SAP Business ByDesign: Assessing the Services Opportunity

The SAP Business by Design (ByD) conversation is changing. At SAPPHIRE 2009, most of the questions involved ByD’s technical hurdles (the arduous journey to a true multi-tenant architecture) as well as limitations with the UI. But that changed this year. For those who are interested in the service opportunities in ByDesign, the shift in tone during “SAPPHIRE NOW 2010” was a welcome one.

Now that SAP is taking orders for Business ByDesign, with general availability of the “multi-tenant” version (2.5) targeted for July, the hot conversations are all about rollout. What will the ByDesign service ecosystem look like? To some degree, that question won’t be answered until the ByDesign SDK, based on Microsoft Visual Studio, is released late in 2010 as part of the version 2.6 feature pack. Business ByDesign’s in-memory analytics capabilities were another trending topic to watch.

As a SAPPHIRE Orlando attendee via SAP’s blogger relations program, I was able to attend two Business ByDesign events. One was a luncheon with presentations from customers and partners. The two partner stories were interesting, as they were coming at ByDesign sales and service from two different directions: one partner, itelligence was already a reseller of SAP’s All-in-One and Business One SME products. The other partner, Skyytek, was a SaaS-based reseller, built from the ground up on the economics of SaaS-based implementations.

On the last day, I also attended a blogger session with SAP’s Rainer Zinnow (Senior Vice President, SME Strategic Solution Management) and Jeff Stiles (Senior Vice President, SME Volume & Ecosystem Marketing) where the marketing and rollout strategy of Business ByDesign ended up dominating the conversation (see Dennis Howlett’s account of that meeting)

Note that in March, I published a piece on service opportunities across the SAP SME space for PAC. I won’t reiterate those points here, but I’ll add the following observations to the mix, which are solely my own:

1. SaaS consulting services are a different animal than on-premise. The challenge is to retain a personalized consulting feel despite the need to scale implementations for volume. Service partners with low overhead (e.g. virtual offices) and expertise in virtual consulting will have an advantage. During the By Design luncheon, Ray Tetlow of Skyytek said that his sales team rarely met with his buyers prior to software purchase – most deals were initiated and sealed entirely on the phone. How many on-premise SAP deals have ever been completed that way?

2. Business ByDesign consulting skills are different than the classic SAP consulting skill set. Steve Niesman of itelligence spoke during our lunch about how some consultants will be able to make the SaaS consulting transition, and some will not. My view is that those SAP functional consultants who focus on configuration techniques are the least suited for ByDesign consulting. The better fit? Those functional consultants who have a broader skill set, one that includes training/knowledge transfer, industry expertise, and those perpetually underrated “soft skills” such as walking potential clients through template selection.

3. Business ByDesign installs invoke a need for cultural change management skills. Many small businesses are not fully prepared for the tighter controls that By Design imposes on everything from managing inventory to cost accounting. I personally spoke with several ByD customers who told me that their employees did have to adjust to new levels of reporting accountability and more controlled processes. Consultants who can guide companies through these transitions will be at the high end of the ByDesign skills market.

4. On the technical side, Business ByDesign should spawn a need for ABAP/C# combo programmers, especially after the SDK is introduced late in 2010. It’s also important to watch the in-memory ByDesign capabilities that Hasso Plattner was showing off on the iPad. If the promise of these capabilities holds true, you can expect analytics (and the speed of analytical processing) to be a major selling point for Business ByDesign and a growth area for technical service providers.

Going into the conference, I was convinced that the emergence of Business ByDesign was going to be highly disruptive to both Business One (short-term) and All-in-One (near-term). Now I’m not so sure. While it’s simplistic to reduce each product to head count – especially with the introduction of a ten person ByDesign entry option – I’m starting to buy into SAP’s view that each product has a fairly distinct buying audience…for now. If Business ByDesign becomes even more robust in its functionality, I might change my tune again.

It's too early to put many eggs in the Business ByDesign consulting basket. Nor has SAP solved the ByD partner rollout questions. But given the strength of the product and the investment SAP is prepared to make in SME marketing, it’s time to take a closer look at what the ByDesign consulting opportunities might hold, and the “consulting economics” that will be necessary to seize them.