SAP ERP and Tally ERP - A Comparative Analysis

[Former Member]

Some of the software due to its user friendly quality gets easily, quickly and widely accepted by users or say common people at ground level. It becomes a common platform among a large number of people and they start communicating in the same fashion in which such commonly accepted software talks.

As time passes, slowly and gradually such software creates a typical mind set of its users. Users becomes so friendly with the available functions and quality of the software and enjoy using it. Therefore when question of migration to advance level comes, such commonly accepted software or version becomes a bench mark. People or users start comparing the new version or new software with such bench marked software and even version.

Of this, "Windows" is one of the best example in case of operating system and "Google" in case of search engine or E-mail service.

Like wise when it comes to the area of ERP, especially in India, Tally is one of the best example of such commonly accepted software.

Tally is a basic ERP software where as SAP is advanced ERP software. Both of them started their journey as an Accounting software in the year 1986 and 1972 respectively. Both of them has their own strength and weakness.

In India, every individual or organization who has started their journey from ground level, are directly or indirectly connected and / or involved with Tally. That is the reason comparing Tally with SAP becomes a very very common exercise with every individual, user, professional one who moves from basic level to advance.

So as I have done and tried to put it into black and white for all my friends and other professionals who are on the same career path and thinks on the same track.

Though I am a certified SAP-FI consultant having reasonable knowledge of even Tally ERP, being an individual functional consultant and qualified only in FI module, this comparison can not be exclusive as I can not do minute comparison in fields other than FI nor compare the software technically.

To make it exclusive I invite suggestions, comments and criticism on the same from all the experts, mentors, seniors, professionals, colleagues and friends.

