Bosoft A/S, based in Allerød, Denmark, has traditionally been a software developer and system integrator for the Danish SMB pharmaceutical industry. According to CEO Mogens Christensen, although it came from a development background, the company recently decided that it was no longer effective to invest in developing its own software. When it started searching for a software package to complement or replace its own product, it settled on SAP Business One as the best fit for its business.
Christensen needed the software to match the product that the firm was discontinuing. Product quality was a key consideration, but it was also important that SAP Business One should integrate with Bosoft’s existing product, and that it should meet the standards that Bosoft customers had come to expect. Christensen signed the SAP partnership agreement last October, and the firm has already sold over 30 installations, a level of business that far exceeded his expectations.
Delivering to an expanding market
SAP and SAP Business One have been able to deliver, bringing the company the growth it was looking for, explains Christensen. Bosoft’s main goal was to target the pharmaceutical market, where it addresses clients ranging from hospitals to pharmacies, but it was soon selling to other markets as well. It sold five SAP Business One installations to wine traders in Denmark and is in contact with an association that supports lumber outlets. This range highlights both the flexibility of the product and one of the main characteristics of companies in the SMB arena, he says: Despite varying business orientations, their main business problems are often similar.
Christensen identifies SAP Business One as the appropriate product for the SMB market because it provides a full package: “There is no hidden agenda; you get all the functionality in one product.” One of the disadvantages he saw in Navision’s competing offering is that clients must buy a variety of modules, often adding up to more than they planned to spend. With SAP, as a business grows, the product can grow with it.
Some adjustments to SAP Business One were necessary, mainly because, as a German offering, it includes features not suitable for the Danish market. For example, Bosoft made extensive changes to the user interface.
An internal benefit from switching to SAP Business One is that Bosoft no longer needs manpower to maintain its own software, so personnel can focus on more productive tasks. “You don’t make money when your resources are fixing errors,” says Christensen.
Bosoft has developed additional functionality to support the financial side of SAP Business One to overcome what he sees as too much manual input when processing transactions and deducting taxes. The company is also developing functionality for pharmaceuticals, which will remain its core market. There are also plans to deliver two solutions for other sectors as well to expand into other markets.
One expansion strategy may be to target the installed base of SAP clients with SAP R/3 installations and approach their smaller business units or subsidiaries. At the moment, explains Christensen, the marketing approach is still ad-hoc, but he is acutely aware that the firm needs to develop a more detailed, long-term vision – rapidly.
SAP support so far is also on an ad-hoc basis. When Bosoft mentioned a business opportunity in the lumber business, for example, SAP offered support immediately. Bosoft did not initially approach SAP for market development funds or initiate joint marketing initiatives. So how did it come to attract over 30 clients? Christensen elucidates: “We have been in the business for many years; we just go out and tell our customers about it. Eventually, it probably comes down to the people you know, and the trust they have in you. They need to believe that what you say is the truth.”
A change of model
Because of the SAP partnership, Bosoft has changed its business model from software development to software service. The SAP name has enabled it to develop new contacts, and its listing on the SAP portal has brought in both clients and prospects.
SAP is actively marketing SAP Business One in Denmark, according to Christensen, and there is something about SAP Business One in the press every week. SAP has also been able to change how it is perceived by Bosoft’s target customers – going from being seen as a huge company with high installations costs to being recognized for the price and cost benefits of SAP Business One. On the one hand, he notes, failures at large SAP installations may color the clients’ perception. On the other, they think, “Why shouldn’t I be able to use it?”
Christensen lists some hurdles still to overcome. For one, SAP, as a typically German company, requires a lot of detail and paperwork – an approach very unlike the Danish culture. He sees SAP as a very professional organization but prefers to work with SAP in Denmark. SAP Denmark has given Bosoft excellent support, and the Danish account management has been crucial in helping build its SAP practice: “A big thank you to the Danish partner account manager, who is doing an excellent job as the interface between us and SAP.”