A Region of Entrepreneurs

February 19, 2009 by Uta Spinger and Georg Middendorf

Luis Murguia SVP for SME in Latin America

What role do small and midsize companies play in the Latin American markets?

Luis Murguia: In Latin America, everything is driven by locally grown businesses. All the enterprises in the farming or the cattle industries, for example, started as a one-person business before expanding and growing.

Actually, the SME business is strategic not only for Latin America, but also for the world economy, because these are the companies that will produce the food and goods the world needs in the next hundred years.

What challenges do small companies face in Latin America? How can SAP help to address them?

Murguia: For SAP it is strategic to be a key player in the SME market, because these companies are growing and will continue to do so at a very, very fast pace. Pharmaceutical companies, for instance, have been doubling their revenue year after year. In fact, in recent years, a lot of midsize companies have become large enterprises.

But they lack the expertise and experience of large global companies. This is where SAP can step in to help them become best-run businesses. We provide them with best practices, with proven processes used by the best companies in different industries. SAP enables small and midsize companies to be competitive in the global economy.

Luis Murguia, SVP SME Latin America, has more than 20 years of experience in the information technology business in many Latin America countries. He joined SAP in 2006 and manages the SAP Latin America business with small and midsize enterprises.

How do you convince small and midsize companies that SAP has the right solutions for them?

Murguia: Customer references are essential. While this applies to many areas, it is particularly true of Latin America because it is a region of entrepreneurs. But our customers are very skeptical – they have to see a solution working before they are truly convinced. For example, it took a visit to a hospital in Colombia that successfully runs SAP to convince a Brazilian healthcare customer of the value of SAP solutions.

With the help of best practices, we are destroying the myth that SAP is expensive and complex. And with the Fast Start program, we can prove it. Customers can go to the SAP Business All-in-One configurator, configure their solutions online, and receive an immediate cost estimate for a cost-effective deployment. We can prove that a midsize company can install SAP with a budget of U.S.$150,000.

The owners of SMEs have one thing in common: a lack of patience. Large enterprises have big pockets and can make major investments. For SMEs, on the other hand, there is only one project – SAP – and it cannot fail. Because if it fails, the company fails. So that’s why to be successful with SMEs, the implementation projects must be wrapped up very quickly. The owners must see immediate results and benefits of the implementation.

Especially in the SME market, you need partners to sell and localize SAP solutions. How is this ecosystem developing in Latin America?

Murguia: As I mentioned before, Latin America is a region of entrepreneurs. And this applies to the IT sector as well – which allows Latin America to have a very good ecosystem. We have around 120 SAP Business One and around 110 SAP Business All-in-One channel partners.

And the impact on our business is significant. In Latin America, over 40% of the revenue in the first half of this year came from our channel partners within the SME space.

What are your priorities for 2009?

Murguia: Our major priority will be to packetize the best solutions and processes from large enterprises and localize them to match the specific realities of SME customers in Latin America. That way we can not only help them become best-run businesses, but also take them to a new level.

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