Regards

Chirag Shah

Particulars	SAP	Tally
History	SAP was founded by Five former IBM employees in the year 1972 and completed its first Financial Accounting System in 1973. SAP is a Walldorf, Germany based company	Tally as an Financial Accounting Software was Introduced by the Peutronics Pvt. Ltd. company was founded by Late Shri S. S. Goenka in the year 1986. Tally is Bangalore, India based company
About ERP	SAP is module base fully integrated, sophisticated, well tried and tested and globally accepted ERP software. Any logical combination of modules can be implemented and integrated as per requirement. Implementing and integrating SAP is considered as a project as it involves long term planning, High Investment and gestation period. Some of these modules are listed below.	Tally is beautifully integrated among various areas,  like Accounting, Finance, Inventory, Sales, Purchase, Manufacturing, Payroll, Costing, Job Costing, Legal Compliance etc. which are part of the standard software and automatically integrated by default subject to quick setup. There is no module concept in Tally. But still as on today there are some cases where two areas of the software are not talking to each other. Like Payroll is fully integrated with accounts and legal compliance but not with sales and purchase. So one can say that Tally is also a sophisticated, well tried and tested globally accepted but yet on the way to fully integrated ERP software.
	FI - stands for Financial Accounting.
	CO - stands for Controlling.
	AA - stands for Assets Accounting
	CRM  - stands for Customer Relationship Management.
	FSCM - stands for Financial Supply Chain Management.
	HR  - stands for Human Resources.
	IM - stands for Investment Management.
	MM - stands for Materials Management .
	PLM  - stands for Product Life Cycle Management.
	PM - stands for Plant Maintenance.
	PP - stands for Production Planning.
	PS  - stands for Project Systems.
	QM  - stands for Quality Management.
	SD - stands for Sales and Distribution.
	SM - stands for Service Management.
	ABAP - stands for Advanced Business Application Programming.
	Basis - is typically the administration of SAP.
	BI - stands for Business Intelligence.
	Net weaver - provides technical foundation for SAP applications.
	Solution Manager facilitates - technical support for distributed systems.
Enhancements to the standard version of the code or Customization	Through BADI or ABAP Program	Through TDL (Tally Definition Language)
Cost of ownership, Implementation and Maintenance	Very High	Comparatively very low and affordable by small business man or an individual ➕
Time involved in ownership, Implementation and Maintenance.	SAP implementation and integration involves long process, time, planning, cost etc. It can not be implemented in short period of time.	It can be Implemented very very quickly. It is as easy as thinking of a product, buying it either online or from supermarket, read instructions and start using it. ➕
User friendly	Software is not much user friendly.	Software is absolutely user friendly. ➕
Training & Learning	One can not learn it independently. It requires professional guidance and training. There are some prerequisite for enrollment in SAP exams, profile of the candidate is passed through lots of filters by SAP even for eligibility. Learning SAP is very difficult and costly affair.	Very easy to learn as educational version of the software is available along with supporting help files, online. Learning Tally doesn't require any professional training ➕
Availability of Staff / Qualified Personnel	Qualified consultants or trained staff are not easily available and are very costly affair.	There is a very good market of Tally Consultants / Data Operator, especially in India. Jobs & Recruitment of Tally personnel is internally supported by Tally. Easy to find qualified and trained personnel. ➕
Third party software support	Very High and reliable. ➕	Not very good as Tally is developed with a core proprietary engine.
Technology	Three tier (R3) architecture technology. Completely based on coding. ➕	Two tier (R2) architecture technology. It is code-less ERP System  developed with a core proprietary engine and a Software Development Kit namely Tally Definition Language (TDL) 2 tier technology has certain limitations as compared to three tier technology, that is - Data can not be processed in background - Data can not be validated or substituted - System response will become slow upon increasing users.
Speed	SAP processing speed is not very fast but it can handle huge volume of data.	Tally is lightning fast but it is true only up to certain level of data volume. ➕
Data Handling Capacity	Large / Huge data sustains, there is no hurdle or limitation in processing large database. Data can also be processed in background ➕	Software is not good in handling huge data, system stop responding in case of processing large database. Data can not be processed in background.
Legacy System Data Migration	Supported internally and functional consultant can do so. ➕	Not supported internally. It required technical knowledge, namely TDL (Tally Definition Language)
Suitable for	Good and advisable only for large scale business heaving multinational, cross border, multi location operation with multi point control.	Good and advisable only for small and medium scale business where data volume is not very high and entire operation and management is very closely controlled.
Management System	Good for Vertical Hierarchy Management System.	Good for Horizontal Management System.
Data Entry	Posting document requires passing through various screens and control which makes data entry a bit lengthy and complicated. Where normal Debit and Credit is controlled by posting key.	It is done through single data entry screen named as Voucher Entry screen which is very fast and user friendly. Simply works directly with Debit = Dr and Credit = Cr. ➕
Deletion, Modification of Transaction entered	Not allowed, can only be reversed	Allowed and it can be locked. ➕
Data Validation	Data Can be validated at entry level itself. ➕	There is no data validation.
Data Substitution	Wrong data can automatically be substituted as per various combination configured. ➕	There is no such concept of data substitution in Tally.
Atomization	Documents can automatically be generated Internally based on Recurring document configuration, accrual engine configuration etc. and posted. ➕	It can done by enhancing standard software with business add-ins which are readily available and in market and also internally managed by tally via Tally-Shop. There is also concept of voucher duplication in case of manual entry.
User Level Control	R3 technology brings very High level of user level security control ➕	User level control is good only for small scale business. User wise tolerance limit can not be defined in tally. Therefore administrator's involvement requires very frequently.
