Implementing an efficient and robust ERP (enterprise resource planning) solution is essential for enterprises of all sizes in today’s quickly shifting business world. SAP, the ERP software market leader, delivers two popular options: SAP Business One and SAP S/4HANA. Because both solutions are designed to improve business operations and drive growth, it is critical to understand the distinctions between the two to choose the best one for your organization’s specific needs and goals.
The Wise and the New Generation
SAP S/4HANA (the wise one) is the latest version of the world’s most preferred ERP software. It has been on the market for more than 50 years. It has been used by more than 425,000 companies worldwide.
One of SAP S/4HANA ‘s strongest points is its best-practice approach, which shapes world-class ways of doing business with solutions it has developed in a variety of industries over the years.
SAP BusinessOne (new generation) on the other hand, was initially launched in 1996, and SAP acquired the software in 2002. So contrary to S/4HANA , BusinessOne has a shorter history, and at the beginning it was not an SAP product, but for the last 20 years it has been managing by SAP. The interesting point is that in 2023, new BusinessOne deals are more than10x greater than SAP S/4HANA new contracts.
So why SAP need to acquire a new ERP solution while it has the best one? Let’s look at the SAP positioning for the products
SAP ERP Positioning Strategy
Decades ago, ERP was used only by large companies. At that time, SAP investments were not very noticeable and paid off in a short time. However, with the growing popularity of ERP, mid-sized and even smaller companies have become interested in using ERP systems to manage their operations and remain competitive in the market. At this point, SAP’s requirements for the ERP system began to be discussed.
When we talk about requirements, it is not just about money but also time, skilled resources, and cultural requirements.
Therefore, SAP made a strategic move. The company developed a more comprehensive approach to the needs of companies of different sizes. As a result, they made acquisitions and revealed their strategy by publishing the pyramid below.
This pyramid categorizes companies into three tiers based on their size and complexity: small businesses, mid-sized enterprises, and large corporations. Each tier has its own set of requirements and solutions offered by SAP. By offering tailored solutions, SAP aims to cater to the specific needs and budgets of companies in each tier, making ERP systems more accessible and adaptable for businesses of all sizes. This strategic move by SAP has further solidified its position as a leading provider of ERP solutions in the market.
According to the SAP strategy, both software have the following points in common:
- They are owned and developed by SAP.
- They are using some common technologies (like HANA db)
- They can easily integrate with each other and other SAP technologies.
- They are implemented in a variety of countries, with solution partners authorized and audited by SAP.
They also offer robust security features to protect sensitive data.
Both solutions receive regular updates and support from SAP to ensure optimal performance and customer satisfaction.
Of course there are some differences according to this strategy which can give an intuition to the companies to select the best-fit
For small and midsize businesses, SAP Business One is the suggested SAP solution. It might be most appropriate for organizations with fewer than 500 employees, as an indication.
On the other hand, SAP S/4HANA was specifically designed to meet the requirements of larger businesses with 500 or more people.
Both systems have core modules and add-ons or additional products for specific industry needs. They also have country spesific solutions and language support for many countries.
Of course, S/4HANA has some deeper functionalities for complex operations compare to BusinessOne.
BusinessOne offers a slightly lower licensing budget than S/4HANA per user. Because implementation time is remarkably less than S/4HANA, there may be dramatic differences in implementation consulting budget. Although both systems can have some other budget items according to the project, the total project budget is lower for BusinessOne compared to S/4HANA in general.
The Real Picture
Though SAP initially positioned its ERP suite clearly, things have evolved over time.
Many companies were interested in BusinessOne; therefore, a remarkable solution partner ecosystem has been generated and evolved rapidly. These solution partners not only implemented the solution but also invested in the software and developed new functionalities and add-ons. SAP also improves and adapts BusinessOne to its new technological understanding by the time it becomes popular. So the companies that have been using BusinessOne did not change the software to S/4HANA in parallel with their growing strategy, as SAP thinks. Nowadays, the functional boundaries are not as clear as at the beginning between two ERP systems. BusinessOne has the potential to attract a larger portion of the market.
On the other hand, SAP S/4 HANA is still the main strategic software for SAP. Leading companies in almost each sector manage their operations with SAP S/4HANA or an older version of this software. SAP still invests in that product and has extensive integration with all other SAP products. The ecosystem is very mature, and there are many customer networks as well. S/4HANA is still the most powerful ERP and dominates the market in almost every country.
So, it is not easy to decide which ERP from SAP is best suited for you. It cannot be decided with some basic parameters, such as employee numbers, anymore. Expectations, budget, company culture, and many other parameters should be carefully taken into consideration.
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Starting a structured digital maturity assessment and having a consulting service from an expert perspective can be valuable for this process. ERP is a strategic tool, and the selection process can define many things for the future of the company.
Do you need support for your ERP selection process? Our team has experience on SAP S/4HANA as well as SAP BusinessOne. Let's talk about your company, your expectations and your digital transformation
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