DDD Gruppen, a Danish IT solution provider, may have only one office and seven employees so far, but it is gearing up for major expansion since partnering with SAP on SAP Business One. Started more than 30 years ago by Paul Erik Pedersen, the company is now run by his son Henrik, who took over as CEO last year.
Over time, it has focused on vertical IT solutions for the electrical and plumbing industries. Previously, DDD Gruppen developed its own solutions, but when costs of development and maintenance proved too high, the company started looking for a third-party application and reviewed four vendors: Visma, Hansa, Navision, and SAP. Visma and Hansa seemed too small and local to meet their clients’ requirements, recalls Pedersen, and the company had doubts about Navision’s market position in Denmark.
That left SAP, but at first DDD Gruppen also had doubts about SAP, thinking it was too large to work with. After the first meeting, however, where they discussed DDD Gruppen’s needs, selling approaches, and add-on functionality for vertical markets, these doubts disappeared. The attractive pricing of SAP Business One is important on the SMB market, Pedersen notes, where customers look at pricing first, then at value. The solidity and continuity guaranteed by the sheer size of SAP were important factors as well.
A quick start
Pedersen signed the SAP partnership contract in March 2003, two months after seeing the demo, and began selling SAP Business One in June. Since then the company has experienced phenomenal growth, selling over 30 licenses in the first few months and adding 33 more in December 2003 alone. DDD Gruppen is now the largest SAP Business One reseller in Denmark and plans to maintain and expand this position over the next few years. It was named SAP Business One partner of the year 2003 in Denmark.
“We would not have been able to grow with the speed we have had it not been for SAP Business One,” says Pedersen. Employees note that the change to focus on SAP Business One “is the best that has ever happened to us.”
When DDD Gruppen started to work with SAP Business One, it was important for the company to continue offering specific industry functionality, especially since it was planning to discontinue developing its own products. The expertise gained in the electrical and plumbing environment enabled the company to add layers of vertical functionality on top of SAP Business One. And although this required a sizeable internal investment, it was less expensive than continuing its own products.
DDD Gruppen anticipates both distributing the new vertical solution commercially – including signing partnerships with SAP Business One resellers in Denmark – and eventually expanding to cover the Norwegian and Swedish markets. The company is also planning a solution for the veterinary sector by the end of this year.
A larger client base
The SAP Business One practice has enabled the company to reach larger clients than before, notes Pedersen, when they primarily served customers with 1-50 employees. Still, the plan is to maintain a strategic focus on the SMB market. The company will work with partners when clients need more sophisticated SAP solutions (such as mySAP All-in-One or SAP R/3). At the moment, Pedersen sees little competition. No other SAP Business One dealers are situated in the same geographical area, and there is no competition at all for the vertical solution that DDD Gruppen has developed.
The company currently has 33 SAP Business One projects up and running. The first three took a couple of days longer than planned, Pedersen notes, but he looks on them as learning days. Now, the average implementation takes about four days. “As soon as we had the experience, we were amazed at how easy it is to install,” he says.
He mentions in particular the implementation for HP EL-service, an electrical company with four departments in Denmark and over 70 employees. Looking for a reliable, predictable, and user-friendly IT system, it choose SAP Business One and DDD Gruppen for several reasons: DDD Gruppen’s unique vertical solutions, the ability for HP EL-service to keep its old data and convert it to SAP, functionality for creating its own reports, the “Drag and Relate” function and industry word that SAP was one of the best products available.
DDD Gruppen implemented the solution for HP EL-service in four days – one day for installation, one for converting the old data, and two for training. HP EL-service can now easily maintain its financial and bookkeeping activities, leaving more time to focus on its core business activities.
SAP support has been crucial during DDD Gruppen’s rapid growth, says Pedersen. “Though SAP Denmark has only three account managers, they do the work of six.” He especially applauds the sales support and the fact that SAP can help when the company gets serious about geographical expansion.
During the short time of the partnership, he feels that his company has already transformed into a seasoned SAP Business One professional. As a result, he has requested a hands-off management approach. The company gets feedback from SAP in a structured, targeted, and professional manner, he notes, but sometimes SAP seemed to be monitoring the operation too closely. The same applies to SAP sales support, which he says is of excellent quality, but points out that DDD Gruppen can cover this itself. That said, he remains confident that he can call upon SAP at any time.
In marketing, DDD Gruppen and SAP conducted a large SAP Business One campaign during fall/winter 2003. It was nothing fancy, says Pedersen, but solid and reliable, using radio, newspapers, and direct mail. It has produced a number of leads that turned into actual sales, and he expects that SAP will continue to generate about 15 percent of the company’s leads.