SAP’s business in the SMB community has undergone positive development in the last few years. SAP Business One and mySAP All-in-One’s mid-term reports are both rosy. According to Hans-Jürgen Uhink, Senior Vice President SMB Global Field Operations, more and more SMBs are recognizing that “IT is not a necessary evil, it’s an important factor for competitiveness. SMBs are not immune to the effects of globalization and increased competition.” SAP has also invested a great deal of time in partner training, with the focus in 2003 being placed on expanding sales and extending the partner network. SAP relies on partners’ help to respond to SMB customers’ individual needs and to cater to the growing demands of this segment.
SMB solutions’ clear-cut success
SAP Business One was launched at CeBIT 2002. Initially available in 4 country versions, by the end of 2003 the number of comprehensive country versions had increased to 25. In 2004 the number of new localizations is to be kept in single figures in a move designed to ensure that the most important markets in over 30 countries are served. Functional additions to the product, aimed to enlarge SAP Business One’s target market, are next on the agenda.
mySAP All-in-One has also had a very positive uptake. For Uhink, the figure of 5,000 customers “speaks for itself”. There are now more than 360 mySAP All-in-One solutions on the market. SAP is aiming to maintain significant growth rates in 2004. Uhink says that the Asia-Pacific region in particular, including India, China, Korea, Japan and Australia, will be a target for developing the mySAP All-in-One solutions market. “In the mySAP All-in-One sector, the number of solutions available is clear evidence of the partner channel’s vitality. In the past year alone, partners have had 230 new solutions qualified by SAP,” Uhink adds.
Solutions at industry level
However, distinguishing between SAP Business One and mySAP All-in-One can be a little more difficult. The formal distinction between the mySAP Business Suite and the mySAP All-in-One solutions has confused some customers in the past. They are not distinct entities as such, however, but rather merge into one another. The mySAP All-in One solutions are micro-vertical or subindustry-specific complete solutions from SAP business partners which are based on mySAP Business Suite or mySAP ERP. For some industries, SAP also offers Best Practices for mySAP Business Suite Industry.
Many partners have further refined these Best Practices to match the specifics of a certain industry in their mySAP All-in-One solutions. For example, SAP has defined Best Practices for Consumer Products as an industry standard. Based on these, a whole raft of mySAP All-in-One solutions has been created in the beverages, cosmetics, foodstuffs and clothing sectors.
And SMBs are calling for solutions at this industry level, since this is the only way customers’ individual needs can be catered for. Therefore, the essence of this concept is that a customer, with the help of the SAP solution offerings, uses those elements of the mySAP Business Suite that he actually needs at the moment. What’s more, this specific solution still remains scalable and flexible for the future. This means that the customer is always able to integrate new business processes quickly and easily, without implementing a new solution or adding another product via an interface. Additional programming is eliminated, making maintenance easier.
SMBs get a push
SMBs are only now getting slowly to grips with the problems posed by initiatives such as Basel II, Sarbanes-Oxley and IAS. At the moment, Basel II is only relevant for companies obliged to deliver corresponding KPIs to their credit institutes. However, SMBs are being propelled in the direction of IT, and are gradually realizing its necessity. This movement is based on the fact that very many SMBs are suppliers to, or sales partners of, large companies, and therefore sooner or later have to look at connecting to the IT systems of big business. “Because in the future even more companies will be integrated in the procurement chain,” says Uhink. However, SMBs want solutions that are tailor-made to fit their needs, and give them the flexibility to respond quickly and appropriately to different challenges.
The new SAP SMB strategy
In the past it was commonly believed that an SMB solution consisted of a large-scale business software somewhat simplified in various places. This opinion has shifted: “Since then we have recognized that these processes in SMBs are almost identical to those in large groups. A manufacturing company with 150 staff faces the same manufacturing problems as a company with 3,500 staff,” says Uhink.
Both companies have to use working plans, parts lists, machine allocations, reserved production orders, order tracking and so on. Financials is the only area where their needs differ to any great extent. SMBs generally need fewer consolidation and controlling functions than larger companies.
However, it makes no sense to offer an SMB a solution that originally had 20 parameters cut down to 5 parameters to cut the cost, since this may not meet the customer’s needs. “It’s a matter of cherry picking the specific functions each industry needs from the totality of the SAP world. You can’t just provide cookie-cutter solutions. The discussion has to take place at industry or subindustry level, otherwise it doesn’t address the realities,” explains Uhink.
This is where SAP partners and the partner network come into play. They are specialized in specific industries, and offer precisely the selection of functions from the SAP system that SMBs tend to need. They are best equipped to target problems where needed.
One such problem is the fact that SMBs usually have far more modest budgets at their disposal than large companies. This is compounded by the fact that SMB projects have a relatively greater need for external services than those of large customers, who have the in-house resources to make up project teams. SMBs usually have a maximum of two people in their IT, procurement and sales departments. If 50 percent of staff are seconded to implement a new IT solution, day-to-day work suffers.
This is what makes SAP Business Partners so important. They know the needs of SMB customers inside out, dramatically reducing the effort of implementation. Thanks to this verticalization, SAP can offer implementations at an SMB-friendly price. The acceleration of the processes means that, normally, only 15 to 25 percent of the solution ultimately needs to be customized. This is where SMBs can make savings. “SMBs don’t need software, they need solutions. It is important that we define solution broadly, and avoid looking for the crux of the problem in the software. Our partners offer these solutions at guaranteed package prices well within the reach of investment-minded SMBs,” Uhink adds.