Leitwerk GmbH, founded as a software developer, made the decision in 1997 to expand into a system integrator handling hardware, software, networking, Internet, web design, training, and services. A daughter company, Leitwerk Business Solutions (LBS), was founded in 2003 to concentrate on SAP solutions for the SMB market – both mySAP All-in-One and SAP Business One.
After reviewing solutions from various vendors, the company was on the verge of signing a partnership with another leading vendor for the SMB market when it discovered SAP Business One. It turned out to be the alternative that LBS was looking for. SAP, as a market leader worldwide, brings special benefits and guarantees to both LBS and its customers, says CEO Alexander Friedrich Holzmann, and since LBS employs SAP R/3-certified personnel, it has a broad SAP skill set. The firm also benefits from its established partnerships, including CSC Ploenzke and the Comgroup, which support them in international projects.
LBS has what Holzmann terms an “obsession” with gaining a solid knowledge of its customers’ businesses in order to support them with appropriate solutions. This is further fertilized by the fact that the company loves SAP Business One. “The customers notice our affection for the product and this is important for them as well,” he says. “We have a strong belief in SAP and its commitment to further develop and enhance the product.”
Holzmann sees SAP Business One as becoming the leading solution among SMBs in Germany. The fact that SAP is committed to its SMB channel strategy – using only partners to sell Business One – sends a strong message. Not only does the SAP brand improve the company’s market position, he explains, its SAP business generates substantial sales of hardware and other services.
Easy to sell
“In our experience it is fairly easy to sell SAP Business One – the sales cycle can be as short as two days,” notes Holzmann. LBS gained 11 clients in the first nine months of active selling. However, he adds, the company has yet to generate substantial profits from SAP Business One because it has had to invest in both training and closing functionality gaps in the product. These gaps led LBS to overrun implementation times at some customer sites, which is why the company wants to stay focused on product development and customer fit, while building experience.
However, there was no such gap when implementing an SAP Business One Solution at Trefz, a logistics service provider that distributes mail and print advertisements. Despite the company’s complicated logistics processes being a major challenge, LBS delivered the solution “on time, on budget, and with perfect quality” within three weeks, says Holzmann.
Initially, LBS expected that SAP Business One would offer a more extensive range of functionality, he recalls. To bring additional functionality to its existing customer base, LBS has developed a solution for the food sector called Leitwerk Business One Food, as well as two horizontal export solutions. And since determining that SAP Business One does not address issues for high-end SMBs, the company has added the sale of mySAP All-in-One to cover the upper-level SMB market.
Hoping to act as a catalyst for the sale of add-on functionality from other partners as well, LBS is planning an SAP Business One portal where partners can offer additional functionality. More readily available functionality – either from SAP or from the partners – will eventually fuel growth and adoption of the product, suggests Holzmann.
Expanding through subsidiaries and partners
The company would like to become the number one SAP Business One reseller in Germany. It has offices in Baden-Wurttemberg and plans to obtain coverage throughout the country by setting up more subsidiaries.
Holzmann notes that its strong partner network will also help it reach the desired geographical presence. Comgroup, one of its partners, is certified to sell SAP R/3 licenses and LBS can benefit from its national presence to gain coverage for SAP Business One as well, since Comgroup does not plan to expand into SAP Business One. He also sees opportunities for using the larger SAP R/3 accounts of partners to sell SAP Business One at their smaller sites.
SAP, he says, has provided excellent support to LBS with leads and campaigns. They have planned roundtable sessions, breakfast briefings, and joint attendance at an exhibition visited by 500 decision-makers. On a critical note, he feels that SAP has invested money in awareness campaigns that did not reach customers well and that it would be useful to have more campaigns using local magazines and radio commercials – media that reach the end-user LBS is aiming for.
SAP is aware that it depends on partnerships for a successful SMB strategy, says Holzmann. From both a strategic and operational perspective, SAP is improving its partner activity to execute locally. Though the gaps in functionality, combined with the fact that SAP is addressing a completely different market segment, did not benefit the relationship initially, he recalls, both sides are working hard to improve the situation.
The SMB strategy remains the most important element for LBS, he says. LBS has a strong belief in the SAP Business One product and its further development as well as SAP’s commitment to the size and quality of the SMB channel. From a strategic perspective, LBS is in line with SAP and what they want to achieve. The operational element, he says, will improve over time.