This is a good time to remind everyone of the rules of SAP integration: 1) Your company processes MUST adapt to SAP processes. That's it. You can try customising SAP to fit your processes, but you will just waste time and hundreds of millions of money and then you will fail. Lidl spent almost a decade and 500M€ on its SAP project, but didn't follow rule #1: https://www.henricodolfing.com/2020/05/case-study-lidl-sap-d…
> You can try customising SAP to fit your processes So you are paying hundreds of millions to get a canned, pre-packaged, inflexible solution? Why is SAP still in business? Is it solely customer misinformation?
First you should know that the market for ERP systems is very wide. There are LOTS of various companies that offer their ERP systems. Also a lot of those "ERP" systems are "enterprise resource planning" in name only. The smaller ones often are focused on one thing only: bookkeeping, warehousing, invoicing, purchase management, salary calculation. Often they started as something that does one thing (usually: bookkeeping) and then more and more stuff was added on top -> as requested by customers. There was this old theory, that at some point each peace of popular software becomes so big that it can handle email. And guess what, SAP can send emails too. Tons of those other ERP systems can send email too. Different thing is if they really should.
The smaller ERP solutions often dont scale well (they cannot handle too many "things" e.g. millions of invoices, millions inventory SKUs, 20 different countries..) or are too simple / not flexible enough to actually customize. With those smaller systems, you can understand them (e.g. the whole system has few thousand tables), but this comes at the surprising cost of lower flexibility, because in order to handle the complicated business cases you have to recreate the complicated logic as well. SAP was used by so many big companies that a lot of the complicated logic is already there in its 'standard' (and as others pointed out: if you want your life easy, you should adjust your company to the standard, instead of trying to customize). Different thing is that you need a consultant to even know that those features exist. And as you can imagine SAP is so big that even the consultants can only focus on a certain part. [also I personally knew a situation where consultants wrote a custom extension for something that was available in standard -> they didn't know standard SAP standard well enough..]
I kind of disagree that a typical configuration of SAP has 20 000 tables. The ones I knew usually had 50 000+ and those were just few "modules". Using SAP terminology you have modules like FI (finance: bookkeeping), CO (controlling - financial reporting), FI-AA (asset accounting -> think list of assets the company owns), SD (sales & distribtion - e.g. issuing invoices). There are lots of those modules and usually the consultants know "their" module + the finance module. Because at the end the FI (finance) and CO (controlling) modules are always on the top -> you want to register the things that happen in financial ledgers and make some reports out of it.
For example: the consultant that sets up invoicing for you will know SD module (to set up the actual layout of invoices - how it looks like when you print it, the process flow etc) and FI (to help you configure that the invoices land on correct sales accounts). Someone else sets up the PM (plant management) module. Someone else handles access rights / authorization (small ERP systems often struggle at this part - and often "everyone can see everything" what is a big no-no in times of GDPR and just batshit insane when we think about corporate espionage).
A lot of complication with SAP comes from the fact that it can do things as per laws of different countries (please note: not necessarily out of the box, usually you need configurations and external add-ons). For example if you want the taxes calculated by the system for USA, Germany, Poland and Japan - then SAP can do it for you. The system (after painful configuration) will calculate the sales tax / VAT tax and also provide data to calculate CIT (I am not sure if any company calculates corporate income tax out of the box, I always saw an expert from SAP to some data/warehouse and a magic Excel file on top). Also laws change all the time, so system has to change all the time.
Even the basic stuff gets complicated once you need to handle it at scale + for many countries e.g. you want to issue the invoice, you need to use the correct tax type (e.g. VAT in Europe), the correct tax rate (e.g. like 50++ rates per each country), then you need to handle things like invoice corrections, exchange rates, handling exchange rate differences, withholding tax. And it is like this with >everythingOther thing is that there is a big moat. The process of setting up any ERP system takes at least months and generally years. The article explained it quite well. You need to migrate data to the system, check if it works, see if can handle your cases, train the users (the training part often is ignored, so lots of features are not used). Often the companies also dont have anyone to help with customization AFTER the migration, what is another big problem. It is public knowledge that more than 50% of ERP implementations fail.
There is also some degree of economy of scale. People who used SAP at one company have it easier to use at another. Although devil is in the configuration details. But at least they dont need to relearn the interface (that is awful in most ERP systems).
In a typical big company at some point you need to have your own in-house ERP administrators, who outsource parts of requirements to external sources and deal with the easier stuff on its own. The smaller systems are often inflexible for that - source code is not available. Different thing is if you want to handle the SAP source code with comments in German (yes, that's how it looks in some places; table and column names are German abbreviations too).
Speaking about incumbents: I read that there is some "magic" open ERP system (forgot its name - maybe it was OpenERP), that has just under 20 tables that supposedly can handle everything, but I never looked much into it. Perhaps 20 tables with 1000+ columns each (maybe still better than 50 000 tables with 10 columns each).
And to end it: ERP systems are like elephants. Once you set it up and it "kind of" works, then you dont want to touch it. You dont want another few years spent putting lots of effort on your tooling. You want to deal with actual core business part of the business. The article also pointed it out -> the quote that in some markets being able to implement the ERP better than the competition is the competitive edge is quite true. There are lots of companies with very very bad ERP, or multiple systems that dont talk with each other. What makes reporting hell. (not that reporting in SAP is easy) And without good reporting, the decisions are taken too late, or not at all.