-class option from SAP may seem like the best choice to handle the most demanding business requirements. In fact, there are several alternatives to SAP S/4HANA that are worth considering.
Let's dive into four of the most capable S/4HANA competitors and consider a few other options that might suit more specialized needs.
Oracle Fusion Cloud Applications
One of the most common systems that organizations evaluate side by side with SAP S/4HANA is Oracle Fusion Cloud Applications, the broad brand name for a suite of products that includes Oracle Fusion Cloud ERP and Human Capital Management, among others. This offering is a scalable, diverse suite that is also complex because it can manage a large menu of business functions.
It can be challenging to spot the differences between Oracle Fusion Cloud Applications and SAP S/4HANA, but the following are two important ones:
- Flexibility. 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.
- Enterprise performance management and business analytics. Oracle Fusion Cloud Applications have more robust reporting and business intelligence capabilities. Oracle has strategically acquired the gold standard in reporting products, particularly Oracle Hyperion, which is now part of the Oracle Enterprise Performance Management suite.
If an organization requires strong quantitative capabilities, Oracle is a better fit than SAP.
As for other important considerations, such as overall functionality, ecosystem, quality of system integrators and resources to compete in the market, these products are on an even playing field.
Overall, Oracle Fusion Cloud Applications are a viable alternative to SAP S/4HANA.
Microsoft Dynamics 365
Another flexible but just as scalable S/4HANA alternative is Microsoft Dynamics 365.
It consists of two sub-products: Business Central, and Finance and Operations. Business Central is meant to be a SaaS competitor to NetSuite in the SMB market. Most organizations considering S/4HANA will instead be looking at the Finance and Operations (D365 F&O) component.
D365 is an effective option for SAP S/4HANA prospects because it has a variety of capabilities you would expect from a tier 1 vendor like Microsoft. Among the key differentiators: Like Oracle Fusion Cloud Applications, it is a more flexible ERP system than S/4HANA.
D365 is also built on an open architecture, which means software developers and products that can integrate with the system are plentiful. In stark contrast, S/4HANA requires a specialized skill set that can be harder to find and is often more expensive.
Finally, D365 can be easier to implement. The implementation costs are lower than S/4HANA's because it is a more flexible product. Overall, the functionality, open architecture and ability to integrate are stronger with Microsoft D365 than with S/4HANA.
However, if an organization is working to standardize operations, scale production or create consistency across the business, D365 will not provide the level of rigidity or standardization of S/4HANA.
Microsoft Dynamics 365 can be a very effective alternative to SAP S/4HANA, especially for a midsize organization.
QAD Adaptive ERP
For companies in the industrial sector and subsectors such as manufacturing distribution, there is a product called QAD Adaptive ERP that competes directly with SAP S/4HANA. It doesn't carry a lot of brand recognition but has an impressive tenure and is an excellent alternative to S/4HANA. QAD's capabilities are extensive in general, but they're truly unmatched in the manufacturing industry.
QAD is a scalable product, which means it can accommodate growth, and it has a very large, established vendor network. In contrast, S/4HANA is still developing those capabilities.
QAD has been developing products in the cloud longer than SAP, which is another advantage. QAD has had more time to build key functionality while investing R&D in its ERP. SAP is still catching up.
The final benefit worth consideration is flexibility, but in a different sense than in D365 and Oracle. QAD employs low-code development, which means there is no need to change the ERP's program code when making minor updates.
The low-code approach can be beneficial, especially to organizations that are looking for maximum flexibility.
To sum it up, QAD Adaptive ERP has strong proficiencies in manufacturing and the repeatable standardization of business processes that SaaS enables.
The other Oracle product worth contemplating as an S/4HANA alternative is Oracle NetSuite. Small to midsize organizations often gravitate to S/4HANA because of SAP's brand reputation and because they aspire to become large companies. This illusion of untethered potential is S/4HANA's strength.
However, there is a significant gap between an SMB's current state and adopting a complex system like S/4HANA. This is where NetSuite can be a suitable alternative. Like S/4HANA, NetSuite is known for its relative standardization of business processes and workflows. Along with that comes a certain lack of flexibility, but that can be a positive when an organization is trying to grow by standardizing operations.
Industry-specific and niche ERP alternatives to S/4HANA
Potential S/4HANA customers might also want to consider industry-specific offerings. These niche players provide scalable, competitive ERP that can compete with S/4HANA or provide similar capabilities.
Among these specialized vendors are Epicor, which specializes in manufacturing; Acumatica, offering cloud-based ERP for SMBs; and Deacom, which targets process manufacturing specifically. Companies in the construction industry or that require field-service capabilities and mobile workforce management might consider an ERP system from IFS.
For a company that is narrowly focused and lacks diversified or complex needs, it might be worth evaluating second- and third-tier ERP vendors and their products.
The industry offerings mentioned above are complete ERP systems that are focused on one trade. In contrast, "best of breed" products mostly concentrate on one major business function. For example, Workday is best known for its human capital management features, though it does handle some other typical ERP functions such as finance. Salesforce is the market-leading customer relationship management software.
If an organization's objectives are hyper-focused on one area of the enterprise, a best-of-breed product could compete in functionality, cost and business value against S/4HANA.
When evaluating a large, complex system like SAP S/4HANA, the most important advice for considering alternatives is to have a business strategy that aligns with the software and clear requirements for what a new system must do for the organization.