SAP is not a name that’s usually associated with small and medium-sized businesses. “SAP is perceived as for the enterprise, complex, expensive and as taking a long time to roll out,” agreed Marc O’Dwyer, managing director of SAP BusinessOne master reseller Irish International Sales (IIS). “It’s not the first name that comes to mind for smaller companies.”
Changing perceptions
But SAP and its partners are seeking to address that perception. “Our challenge is to get on the shopping list and answer the initial objections on cost and length of roll out,” O’Dwyer said, claiming that once potential customers see the software, “it’s a pleasure to present and sell”.
What are the benefits of SAP’s BusinessOne software solution? “You’re able to get an enterprise, large corporate solution at a price and with an easy rollout thatís more suited to the small business sector,” O’Dwyer argued. “It can give you the same management information thatís available to large corporations out of the box.”
BusinessOne is developed from the ground up – it’s not a cut down product from the enterprise space. “The product is flexible and you get everything you need – including finance, multi-currency, built-in CRM, HR, services management module, product accounting – out of the box. You can be up and running in as little as two days.”
SAP is affordable
O’Dwyer also emphasised the affordability. “It’s very competitively priced. You can get all the modules for €2,500. A two user system, including services and two days training, costs €8,300. The annual licence and support costs after that is €1,075 a year. That’s not excessive at all.”
Commitment to small business
Phil Codd, general manager of SAP Ireland, said that those inclined to doubt SAP’s commitment to the small business market, should bear in mind the SAP board’s aim to have 150,000 customers by 2010. At the moment, it has about 37,000 which it has taken 32 years to get. “The only way to achieve a threefold increase in customers in the next four years is in the small business space,” he said. “BusinessOne has a shorter sales cycle so we can widen our audience as quickly as possible.”
Rent the software as you need it
Another SAP product that has been taken up by small business customers is MySAP ERP. Intalec is a SAP reseller that specialises in professional services and recently launched into the legal practices area, but it also offers customers the option of MySAP ERP on an application service provision (ASP) basis. Executive director James Crossley said the ASP offering is the same product “but you just rent the time or number of seats. It’s very good for smaller companies. We supply the technology back up and upgrades, they just log on and work on our systems.”
A big advantage is it’s “completely scalable, up and down. We have clients on our ASP service that are subsidiaries of overseas companies that run SAP. ASP is the ultimate outsourcing. It suits smaller companies well because we are the IT people. There are very good cost reasons as well as operational reasons. Unless youíre looking to spend €500,000 minimum, the ASP model is probably better. Excluding the implementation, you’re looking at seat rentals of €300 a month.”
The version aimed at legal practices was unveiled in the UK in October – it will be launched in Ireland this month – and a lot of large firms have expressed an interest. Crossley said it’s likely to be offered to smaller companies on an ASP basis.
Build on templates
SAP partners typically build templated solutions for specific industries. In the case of Horizon Technology Group’s Client Solutions, its templated solution “enables us to implement what we call the ‘foundation block’ – a pre-loaded system with ten company codes, local finance and tax regulations pre-configured. The system is up and running on day one,” said SAP development manager Gerry Power.
Client Solutions is focused exclusively on the small business market and has 25 implementations in the Irish market. Although Power suggests that although typical customer is in the €50 million turnover and beyond bracket and the “typical implementation cost for MySAP ERP could be €200,000”, it does have smaller customers.
Spectrum runs SAP
Print management and logistics company, Spectrum Print Management, which implemented a MySAP ERP system, has 50 employees and a turnover of €10m. Managing director Ray Butler argues that by using SAP to run its operation, a small company can give business partners and potential customers “greater confidence in our capabilities, while at the same time helping us to improve our bottom line by speeding up and automating much of our business”.
Power said SAP’s reputation as a large complex system precedes it and the sales cycle can be pretty long. “Implementation can be somewhat painful but the return on investment is huge. A big advantage is scale – you’ll never outgrow it so you only have to do it once. Another thing is that a lot of a small company’s suppliers and customers in Ireland, where there are a huge number of multinationals and larger enterprises, use SAP.”
Justin Brading, sales director at long time SAP partner Chelford SAP Solutions, which focuses on the production and distribution of consumer products and wholesale and distribution, claims to have done about 30% of all implementations in the small business space in Ireland for MySAP ERP.
Chelford has its own template, but Brading stresses “it’s standard product, there’s no bespoke code. We preconfigure the product with a selection of functionality to suit small business. Our analogy is that it’s like buying Lego. But instead of buying a box of bricks to build a Lego ship, you’re buying a Lego ship kit”.
He claims a customer ‘has to be doing something strange for SAP not to meet the functionality requirements”.
Typically, customers will have a €30 million turnover and 100 staff as the entry point. But one client “is a €3 million turnover company and another has a €9 million turnover and 15 staff. It depends on the complexity of processes within the business”.
Brading argues there are several advantages in opting for SAP. “It has more breadth and depth than any other software. It has security because SAP will be here in 20 years time – and you won’t run out of road in terms of functionality. And SAP’s channel strategy is stronger. It hasn’t gone for thousands of resellers. It’s picked select partners that understand your industry”.
Summing up, Codd said, “The message is that SAP is affordable and you can get to the business benefits quicker.”
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