Multi level document approval system.	Document can be passed through various level before it gets posted. ➕	Document can be passed through only two levels before it gets posted. These posted vouchers can be passed through multiple Internal and external audit.
Parallel Accounting	Fully Supported and one of the most powerful function of SAP as compared to other ERP Software. ➕	There is only work around solution to it.
Chart of Account and Controlling area	SAP Supports common chart of account and controlling area be used across the company codes. ➕	Tally do not support common chart of account and controlling area be used across the company codes. It can be copied from one company code to another but the same will not automatically be updated simultaneously, it requires manual updation. This causes lots of problem in consolidated reports.
Controlling Various field at the time of creating Master & Transaction entry.	It can be controlled by field status variant which is supported in SAP internally and functional consultant can configure it as per requirement. ➕	Supported only through TDL program. Functional consultant can not control.
Mass data input	Mass data can internally be entered by by creating batch through LSMW or BDC. ➕	Mass data entry is is not supported internally. It can only be Imported through XML file.
Access to data base	SAP Database can be accessed, viewed and modified Internally. ➕ (It may involve high risk of dumping data)	Tally database is available only for view purpose. It can not be modified directly.
Data Splitting	It involves very lengthy process. It is called as data archiving.	Data can be split and rejoined. It can be done very quickly. ➕
Document / Voucher Splitting	Document gets automatically be split on various basis as per configuration. ➕	Voucher can not be split automatically.
Automatic Payment Program or Automatic Dunning	Payment list gets generated on the basis of criteria defined and the same can be reviewed, altered and finally large number of payment instructions / documents can be processed at once. Payment can be blocked for processing. ➕	Payment list can be generated and reviewed but payment instruction or documents needs to be generated manually one by one. Payment can not be blocked for processing.
Task Management and Closing Procedure	Monthly and Yearly closing procedure can be defined by arranging all the involved tasks in a flow. Different tasks can be assigned to various users. Status of the same can be viewed and controlled online with a dashboard. These procedure gets stored and can be used for multiple time in future. ➕	There is no Task management functionality in Tally.
Depreciation calculation and posting	Various types of depreciation gets calculated and posted automatically. One Assets can also be depreciated in multiple way and the same can be documented with the help of various areas of depreciation. E.g. Rate and method of depreciation  is different in case of Income Tax and MCA. ➕	Neither automatic calculation nor posting is supported. One assets can only be depreciated in one way.
Sale of Assets.	At the time of sale of assets all the relevant entries like posting mid term depreciation, calculating and posting profit / loss etc. are automatically done. The profit / loss can be calculated differently for various areas  that uses different type of depreciation. ➕	No atomization.
Number Range	There is no atomization in case of Alpha numeric voucher number range, by default.	As Tally is code less system it required number range only in case of voucher entry. Tally supports alpha numberic number range and the same gets updated automatically. ➕
Type of Ledger	There are mainly three different types of ledger namely General Ledger, Customer Ledger and Vendor Ledger.	As many ledger types as required be created. It works on parent child relationship concept and not on control account concept. ➕
Petty Cash	Separate business transactions is required to be setup for petty cash implementation.	Petty cash journal gets created based on voucher type used for recording transaction therefore no such separate business transaction setup is required. ➕
Group of Account	Parent and child relationship between various group of accounts can be defined at the time of designing financial reports. As a result as many combination of financial reports can be designed as required. ➕	Parent and child relationship between various group of accounts gets defined at the time of creating masters itself. As a result only standard version of financial statements are available.
Custom Report Designing	Supported Internally through Report Writer or through designing various financial statement versions or externally through ABAP Programming ➕	Supported externally only through TDL Programming
Legal Compliance	Rate of Tax is defined through various user defined key. Which needs to be updated time to time manually	Supported taxation rates, forms etc. gets automatically updated by updating statutory version. ➕
Comparative Analysis	By default there are only 2 years of financial data can be compared.	Comparitive analysis, by default is available for any number of years or period or even company codes in a single report. Even performance can be compared between multiple ledger accounts or multiple material  item or multiple controlling areas ➕
	Some of the Similarities
Server - Client System	Yes	Yes
Remote access & Real Time Data entry.	Yes	Yes
Multi Language Support	Yes	Yes
Ratio Analysis	Yes	Yes
Scenario Analysis	Yes	Yes
Budgeting & Variance	Yes	Yes
Customer Credit Limits	Yes	Yes
Automatic Bank reconciliation	Yes	Yes
Funds Flow & Cash Flow reports	Yes	Yes
Cost Center Accounting	Yes	Yes
Profit Center Accounting	Yes	Yes
Job Costing / Product Costing	Yes	Yes
Incorporate additional costs of purchase.	Yes	Yes
Multi-currency transactions and foreign exchange gain / loss calculations.	Yes	Yes
TDS & TCS	Yes	Yes
Service Tax & Excise	Yes	Yes
VAT & CST	Yes	Yes
MCA Reports	Yes	Yes
ESIC, PF, PT Etc.	Yes	Yes
Preparing Pay sheet, Pay Slip etc.	Yes	Yes
Multiple inventory valuation	Yes	Yes
Multiple price lists	Yes	Yes
Dual units of measure	Yes	Yes
Bar code support	Yes	Yes
Point of Sale Billing	Yes	Yes
Stock aging reports	Yes	Yes
Physical stock take records	Yes	Yes
Maintain batch & expiry details	Yes	Yes
Re-order levels	Yes	Yes
Record samples & free items	Yes	Yes
Handle Rejection and Scrap	Yes	Yes
Multiple Godown	Yes	Yes
Multiple Product Class	Yes	Yes
Respond to queries	Yes	Yes
Drill down facility	Yes	Yes
Support Post Dated / Future Transaction	Yes	Yes
Multiple type of vouchers	Yes	Yes
Posting Period control	Yes	Yes
Support Cheque Printing, Payment Advice Printing, Voucher Printing	Yes	Yes
Interest Calculation	Yes	Yes
Cheque Management & Cheque Register	Yes	Yes
Supply Chain Management	Yes	Yes