Small to midsize businesses (SMBs) have not been slow to recognize the potential in opening their doors to new business partners and customers. Whether it’s a matter of a business connecting with its suppliers and distributors or a subsidiary communicating with their parent company and organizational divisions, SMBs are keenly aware of the integration issue. Faced with challenges that include delivering improved customer service and developing closer business partnerships and supplier interactions, SMBs are increasingly utilizing integration technology strategically to improve their connectivity and information processing capabilities with key business partners. Recent Gartner predictions forecast that more than 60 percent of SMBs will be integrating their applications with those of their trading partners by 2005.
Whatever the motivation for greater connectivity, one major obstacle for SMBs is the high cost and complexity of the market. SAP has long been aware that SMBs’ business needs are different to those of larger companies. But what hasn’t been forgotten along the way is that the ultimate business goals are the same – lower cost, higher returns, and quicker time-to-market. It is SAP’s aim to afford SMBs as much potential to operate in the wider ecosystem as their larger business partners.
Getting to the point
Of the many integration approaches on the market today, point-to-point integration is probably the most common. For some businesses it can present an ideal, low-cost solution and understandably many SMBs have chosen to take this route. However, the drawback of this type of integration is that it literally only works up to a ‘point’ – potential for expansion without creating greater complexity is limited. As soon as companies want to hook up with more business partners, each extra point brings increased complexity, slows processes down, and ultimately increases costs. To avoid this predicament, companies need to clearly understand the distinction between integration technology and a holistic integration strategy. Integration should not hinge on an impressive array of touch points and an interconnectivity that defies comprehension. It has to be about greater simplicity, a streamlining of technology, and the harmonization of data and business processes. An effective integration strategy combines business vision, business practice, and technology – integrating people, information, and business processes.
All roads lead to Rome
This is a road already well traveled by SAP with its solutions for small to midsize businesses – SAP Business One and mySAP All-in-One – delivered through SAP’s dedicated partner network. mySAP All-in-One solutions are built on mySAP Business Suite, SAP’s comprehensive and tightly integrated suite of adaptive business solutions. And mySAP Business Suite is powered by SAP NetWeaver, an integration and application platform with an open and flexible infrastructure that enables seamless integration with both SAP and non-SAP applications. This powerful combination provides mySAP All-in-One customers with the unique advantage of virtually unlimited integration and collaboration possibilities.
Leveraging SAP NetWeaver, mySAP All-in-One employs a generic approach to integration – ‘all roads lead to Rome’ or all systems communicate through one integration hub, reducing the amount of connections dramatically. With all systems docking to one hub, a simpler and more logical data exchange between all parties is possible. Standard interfaces, interoperability, and Web services bring together users, information, and business processes across technical and company boundaries. Portal technology and multi-channel access enable people integration, while Business Intelligence and Business Process Management take care of integrating information and business processes.
Tailored towards smaller enterprises, SAP Business One is built on open standards and offers integral capabilities to communicate with other systems – focusing particularly on establishing collaborative business between SMBs and members of the SAP community using mySAP Business Suite solutions. To this end, SAP delivers SAP Business One complete with the SAP Business One Integration Toolkit for mySAP Business Suite. Available since June 2003, the SAP Business One Integration Toolkit 1.5 provides a Web-based environment through which SAP Business One can be integrated into other systems – either for the purpose of simple data exchange or to run integrated, collaborative business scenarios.
These pre-defined collaborative business scenarios apply the integration technology of the SAP Exchange Infrastructure to link enterprises using mySAP Business Suite with the SAP Business One systems of their smaller subsidiaries. Parent companies can use the scenarios to streamline data exchange, consolidate enterprise-wide data, and monitor the activities of their subsidiaries. Similarly, SMBs using SAP Business One can achieve greater transparency in their supply and demand chains by integrating with mySAP Business Suite – at the same time establishing greater data consistency and awareness. And based on the same integration technology, SMBs running SAP Business One can collaborate easily with SMBs using mySAP All-in-One solutions.
Integration in action
Let’s take the integration scenario for vendor-managed inventory and central replenishment planning as an example. The main goal of this scenario is to open up the planning and stock management expertise of a company group using mySAP Business Suite to its smaller subsidiaries and partners running SAP Business One – linking them seamlessly with the centrally planned stock and transportation network. The subsidiaries and partners in this example are local sales offices. Responsible for selling the group’s products to its end customers, the subsidiaries and partners stock the most frequently sold items. The sales order data and the actual stock situation at the local sales offices provide the basis for supply and demand planning and forecasting in mySAP Business Suite at the parent company.
Using the integration scenario, sales order data and actual stock data can be transferred daily from SAP Business One to SAP Advanced Planner and Optimizer (SAP APO). Demand planning, forecasting, and Supply Network Planning (SNP) take place in SAP APO, where a transport order is created. A sales order is generated in SAP R/3 for delivery of the material to the subsidiary or partner location. In SAP Business One, the system reacts to the data from SAP R/3 and creates a corresponding purchase order. This initiates a delivery note back in SAP R/3, which in turn triggers an automatic alert in SAP Business One in the form of an Advanced Shipping Notification. Prompted by an outgoing invoice in SAP R/3, an incoming invoice in SAP Business One brings the collaborative process to a close. The real-time data exchange and connectivity of this scenario ensure that all links in the chain are in synch and that order and delivery are fulfilled on time in the most efficient way possible.
The way forward
But what about integration of non-SAP systems? It is clear that most companies today are looking to industry leaders to take integration full circle and incorporate third party systems and applications into the mix. Open, cross-system, cross-provider integration standards are paramount if SMBs are going to take collaboration to the next level. SAP is well on its way here. There are numerous examples today of mySAP All-in-One solutions that interface with third party solutions to allow for the highest possible degree of verticalization – take, for instance, the integration of third party weighing solutions with mySAP All-in-One in the area of process manufacturing. SAP’s partners also use mySAP All-in-One and the competitive SAP infrastructure to integrate with third party solutions and make the ‘all-in-one’ catchphrase a reality. This kind of integration allows partners to offer tailored IT solutions that target specific segments of the SMB market.
The open interfaces of SAP Business One already support connectivity with the qualified solutions of SAP Business One partners. And the SAP Software Development Kit (SDK) helps companies to adapt SAP Business One interfaces to ease integration with other third party applications – both on a database and user interface level. Providing interfaces, sample code, documentation, and development tools, a customer’s development team can use the SAP Business One SDK to adapt or extend the functionality of SAP Business One and cater for their own industry-specific or company-specific needs. In the future, SAP Business One will support an increasingly broader range of technologies and communication standards to provide an even wider array of collaboration opportunities. Ultimately, no matter what solution an SMB customer is using today, they can look forward with certainty to a future of even simpler integration with their business partners – regardless of the system or the provider.
At the end of the day, SAP is striving to strike a balance for its SMB customers – ground-breaking integration technology alongside tailored business functionality. Technology, while a critical enabler, is not the only concern. SAP’s goal for its SMB customers – and indeed for all SAP customers – is to ensure that the technology fulfills the business need – significantly increasing revenue or at the very least decreasing the cost of generating that revenue. Flexibility, business agility, and speed of response are also in the forefront of SAP’s development plans. This is the kind of integration that lies at the heart of SAP’s SMB strategy for 2004 and beyond. Not because technology dictates it but because business dictates it – and because SAP firmly believes it’s the best way forward for companies.