SAP alternative in South Africa: what 40 staff replace

The right SAP alternative for a 40-person South African business is often not another ERP. List what your business uses of SAP Business One, and what it runs in Excel beside it. Price what you use, then decide whether to replace the system or connect around it.

That order matters because the rand figure you are trying to cut is rarely the licence alone. It is the licence, the partner, the maintenance and the spreadsheets that grew up beside the system because it was too slow or too expensive to change.

What an owner on SAP Business One actually uses

Ask the finance manager and the warehouse lead to list every screen they open in a normal week. In a distribution or trade business of 40 people, the list might be as short as this:

• the general ledger and month-end journals;
• purchase orders and supplier invoices;
• stock on hand and stock movements;
• sales invoices and the debtors age analysis.

Then list what happens outside it. Quotes built in Excel, job cards on paper or WhatsApp, and rosters in a shared sheet. Commission worked out by hand. The management pack assembled from four exports every month.

That second list is the real picture. A recent a16z essay describes finance teams "stitching together exports from a constellation of point solutions and Excel orbiting thirty-year-old ERPs". It was written by a US venture firm. It describes most South African businesses running a mid-market ERP just as well.

SAP alternative costs: what to ask for in rands

There is no published rand price for SAP Business One. It is sold only through partners, and licensed per named user: either a perpetual licence with annual maintenance on top, or a monthly subscription. The only number that means anything is the one on your own invoices. Ask your partner, or your bookkeeper, for five lines covering the last 12 months:

1. Licences: the number of named users, and how many logged in during the last 90 days.
2. Maintenance or subscription: the annual percentage or monthly fee, and the date it next increases.
3. Partner support: hours billed, and the rate.
4. Change requests: what you paid for reports, fields or integrations added since go-live.
5. Hosting: the server, the cloud bill or the partner's hosting fee.

Add the sixth line yourself: the hours your staff spend re-typing between SAP and the spreadsheets. At an illustrative loaded cost of R250 an hour, 20 hours a week is R260 000 a year. In many businesses that line is larger than the licence.

Where the pressure to leave comes from

A survey of VMware customers, reported by Ars Technica, found 90% of respondents considering alternatives because of higher licensing costs. The sources differ on its size: Ars Technica says 300 organisations, while Rimini Street's own release says 269 people across nearly 300 organisations. Treat it with care. Unisphere Research ran it for Rimini Street, which sells third-party support for Oracle, SAP and VMware, and it is about VMware, not SAP. What it does show is the usual sequence: a price rise starts the conversation, and operational complexity is what stops the move.

Replace or connect

Replacing the ERP makes sense in a narrow set of cases. The partner relationship has broken down. The version is out of support. Or the business has changed shape so much that the ledger structure no longer fits.

Connecting makes sense when the ledger works and the pain sits in the spreadsheets around it. In that case a new ERP moves the same problem into a new system, at the price of a full migration. The quotes, job cards and rosters still have to be built somewhere, and still have to post back to the ledger.

A test that settles most cases: count the screens on your first list, and the spreadsheets on your second. If the spreadsheets outnumber the screens, the ERP is not your problem.

A16z makes the same point from the other end. The new generation of finance tools, it says, "automates the data collection itself rather than waiting to be fed". The gain comes from the data arriving without re-typing, not from the logo on the ledger.

What a 40-person business can do this month

Start with licences. List the users who have not logged in for 90 days, and ask your partner what dropping them at the next renewal would save. Then take the spreadsheet that costs the most hours and decide whether it should feed SAP directly.

The comparison on our SAP Business One alternative page sets out when staying is the right answer, and when it is not. If you run Sage or Xero beside SAP for a subsidiary, the Sage connection is the place to start.

Zorah's approach is to audit first, fix one workflow properly, and then connect the rest of the tools you already run. Sometimes that leaves SAP exactly where it is. On Monday, ask your partner for the named-user list and the last login date of each. That one report tells you whether you are paying for a system or for seats.