Bust a Move? Sounds Like Fun, but First Let’s Bust A Few Enterprise Software Myths in Wholesale Distribution

If only there was a Snopes for enterprise software – the definitive reference source for urban legends, myths, rumors and mis-information.  Alas, it doesn’t exist, so allow me the pleasure of busting a few myths about enterprise software for midsize companies in the wholesale distribution industry.

Everyone wants to grow their business, right? If not, then why are you in business? Small, niche software providers will approach you with a very tailored offering to your particular micro-vertical within the wholesale industry. What they don’t tell you is that it will work for your business as it is today, but not for your business as it grows and morphs over time.

Every day, in every micro-vertical of the wholesale distribution industry, we hear that in order to survive, you need to look beyond the traditional break bulk model and look to other, profitable business models to drive growth and profits. For example: in addition to selling MRO parts, why not offer services around them – change the oil and do periodic maintenance on your customers generators? And, charge them a highly profitable premium for doing so. Or, start to merchandise your C-Store customer’s shelves to ensure your highest profitability items are given optimal shelf positioning and more linear space. Or, perform some light manufacturing to customize products for your customer’s specific needs; another highly profitable value added service.

The options, as well as your imagination can be unlimited, but is your enterprise software? Will that niche package you’re considering purchasing because it looks and feels just like your operations as they are today stand the test of time when you need to expand your business to continue to grow profitably?

Yes, yes, I know these niche players are, for lack of a better word, cheap. But, as the old saying goes: You get what you pay for.

However, I digress. Let’s get back to the main point and talk about the myths around some of the larger enterprise software providers, in this case: SAP.

The Myths: Too Big, Too Complex, Too Expensive

A little known fact about the SAP for Wholesale Distribution solution portfolio: There are more than 6,000 small and midsize companies running all or part of their key business processes on SAP for Wholesale Distribution solutions today.

Now, let’s bust the myths, and “Snope” the SAP for Wholesale Distribution solution portfolio:

Too Big: Well, the portfolio wasn’t too big for more than 6000 customers. And, SAP as an organization isn’t too big for you. Our focus and efforts in your industry are on companies of your size. As a business looking at opportunity for future growth, as we all do, it is a fact that cannot be ignored – more than 90% of the companies in the wholesale distribution industry are considered small and midsize. That’s where our current and future customer base lies. We recognize it, and are continuously evolving our solution and implementation offerings to support just your size company.

Too Complex: I beg to differ, and here’s why: In recent years, SAP has introduced SAP Rapid Deployment solutions. The rapid-deployment solutions consist of software that is pre-configured for one of your core business processes (consumable chunks) and is delivered with a comprehensive implementation template. The pre-configuration is based on work with thousands of customers over the years to learn the common configuration settings and pre-define those in the software. Why re-invent the wheel if you don’t have to? Also worth noting: Each and every rapid-deployment solution can be implemented in 90 days or less or SAP doesn’t put it on the market.

Too Expensive: Let’s readdress the SAP Rapid Deployment solutions. Each is offered at a fixed price to ensure a low total cost of ownership. All of us hear about the big “name brand” companies who have taken years and millions to implement SAP. We hear about them because the names are recognizable, and the stories get read. What we don’t hear about are the thousands of small and midsize companies that have successfully implemented SAP solutions and:

  • Increased sales per employee by 28%
  • Decreased cost to ship by 20%
  • Decreased DSO by 10%
  • Increased warehouse space availability by 14%

You would, most likely, not recognize the names of any of these companies, and they certainly don’t make the big news stories. But for every long, expensive implementation reported in the press, there are literally thousands of great successes where SAP for Wholesale Distribution customers have reduced costs and increased profitability.

This is just a short session in myth busting. So, we hope you’ll give us the opportunity to tell you more about how your peers have been able to grow profitability using SAP for Wholesale Distribution solutions.

This is not your grandmother’s SAP. So now, let’s bust a move!

 – Karen S. Lynch is vice president of the Global Wholesale Distribution Industry Business Unit at SAP.