Does SAP Have What It Takes To Win SME Business?

I was invited to attend the SAP EMEA SME Customer Panel event in London yesterday with the theme “Clarity in Business”, for the second year running. The customer panel consisted of representatives from the following small and mid-market businesses:

• Dishman (Netherlands): SAP All-in-One with SAP ERP baseline (incl. BI)
• Kompak (Netherlands): SAP Business One and industry add-ons
• Consol (South Africa): SAP BusinessObjects Explorer (accelerated version)
• University of Greenwich (UK): SAP BusinessObjects
• NAG (UK): SAP Business ByDesign
• Shoosmiths (UK): SAP ERP, SAP Professional Services and Legal Management Solution (LMS)
• TMG Telecom (UK): SAP Business ByDesign

These customers largely selected SAP based on its established brand and reputation. Reliability, ease of use, functionality and a strong eco-system to achieve industry-specific enhancements were key factors that favoured SAP’s selection over competitor products such as Sage, Navision, Unit4Agresso and NetSuite. Pre-configured solutions under the “Fast Start” and “Start & Go” programmes has further encouraged uptake of SME solutions as they offer more affordable prices and a fast implementation time.

The ease of use was demonstrated in the demos of BusinessOne, BusinessObjects Explorer and Business ByDesign. I was pleasantly surprised to find that SAP Business ByDesign was in fact quite easy to use as were the other solutions, supported by good navigation and a simple UI. The issue beyond SAP’s control that can impact the performance of the on-demand solution are the bandwidth and browser settings. However, SAP Business ByDesign allows an end-user to check its settings through a “Desktop Check Tool”, which will prove to be helpful.

SAP continues to build on its ecosystem, with increasing focus given to encouraging and supporting some of its larger and stronger VaRs to develop their own network of SAP services partners to fill geographical or expertise gaps under the SAP Extended Business program. This two-tier model will enable these partners to expand their own business as well as allowing SAP to indirectly reach out to more businesses.

The main challenge presented to the SMEs is change management issues, as many of the organisations face resistance from ‘heavy users’ of the system(s) to be replaced. It is highly recommended for organisations to get users to buy-in early on as possible and to provide a lot of training to increase familiarity and to communicate the benefits.

While SAP faces some significant challenges with a move to an unfamiliar SaaS territory and being forced to operating in tough market conditions, the vendor has a lot of potential in the SME space, proving that they have what it takes to win market share against competition. However, SAP is still along way to go particularly with its Business ByDesign solution. The player has recognised the need to build up its customer base to not only strengthen its references but to also achieve volume to become more profitable. SAP continues to face challenges around the TCO of its Business ByDesign solution. Having launched the Feature Pack 2.0 in July 2009, the next Feature Pack is due to be released in mid-2010, by when SAP hopes to cut the total cost of ownership and enhance agility of the solution.