QAD leads field of five on total cost of ERP measures, but there’s more to it

That is among headline findings of a total cost of ERP ownership study covering five of the biggest ERP providers, just published by analyst Aberdeen Group. The research compares SAP, Oracle (including JD Edwards and PeopleSoft), Lawson (including Intentia), Infor (including Geac, Mapics, SSA, Syteline and Lilly) and QAD. It draws its data from some 700 manufacturing users across most industries and company sizes, surveyed for earlier research aimed at benchmarking ERP in manufacturing. Other headlines include Lawson at number one for providing lowest total cost per percentage point of functionality actually used, as well as lowest cost per user, while Infor scores best for least total cost of software and services per user. SAP is number one for the most functionality used and SAP and Lawson tie for the top slot in highest number of modules used. Aberdeen is, however, at pains to point out that these figures are the averaged results across the entire sample. Total cost of ERP ownership, it insists, always depends upon function and fit of the vendor you select and the attention you pay to implementation and deployment long after contracts are signed. It also states that there is no clear correlation between money spent and benefits achieved. “Significant benefits can be achieved from all five of these vendors and also other ERP vendors,” says author Cindy Jutras, vice president and service director for manufacturing and ERP at Aberdeen. Other interesting statistics, however, include the fact that while the cost of software per user falls fairly consistently with the number of seats implemented, that’s not the case when services are added. Aberdeen’s study shows that manufacturers over the £$1billion mark pay an average 30% more per user than those in the $550 million to $1 billion range. Jutras puts that down to greater complexity in larger organisations and tighter purse strings in smaller ones. She also notes that while Infor’s cost per user is best in class at $3,922 against SAP’s high of $5,995, we need to look numbers of modules implemented, utilisation and hard data on ROI to get a more meaningful picture. She notes for example: “Aberdeen observed users of Lawson and SAP software implementing more modules while Infor and Oracle users were more likely to take fuller advantage of functionality in those modules deployed.” Which is the rationale for the cost per user per percentage point of functionality used figure – putting Lawson in the number one slot at $138 and SAP the most expensive at $202, but converting again to QAD the number one at $233 as the cost per percentage point of improvement against SAP, again the most expensive at $414. “Average improvements across all of these measures put QAD users squarely ahead of its competitors’ users both in terms of performance gains and cost per percentage point of improvement,” says Jutras. Although again, she notes the complexity issues of many of the SAP and Oracle implementations, making conclusions from the comparison less clear.