Enterprise Resource Planning (ERP) has come a long way from what it used to be.
It began with Ford Whitman Harris’ 1913 paper-based production scheduling system called the economic order quantity (EOQ) model, then evolved into Black and Decker’s computer-powered material requirements planning (MRP) product.
Manufacturing resource planning (MRP II) followed an upgrade on MRP. This later morphed into the comprehensive suite of tools for core business processes integrated into one system we know today as ERP.
While the integrated system for business management may have evolved over the last century, one issue still lingers: choosing a suitable option. Unfortunately, there’s no hack for that. Plus, choosing is even more tedious nowadays due to the dozens of options on the market.
Like us, you know you have to do your due diligence. And this quest has led you to compare NetSuite and SAP, two of the most famous names in the ERP game.
Widely regarded as the number one ERP software on the market, NetSuite includes modules for efficiently managing your most critical business operations and accessing their data for performance review and decision making. NetSuite helps you take charge of everything from accounting to manufacturing from one cloud-based system.
SAP also sets you up nicely with its cloud-hosted ERP applications spanning every critical department that keeps the lights on in your business, including accounting, sourcing and procurement, supply chain management, etc.
If both options seem the same, not to worry, we’ve done some of the heavy lifting for you by digging into the fine details that distinguish them so that you can make an informed choice. So if a detailed comparison is what you’re after, keep reading.
NetSuite vs. SAP: Quick Summary
Let’s go through a crash course on the scope of each platform,
NetSuite
NetSuite ERP is a collection of cloud business management applications that helps organizations oversee their core business processes and get real-time, easily accessible data across the board, all in one place. It’s like Big Brother, but for your business.
From helping you automate your financial processes to ensuring you have an up-to-date inventory record. While giving you tighter control over order management and at the same time helping you optimize your supply chain, NetSuite’s scope is extensive and detailed. Here are some of the applications this powerhouse packs:
- Accounting Software
- Financial Management
- Warehouse Management
- Supply Chain Management
- Order Management
- Inventory Management
- Global Business Management
- Human Resource Management
- Analytics and Reporting
On top of its extensive feature list, NetSuite caters to businesses of all sizes operating in various industries, including digital marketing and advertising, consulting, energy, financial services, food, manufacturing (no brainer), software, and technology, transportation and logistics, and more.
SAP ERP
SAP applies cloud-based and on-premise deployment options, depending on your preferred option, to deliver an intelligent and integrated suite of management tools for core business processes across different departments. The platform focuses on offering flexible and scalable management tools to help businesses cut costs, become more efficient, and safely leverage innovative technologies.
With its range of solutions tailored to small, medium-sized, and large enterprises, SAP has a suitable ERP system for every need.
There’s the cloud or on-premise-supporting SAP Business One for small businesses and the SAP ByDesign designed for midsize, large, and global enterprises. Finally, you have the S/4HANA Cloud ERP, the latest cloud-only platform that harnesses machine learning and AI to automate all business operations.
For this article, the focus will be on SAP Business One, which is the first SAP ERP software, the one with the most extensive features and the most amount of global deployment. Although SAP indicates that Business One is for small businesses, records show that it’s the most popular SAP ERP software among even midsize to large companies clocking up to $500 million in revenue.
Here are some of its capabilities:
- Financial Management
- Supply Chain Management
- Customer Relationship Management
- Procurement
- Project Management
- Human Resources
- Analytics
- Industry-Specific Capabilities
Like NetSuite, SAP also supports diverse industries, including financial services, mining, media, transportation and logistics, retail, wholesale distribution, government institutions, and more.
NetSuite vs. SAP Business One: A Side-By-Side Comparison
Pricing
We’ll take a quick look at NetSuite’s pricing first. One of the few definite details on pricing on NetSuite’s website is that interested prospects have to request a quote based on their needs. Apart from that, details on pricing directly from NetSuite are few and far between.
That said, third-party websites and other users have shared insights on NetSuite’s pricing model. For one, customers have to subscribe annually to use the software. And the price for each business is determined based on four factors: the flat fee for the core NetSuite platform, the selected modules, the number of users, and the implementation cost.
Reports suggest that the flat fee is around $999, additional modules can cost between $149 to $499, and each other user costs $99 per month, but we couldn’t get details on the setup fee. Although, we did find out that NetSuite users aren’t charged for maintenance and updates.
With SAP, you’d also have to contact the sales team for a quote based on your preferred hosting option (cloud, on-premise, co-located), database type, customization, implementation, and add-ons. But reports on its basic pricing structure per several of SAP’s partners say that the company licenses the software to businesses through various licensing options:
- Professional licenses offer complete access to all the SAP models. And you can acquire one via a one-time payment or monthly subscription. The one-time fee stands at $3,213 per user minus a yearly maintenance fee, while the monthly subscription pricing comes in at $108 per user with no extra annual maintenance charge.
- Limited Licenses come in three packages from which you can choose: CRM, Financials, and Logistics. And each gives you a mix of full, partial, or no access to some functionalities under each package. For example, the Limited CRM license gives you full access to the CRM module, partial access to the business management module, and no access to the project management functionality.
