SAP vs. Microsoft: ERP software

William Elcock

Updated · Mar 12, 2021

In the enterprise resource planning (ERP) software market, SAP and Microsoft are two of the biggest names. 

ERP software

ERP platforms are designed to help enterprises organize their business-related information and manage their business-related processes. With ERP software, business-related information is stored and managed from a central database, allowing all relevant employees to have access to key data, such as financial information. In addition, the software can help manage routine activities, such as accounting, procurement, risk management, and supply chain operations. 

We have singled out the SAP and Microsoft Dynamics ERP platforms to compare the two solutions and give you some insight into which one might suit you better. 

Let’s see how they stack up against each other:

SAP vs. Microsoft Dynamics: Key features

SAP ERP software

SAP offers more than one ERP solution, but SAP 4/HANA is its most feature-rich offering. SAP offers machine learning that facilitates real-time insights and gathers patterns to automate business processes. SAP 4/HANA is suitable for several industries, but it is often used in the manufacturing and distribution industries. It can be run in the cloud or on-premises.  

  • Also suitable for medium-sized businesses

  • Financial planning and analysis

  • Streamline and automate finances

  • Integrate risk and compliance management

Microsoft Dynamics ERP software

Microsoft Dynamics 365 combines several apps that seamlessly work together to form a cohesive ERP solution. With apps such as Dynamics 365 Supply Chain Management, Dynamics 365 Finance and Dynamics 365 Human Resources, businesses can work in sync through a centralized database that streamlines these various business activities enterprise-wide. Microsoft Dynamics 365 integrates with other Microsoft products, such as Outlook, Skype for Business and OneNote. Microsoft Dynamics 365 is commonly used in the distribution and real estate industries. It can be deployed on-premises or in the cloud.

  • Modular design allows apps to be deployed independently

  • Mobile apps

  • Ability to personalize customer experiences (CX) with AI

  • Customer insights readily available

SAP vs. Microsoft Dynamics: App functionality

Microsoft takes full advantage of the fact most users are familiar with its Microsoft Office products. The Microsoft Dynamics ERP apps have a look and feel that resemble Microsoft Office products, giving users an intuitive interface. Since these ERP apps are easy to integrate with Microsoft Office, users can carry out related activities, such as creating Word documents or emails in Outlook. Microsoft allows users to build custom workflows with Microsoft Flow. This helps to streamline processes, such as collecting data to improve marketing. In general, Microsoft Dynamics is quite flexible. However, this flexibility needs to be kept in checkso functions such as custom workflows don’t get overly complicated, according to Eric Kimberling of Third Stage Consulting. 

SAP, on the other hand, is more complicated to use. The platform’s interface isn’t as attractive either. Overall, it takes longer for users to master the interface. However, it’s a feature-filled platform. The dashboards are quite intuitive, and data storage and report writing are easily facilitated. SAP supports the creation of customized workflows, but the process is more complicated and requires a specialized developer. This increases the cost of this type of customization. In general, SAP offers a more standardized approachKimberling says. 

SAP vs. Microsoft Dynamics: Organization size

Due to its modular nature, Microsoft makes it easier to pick the apps you need for your business. For this reason, both medium-sized businesses and enterprises can take advantage of only the features they really need.

SAP is more rigid. It takes longer to deploy, and this increases costs. This could be prohibitive for medium-sized businesses and a hindrance for enterprises. SAP offers many of the standardized processes that an enterprise needs and is used heavily by this group of users.

SAP vs. Microsoft Dynamics: Industry suitability

Microsoft Dynamics is suitable for several industries, but it is commonly used in construction, distribution, insurance, manufacturing, and real estate. 

SAP is also commonly used in manufacturing and distribution as well as in information technology (IT), information services (IS), financial services, real estate, and health care. Kimberling touts SAP for its suitability when it comes to complex manufacturing processes.

SAP vs. Microsoft Dynamics implementation costs

In terms of the initial configuration, the cost of SAP’s ERP solution is generally high and can be anywhere from $500,000 and up. Because of Microsoft’s modular setup, it can be more cost-effective for medium-sized businesses and smaller enterprises. This is because users can choose the modules they want. Microsoft offers payment plans that start at $8 per month for the simplest plan and up to $185 per user per month for enterprises. While SAP seems expensive at first glance, the annual cost of Microsoft’s enterprise plan can skyrocket depending on the number of users. 

Final thoughts

In general, SAP’s ERP software is designed for enterprises that want or require a standardized feature set. Customizations are possible, but they can be difficult and require advanced programming. 

Microsoft Dynamics’ modular nature makes it an attractive option for medium-sized businesses in particular. The platform’s customization and integration with Microsoft products make it more flexible.

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