Becoming an ERP Platform
SAP Business One turned 20 last year. If it were a human, that would mean it was poised to enter the prime of its life. If it were a dog, it would be getting very long in the tooth, unable perhaps to learn new tricks. In software years, 20 is often thought of as mature, but equally as often viewed as ancient. Indeed some 20 year old enterprise resource planning (ERP) solutions are truly approaching “end of life.” Often referred to as “legacy” solutions, these are the ones that are still based on outdated technology, have changed very little over the last decade or more, and are still based on their original, outdated technology and architectures. Fortunately for the more than 55,000 customers running their businesses with SAP Business One, this ERP solution for small to mid-size businesses (SMBs) has come a very long way since it was first introduced.
But SAP believes it still has a long life ahead and is aggressively planning for the next 20 years. But, just as today’s solution bears very little resemblance to the original single-user system (running on a Mac), the SAP Business One of the future will look, feel and be something different than it is today. SAP Business One is becoming more than just ERP. It is becoming a business process platform. That means it will be open, extensible, and poised to meet very specific needs across many different verticals… and fully capable of being delivered through the cloud as a service.
Why a Platform?
Periodically pundits in the software industry try hard to kill off ERP, largely based on old perceptions. Let’s face it: Nobody recalls the early days of ERP as “the good old days.” Early ERP solutions were rigid and inflexible, hard to install and implement and even harder to use. Functionality was limited (and limiting) and implementations were not for the faint of heart. Horror stories of failed implementations costing millions of dollars were fairly common. For many, those perceptions live on.
Some solution providers jump on this bandwagon and try to reposition their solutions as something else without really changing what they actually do. Is SAP’s move a similar tactic? We think not. We believe it is an indication that the leadership of the SAP SMB team has a firm grasp of the needs of these smaller enterprises and is committed to satisfying those needs.
Over the years, SMBs in general have been turned off by ERP, thinking of it as a huge, disruptive and expensive undertaking. SAP in particular has suffered from these perceptions as a result of its penetration into large, multi-national enterprises. Overlooking the fact that SAP sells a completely different solution to SMBs, many mistakenly believe all ERP implementations to be overwhelmingly complex and overkill for their smaller operations. They fall into the trap of thinking they can get by without it. Or they think they need “something else.” In reality, based on the way Mint Jutras defines ERP, they not only need it, they need ERP and more. We believe this is the rationale behind SAP’s platform approach.
Some of the problems with the early versions of ERP resulted from software vendors trying to be all things to all businesses. With few exceptions, most early solution providers cast a wide net. Unwilling to turn any potential business away without a try, they came to market with very broad solutions. By trying to please everyone, they never had a complete solution for anyone. The 80-20 rule prevailed. Nobody expected a solution to satisfy all their needs (an 80% fit was often the goal), resulting in invasive (and sometimes expensive) customizations that built barriers to further innovation.
SAP seems to agree with our conclusion: All businesses need some flavor of ERP. But a “one size fits all” solution is not the most effective approach, because of the fact they also need “more”. But the “more” needed by a brewery is very different from the “more” needed by the company providing field services to the oil and gas industry, or the fitness club selling gym memberships. Even in food and beverage, the “more” needed by growers is very different than the “more” needed in the poultry industry.
And while brewers, growers, field service providers, fitness clubs and poultry providers all have similar needs in finance, accounting, booking and revenue and inventory management, they are not willing to spend a lot on these back office functions, preferring instead to invest in solutions that help them directly grow their businesses. These companies want to invest in a gym club solution, or a beer brewing solution, or a field service solution, not a generic ERP.
But wouldn’t it be nice if you could satisfy all your needs, including those basic functions, with the specialized solutions that help you directly drive your business? You can if those specialized solutions are built on top of a strong foundation – an ERP platform. That is the plan for SAP Business One.
SAP will continue to invest (and invest heavily) in the ongoing development of the generic core ERP, including new features and functions, as well as the user experience. It will modernize the user interface, including access from mobile devices, and embed analytical capabilities. But perhaps equally, if not more importantly, it will invest in the underlying architecture and technologies that enable partners to more easily enhance and extend the solution for the specific needs of different vertical, and in some cases even more specialized micro vertical industries.
Click here to read the full report on SAP’s plans and Mint Jutras’ analysis please click on the link below (no registration required).