You can obtain limited licenses for a one-time fee of $1,666 per user plus an extra yearly maintenance fee or a monthly subscription fee of $56 per user with no annual maintenance charge.
Verdict: If we applied only the basic pricing information for both ERPs in a hypothetical situation of six users, you’d pay $6,939 per year for a NetSuite subscription (minus maintenance fee and additional modules), while SAP’s monthly professional license fee for six users for a year will set you back $7,777. But chances are including NetSuite’s maintenance fee will take its price very close to SAP’s cost.
On another level, opting for a one-time payment of $3,213 per user for SAP’s professional license for six users will cost $19,278 (without the yearly maintenance fee), which you will incur in about 2.7 years of purchasing NetSuite for the same number of users.
We’d call it a tie between NetSuite and SAP, as both options have very flexible pricing structures. And while NetSuite could be more expensive in the long run, you may not have the lump sum required to purchase SAP’s cheaper one-time professional license at the time of need. So ultimately, the option you’ll consider affordable will be down to your immediate business needs and budget.
Features
Concerning features, NetSuite and SAP offer similar functionalities. But there are fine margins here and there that give each an advantage over the other in some cases.
Financial Management
NetSuite is a powerhouse in the financial management scene. Its comprehensive solutions integrate with other business applications and present consolidated financial reports and granular details about individual transactions. For example, under NetSuite’s financial management module, you’ll find:
- Accounting functions cover tax management, accounts receivable, accounts payable, a general ledger, fixed asset management, and cash and payment management.
- A robust billing feature allows end-to-end management of billing operations such as recurring subscriptions, invoicing, and multiple pricing models.
- A planning and budgeting feature that automates both processes facilitates revenue planning, accurate scenario modeling, and other operations.
- An excellent financial reporting feature that provides real-time insights, customizable report formats
SAP’s financial management module is similar to NetSuite’s in that you can automate critical accounting processes such as accounts receivable, accounts payable, and journal entries. You also get to manage fixed assets with a function that removes the tediousness of the job.
SAP also allows you to handle reconciliations and process bank statements and payments easily. And like with NetSuite, standard and configurable reports based on real-time insights are available on SAP.
Verdict: NetSuite wins this round by a mile. While SAP’s financial management features lean more towards basic accounting operations, NetSuite’s features have more length and depth. An example of the former is NetSuite’s subscription billing absent in SAP. And as regards depth of functionality, while SAP enables revenue recognition, its functions are limited compared to its NetSuite counterpart.
Sales and Customer Management
As with its other features, NetSuite’s Customer Relationship Management module is also expansive. It includes functionalities that help with the end-to-end management of leads, from spotting a sales opportunity to offering support and everything that makes up the customer lifecycle, including customer order, fulfillment, renewal, upsells, cross-sell, etc.
NetSuite CRM’s key features include:
- Its sales force automation allows teams to manage the sales process from one platform
- The marketing automation function powers targeted campaigns and measurements to deliver insights into customer readiness based on predefined criteria.
- A partner relationship management feature coordinates the sales process with partners and affiliates and manages moving parts like joint marketing campaigns and partner commissions.
- Mobile and tablet access for specific tasks
- Customer Service Management feature for creating and automating case management processes, amongst other things.
SAP’s sales and customer management module deliver similar value to NetSuite CRM.
- It tracks customer and lead activity all through the sales cycle
- Manages and analyzes marketing campaigns
- Stores customer data in one place, including synchronizing Microsoft Outlook contacts
- Facilitates effective service management through easy documentation and service call response
- Delivers detailed reports on the sales process
- Enables sales process and customer information management on the go via mobile.
Verdict: We’ll put this down as a tie, although for you, having to purchase NetSuite CRM separately might tilt the scale in SAP’s favor. And for others, the extra expense may not matter if, for instance, there’s a genuine need for NetSuite’s partner relationship management feature, which is absent in SAP.
Purchase and Inventory Management
NetSuite’s inventory management module is a one-stop shop for real-time insights on company-wide inventory. It aggregates stock across all channels and locations to ensure you get an accurate bird’s-eye-view of what’s available and can make informed decisions.
The sophisticated software also supports intelligent stock replenishment using historical sales data and other factors to determine when to automatically notify the purchase manager to reorder an item and what stock levels are appropriate for that item. Other functionalities include scheduling periodic counts and assigning them to warehouse staff, facilitating cycle counting, and enabling stock traceability using serial or lot numbers.
With SAP Business One, you also get real-time records of warehouse inventory across different warehouses and locations. Using serial and batch numbers, following the trail of goods through your inventory cycle also becomes easy. There’s also a handy feature that synchronizes inventory level with accounting operations to enable seamless purchase planning and auto-generated accounts payable invoices for purchases or orders.
And if you’re also handling production, the materials requirements planning feature allows you to predict material requirements, create bills of materials, and issue production orders.
Verdict: For businesses just starting, SAP Business One could match NetSuite in terms of the value delivered in inventory management. But NetSuite is better positioned to remain relevant to the inventory control needs of the business as it grows.
