Filling the Niches

Serac BV was formed in 1973 as an IT automation department of a Dutch holding company controlling over 50 affiliated companies. Since a management buyout in 1994, it has developed into a dedicated IT solution provider, covering hardware, software, financing, and service. It has extensive experience in software development, the small and midsize business (SMB) market, and the enterprise resource planning (ERP) market, with a strong focus on the trade and retail industries.
Serac was one of the first partners for Baan software in the Netherlands. As this market declined, the company looked for a new vendor and signed on as an SAP Business One partner in December 2002. Since then, it has invested in add-on functionality for SAP Business One to serve its two core markets. Serac expects to break even with SAP Business One by the end of 2004.
The fact that SAP was offering a completely new product – for a new market – was a decisive factor in the decision. “Having the SAP name and brand behind the product makes a big difference to us and our clients. Our clients know that when SAP commits its name to a product, it has to be a good solution,” states Mister de Nijs, Director of Serac. SAP’s large installed base also benefits Serac and builds trust for its clients.
SAP Business One’s limited functionality is both a strong and a weak point, comments de Nijs. The product should not become too complex for the SMB market, he explains, but it still needs more functionality. SAP addressed this issue through some major improvements during the second half of 2003. It is also investing in professional awareness campaigns and lead generation activity which has helped Serac improve its competitive positioning and attract new clients. “Some vendors are not seriously pursuing the opportunities in the mid-market. They do not invest in product development, which makes our proposition to clients even easier,” he adds.

Strong development skills

Serac has strong technical skills from developing solutions for its core trade and retail markets. For SAP Business One, the company has developed Retail-XML, a browser that supports and transfers logistical information for shops, and Phoenix-XML, which provides additional accountancy support. Serac’s management decided to invest in additional functionality in part because they saw the likelihood of SAP developing similar solutions as small, says de Nijs. He adds that greater opportunities for SAP Business One might follow if more investment was made in product development. One example he gives is the migration of Baan customers to SAP Business One.
A Serac installation of SAP Business One at Euroregister Netherlands severely tested the flexibility of the new product, since Euroregister needed to migrate data from Microsoft Excel. However, SAP Business One was able to meet all demands. The logistical processes of offer, order, delivery, and invoicing have been integrated completely, along with all financial transactions. The challenging project was completed to the client’s satisfaction.
Serac wants to maintain its focus on the SMB trade and retail markets. Any expansion will be into more niche markets within the trade industry, not into other vertical markets, says de Nijs. He explains that SAP Business One itself and Serac’s added functionality provide sufficient opportunity for future growth, which it plans to accelerate through a partnership with Canon. Canon is positioning itself in the market for office automation, and the SAP Business One offering complements this stance. The advantage for Serac is being able to lower the cost per sale.

Service for the long haul

Since Serac also signs contracts that include a service component – spread over as long as five years – it cannot capture all of its revenue at once. The company has developed its own marketing plan and also receives support from SAP, with whom it has created a separate business plan. To generate leads, they have held several joint marketing events, such as breakfast sessions and seminars.
The employees are enthusiastic about the SAP partnership, notes Mister de Nijs: “Since they had been working with Baan previously, they had been in a negative environment for a while. Now they see the possibilities and opportunities that SAP Business One provides.” Major drivers for the employees are the training they receive and the fact that working with SAP is a positive personal development issue.
Mister de Nijs explains that the personal relationship remains crucial in the SAP partnership, and that this can vary by country. In the Netherlands, it took time for SAP to be able to fully communicate and interact with the channel. Serac remains hesitant about working with large organizations that take a long time to make decisions. He would like to see more flexibility, which is especially necessary when working in the SMB market.
The cooperation Serac has received from SAP Germany has been excellent for marketing and lead generation activities, he emphasizes. And though Serac was forced to solve many sales issues by itself, the experience helped the firm get up to speed with all the ins and outs of the product. Since it can cover much of the technical side in-house, Serac has not had much need for technical support from SAP. In fact, because of the early “hands on” experience with the product, it has actually been supporting SAP with training. Ultimately, de Nijs would like to see this result in Serac becoming a training as well as a development partner for SAP Business One.

Derek Davis
Derek Davis