The Joys (and Woes) of the Early Adopter

Practical Software Solutions, based in Concord, North Carolina, was founded to provide services to small and midsize businesses, ranging from software sales, implementation, training, and customization to business process re-engineering.
In the SMB market, clients do not have the bandwidth to work with multiple consultants, says Vince Stamey, CEO of Practical, so Practical makes it an issue to attract and retain highly qualified consultants with a broad range of SMB expertise: “Our implementers have diverse backgrounds and hands-on experience within the manufacturing, general business, and information technology disciplines.
“They have held executive management positions in businesses and have been responsible for the materials aspects of various manufacturing environments. What makes our implementers unique is that they not only know how to install and configure a system, they also know how to integrate the system into the customer’s working business model.”

Taking a chance

Practical partners with several software vendors, including Best Software and MAS 500. As of May 2003, they have also become an SAP Business One partner.
Several reasons led Practical to SAP Business One. First of all, SAP, as one of the world’s leading software vendors, has the capital resources to make things happen in the software industry: The financial viability of the company already eliminates a lot of problems. “We were willing to take a chance on an unproven product because a company of SAP’s size was backing it,” Stamey says.
Secondly, SAP has communicated a clear strategy of where it wants to be with SAP Business One and how it wants to get there. Stamey notes that SAP has proven it can make things happen in the software industry and is committed to making a success of their SMB initiative.
Practical’s history with the HP 3000 environment and knowledge of production environments also align well with SAP Business One. The company invested strongly to get acquainted with the product, but, says Stamey, SAP has done an excellent job of controlling these costs: “In the end, it comes down to us paying only the traveling costs. Other costs will be returned indirectly through co-op funds and marketing development.”

It pays to hire experience

Practical has hired skilled experts to complement SAP’s Business One team, helping create a personal relationship with SAP, and Stamey has set some ambitious goals for the SAP partnership: “We expect our affiliation with SAP to double the size of our company within the next 24 months.” Despite initial reservations about the perception of SAP as unwieldy and expensive, he has not run into a single prospect that expressed this concern.
“Business One is an awesome opportunity for any reseller out there,” he says. It has opened up the lower end of the SMB market to Practical, which already partnered with Best Software in serving the upper end of the market. Stamey estimates that the lower end could provide four to five times as many deals as the upper end of the market.
He also notes that SAP R/3 is implemented in many Fortune 1000 companies, most of which have smaller divisions that do not need full-scale SAP implementations, providing a huge opportunity to implement SAP Business One at these sites.
Since most SMBs have limited staff, explains Stamey, they prefer a simple software structure that incorporates all their required functionality with the same look and feel. SAP Business One offers standard features that other vendors provide only as bolt-on modules, is easy to install, and is simple to work with. Any customization required can usually be taken care of in the initial stage of implementation.
Being one of the first companies in the U.S. to partner with SAP for SAP Business One brought both benefits and challenges. On the positive side, “We will know the SAP Business One story first-hand because we have lived it,” notes Stamey. The down side is that the firm needed to get past the issues of trial and error that early adopters often face, such as programs that weren’t ready or were late to roll out. However, Practical’s experience with SAP is that when they do roll out the products, they do it well and usually beyond expectations.
As an example of a successful implementation, Stamey points to Yapson Trading Company, of Atlanta, Georgia, which owns five stores called Wonderdollar, with about 30 employees. Yapson had a totally manual system where everything was kept on paper or in the owner’s head. Practical’s big challenge was to automate the process from scratch. The resulting five-user system was delivered on time and within budget, and satisfied the client’s original requirements.

Spreading the risks

By increasing market share through expansion of its territory, Practical hopes within two years to become the primary reseller of SAP Business One in the Southeast and one of its top resellers throughout the US. “Partnering with SAP allows us to spread our financial risks across two separate vendors and provides the opportunity to double the size of our company,” says Stamey.
Since Practical relies heavily on its consultants, it is crucial that these consultants support the SAP partnership as well. They have found that partnership with a major software vendor provides them with a sense of job security and makes their field job easier because they don’t need to justify negative earnings reports.
Stamey indicates that the dedication of SAP and its Business One team will guarantee the success of this product in the US. “The SAP Business One team is very dedicated to making Business One a top contender in the SMB market. Even on a Friday night at 10 p.m. we get e-mail response from SAP executives.”
The process of putting marketing programs in place had been slow, Stamey admits. He would have appreciated a more aggressive rollout of the marketing campaigns from SAP but likes the marketing initiatives that have been presented since last September. SAP supports Practical with co-op funding, and SAP sales and training support has been excellent, he says. Similarly, the technical knowledge at SAP is exceptional.

Derek Davis
Derek Davis