Customization
Customization can be critical, especially when adjusting certain ERP features to suit emerging business needs. With NetSuite, shaping your ERP interface is straightforward as the platform employs a point-and-click feature that enables you to customize dashboards, menu bars, and forms. This means you don’t have to interact with code to make slight changes.
NetSuite also includes permission and access controls that allow you to determine who within the organization has access to what data.
SAP also offers customization to a reasonable length; however, navigating the process could prove tricky for non-technical users because it requires you to do some coding. You’d also need MS Visual Studio, a separate customization tool.
Verdict: NetSuite simplifies customization for users and, as such, edges SAP in this category.
Reporting and Analytics
NetSuite and SAP Business One offer detailed business analytics using interactive dashboards and key performance indicators.
However, NetSuite’s Suite Analytics, its analytics module, is arguably more accessible and user-friendly than SAP’s data reporting tool. It also delivers insights into every area of your business using functionalities that are either absent or limited in SAP’s analytics tool, such as continuous revenue recognition tracking.
Some of SAP’s advanced analytics features also require separate licenses, which can significantly raise the cost of the software.
Verdict: NetSuite also takes this round.
User Experience
NetSuite’s user experience is decent, although there are claims that beginners may find navigating the platform a little taxing. It also doesn’t help that NetSuite’s search functionality sometimes fails to deliver, complicating information retrieval.
On the other hand, SAP is more intuitive, simple, and to the point. For example, users can easily access their most critical business data using SAP’s search feature. SAP’s short implementation time also gives it an edge over NetSuite as users can quickly get down to managing their business with SAP soon after purchase.
Verdict: SAP clinches the top spot in this category due to its more straightforward user interface, responsive search function, and shorter setup time.
Reviews
A quick trip online will show you varying user opinions about NetSuite and SAP. We scoured some software rating and user feedback aggregating sites to discover what experts and the market are saying about both ERPS.
- SAP: SmartScore – 8.7, User Satisfaction rating – 98%
- Netsuite: SmartScore 9.6, User Satisfaction rating – 99%
- NetSuite – 3.9/5 stars from 1,833 reviews
- SAP – 4.4/5 stars from 469 reviews
- NetSuite – an overall rating of 4.1/5 stars from 809 reviews. Ease of use: 3.8 stars, Customer Service: 3.6 stars, Features: 4.1 stars, Value for Money: 3.7 stars.
- SAP – an overall rating of 4.2/5 stars from 185 reviews. Ease of use: 3.8 stars, Customer Service: 4.0 stars, Features: 4.3 stars, Value for Money: 4.0 stars.
Word on the street is that NetSuite is a robust ERP option that’s super flexible and excellent at integrating with third-party apps. But it can also prove overwhelming due to its comprehensive features.
For SAP, the consensus is that it’s a cost-effective, easy-to-use ERP well suited to the budgets of small and medium businesses yet delivers excellent value. However, some of its features, such as its accounting functionality, lack critical capabilities that may be dealbreakers.
Integration
Seamless integration is NetSuite’s forte. It comes with NetSuite SuiteCloud Platform Integration, the bridge that connects NetSuite to almost any third-party application or external system for data exchange. NetSuite SuiteCloud is so versatile that it supports standard industry integration technologies such as CSV file import, ODBC/JDBC, REST, SOAP WEB services, and custom REST endpoints.
NetSuite also integrates with popular third-party applications such as Shopify, Salesforce, HubSpot, etc.
Although SAP displays impressive integration capabilities, they aren’t as robust as NetSuite’s offerings. It delivers APIs for SQL-based integrations and add-ons like SAP Business One Integration Hub with pre-configured integration templates for applications like Shopify, Magento, Salesforce, Mailchimp, WooCommerce, DHL, FedEx, and others.
Verdict: NetSuite comes out tops because it supports a broader range of integrations that may become critical as the business evolves.
Customer Support
Both ERPs are big on customer support. With NetSuite, essential support is accessible to every customer, but there is an opening for premium and advanced customer support available on a subscription basis. These options provide support through various methods, including online case submission and treatment and 24/7 phone support. NetSuite also has a ton of free valuable guides and resources such as blog posts.
SAP also has a maintenance contract-based support structure on standby 24/7 to attend to critical issues and can also be reached through LaunchPad, a support platform for SAP Business One users. In addition, a wealth of handy support resources are also floating around SAP’s website.
Verdict: This battle ends in a stalemate owing to both ERPs’ extensive support capabilities.
SAP Business One or NetSuite – Who Gets The Crown?
Now that’s not a question with an answer that’s true for everyone at all times. NetSuite and SAP Business One have individual peculiarities that appeal to different businesses based on their context. For instance, while NetSuite is strictly a cloud-based ERP, SAP offers cloud or on-premise deployment. In addition, SAP’s pricing model allows a one-time purchase; NetSuite’s doesn’t.
The list of differences goes on and on, but ultimately, you want value for your money, and it’s left to you to determine if value means NetSuite or SAP. Notwithstanding, it wouldn’t hurt to bear in mind that, on the whole, NetSuite offers a more extensive ERP feature list than SAP Business One and might be the best bet for a fast-growing business or one looking to expand its operations soon.