What business software challenges do your SME customers face?
Right now, our small customers are still too small for a complex ERP system, and given their particular requirements and set-up, operating and implementing an ERP system would overwhelm businesses with, say, 10 to 20 employees and an annual revenue of only €3 million. Our challenge will be to automate the services around implementation, and the implementation method itself. ERP software has to be easy for small companies to consume; they have to be able to deploy it at the click of a button. This is one of the key challenges, and SAP has to meet it, as do we, since we cover the last mile to the customer and we do the implementation.
SAP Business ByDesign has had an uphill struggle. How well is it accepted by the market now?
Market acceptance is still rather weak. You really can’t count companies at the larger end of midsize, as they are not much smaller than large enterprises or subsidiaries. SAP already has an excellent reputation in that sector, and is automatically in the running. But that is hardly the case at the smaller end of the SME sector. Many companies whose revenue is less then €50 million would not choose SAP as their software provider. They think it is for the big league only. They only consider what their peers in other companies have recommended or what everyone else in SME circles is talking about. And that tends to be small industry solutions, perhaps Microsoft, but not SAP. We are not visible to a large number of small companies, and have no market acceptance.
What can you do to improve the situation? And what can SAP do?
We have to make ourselves much more visible. We have to raise our profile, as customers are not going to come knocking on our door by themselves. And we can’t go knocking on their doors either, as that is just too expensive. Raising our profile is the job of the entire SAP ecosystem, but primarily a job for SAP’s marketing.
We also need more solutions: We need subverticals, industry packages, subindustry packages – new solutions that use SAP Business ByDesign as a platform but that are ready-to-consume solution components for a given industry or subindustry. We can’t turn up at small businesses with a horizontal ERP solution. What they want to know is whether we can meet the needs of the industry they are in. And it is these industry solutions based on SAP Business ByDesign that we don’t have right now.
Read on the next page: “SAP has yet to make an impact in the small enterprise market”
This is the really big challenge. We are competing with every conceivable software component, yet as far as small businesses are concerned, SAP doesn’t even have the advantage of being market leader. We more or less have to knock on the door of every small firm. That’s tiresome, and hardly profitable, because the profit you make from small businesses is small, but it takes just as much effort to sell to them as it does to large customers. We have to work with SAP to solve this conundrum, and that’s where I want to see more initiative. SAP has yet to make an impact in the small enterprise market.
What do you think will be the effect of SAP Business ByDesign feature pack 4.0?
Expectations are high. Everyone has been raving about this feature pack for the past six months, especially about the Software Development Kit, the development environment that will enable us to modify the software, and to provide add-ons and custom adjustments. This is something that we and our partners urgently need. In the large enterprise world of SAP R/3 and SAP ERP, the fact that we could enhance and modify the software for our customers really helped win them over. Many customers are only interested after we offer them that. That’s why we all hope that feature pack 4.0 and the Software Development Kit will get the ball rolling. Otherwise we will not get the high level of customer acceptance that we want.
About Wolfgang Schmidt
Wolfgang Schmidt worked as an IT consultant before setting up his own business in 1983, which later became itelligence AG. He was a member of the executive board and later of the supervisory board of itelligence, and in 2010 he set up the Abayoo network, one of the first service and sales networks for the SME solution SAP Business ByDesign. The Abayoo Business Network is an SAP Gold Partner and was awarded the SAP Business ByDesign Reselling Partner of the Year prize at the 2012 SAP Pinnacle Awards.