Expanding the Market, Creating a Niche

December 22, 2004 by admin

Based in Cambridge, U.K., CGA provides finance and business solutions to the distribution industry from Sage, Pegasus and, since 2003, SAP. The company also offers a variety of services including training, project management, software design and network and professional services. CGA has 200 customers, both large and smaller businesses in the U.K. and global clients.
Though the firm was not actively searching for another partnership, says Paul Martin, CGA’s managing director, it was interested to hear that SAP was building a new channel with a new product – SAP Business One. After attending an SAP presentation, CGA decided to pursue the opportunity. Other software vendors offered products competing with its existing offerings, but SAP Business One would open new markets, Martin recalls. While Sage solutions are used mainly by the very low-end of the market, SAP Business One covers the low and mid-range markets, as well as growing companies. CGA signed their SAP Business One partnership in August 2003 and quickly sold 50 licenses to six clients.
Experience had taught CGA not to expect too much from a software vendor introducing a new product and building a new channel. “We did not have high expectations, other than having the advantage of using the SAP brand name,” says Martin. However, to his delight, SAP has provided excellent account management and guidance throughout the process. “You don’t expect this from a big company, but they are very flexible and easy to deal with.”

Full functionality in one package

For CGA, the main differentiating factor for SAP Business One was that it is competitively priced and includes a range of functionality for its client base. Martin finds it “refreshing” that all the functionality is included in a single package, so clients don’t need to search for add-ons. “Simply put, it’s value for money,” he says. “Where other vendors claim you get a business system, you only receive an accounting package. SAP offers a true business system with all the functionality included. It’s an all-encompassing piece of software, and that is the right approach to the market.”
CGA has performed SAP Business One implementations for both large and smaller clients and has found that implementation time is shorter than for many other products on the market. SAP Business One can be implemented for a fixed price, within a fixed time frame. Overruns have been confined to situations where the project scope was changed during implementation.

One of CGA’s larger implementations was for electronic goods distributor PGE, who specializes in flat-panel monitors and DVDs. PGE needed a more fully integrated system with more advanced reporting requirements. CGA implemented SAP Business One in 15 days, creating an integrated system for sales, stock, and accounting – all accessible though one database – plus the required enhanced reporting capabilities.
Rather than develop any additional functionality for SAP Business One in-house, CGA decided to partner with ISGI, a U.S. SAP Business One partner, which produced job costing functionality for project management in support of CGA’s core strength in accounting. CGA has exclusive rights to sell this ISGI functionality in the U.K.

SAP Business One promotes strategic goals

“SAP Business One is already very important for our business, and we expect that this will only increase in the future,” says Martin, alluding to CGA’s plans to promote two growth strategies around the product. The company intends to sell SAP Business One as a volume product with fixed implementation times – customizing only when required by the client – and to focus on the ISGI job-costing module to create a niche accounting market. CGA does not plan to actively target its existing client base, says Martin, since it is “not in the converting business.” However, it will certify most of its personnel on SAP in the near future, so they can fulfill resource requirements once they expand their coverage.
Though some clients still associate the SAP brand name with large, expensive projects, he does not feel that this has worked against the company on an individual basis. “Clients no longer judge only on the brand name; they also review the functionality offered. Experience has taught them to be more streetwise.”
At a partnership level, Martin has found SAP easy to deal with. “There is mutual respect, and SAP is open to constructive criticism,” he says. Although he initially received mixed responses from CGA employees who were resistant to change, they have been pleased with their experience with SAP.
Some areas of the partnership could use improvement, he admits. The SAP SMB team in the UK has provided excellent account management, but he has found technical support tardy, understaffed, and unaware of the impact “small” problems can have at an SMB site. He also points to a surfeit of information.
On the plus side, SAP actively promotes its channel, Martin notes, a fact which has helped CGA raise its profile. SAP supports joint marketing initiatives, including several for local accountants and advisors. Recently, SAP UK hosted an SMB partner day. Events like these further enhance the impression of SAP being an open and flexible organization, he says. Training and sales support have also been more than sufficient.

Derek Davis

Derek Davis

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