Having recently posted updates on both SAP Business ByDesign and SAP Business All-in-One, I felt it only fair to also weigh in on the “other” SAP Enterprise Resource Planning (ERP) solution for small to mid-size enterprises (SME) – SAP Business One. With almost 30,000 Business One customers, it enjoys a larger installed base than most all other ERP solutions vying for the attention of small businesses. Besides having featured it prominently on the main stage at SAPPHIRE NOW 2011, what has SAP been up to in terms of delivering innovation and what plans does it have for the future?
For those of you not familiar with the product line, SAP Business One is sold exclusively by over 1,100 partners in 40 countries around the world and is available in 25 languages. A Business One customer typically has fewer than 100 employees. Designed for small companies, Business One is an integrated suite including:
- Financial management
- Sales and order management, including the ability to support eCommerce through an on-line web store
- Warehouse and production management
- Customer relationship and service management
- Reporting –using SAP Business One with SAP Crystal solutions
It is extendable with a Software Developer’s Kit (SDK) and indeed there are over 450 partner solutions, including some that are industry-specific. SAP also leaves more specialized functionality, such as Human Capital Management for example, to its partners.
While employee headcount is an important qualifier, it is not the only qualifier. Several years back I remember speaking with Mike Cornell, EVP of Bamboo Pipeline and a Business One customer. When I first met Mike in 2007, he had recently completed his initial implementation. His company had been a candidate for a new ERP because its existing solution couldn’t handle the growing velocity of transactions that accompanied the fast growth of its early years. Bamboo Pipeline’s revenues had doubled on average every two years, making it one of the fastest growing suppliers of landscape materials in the USA. But Mike made a comment back then that stuck with me. He said something along the lines of, “When we hire employee number 101, I have no intention of ripping Business One out and implementing something else.” He was obviously in it for the long haul and would not have selected Business One had he not been confident that it would scale with him.
I recently caught back up with Mike for an update. Being in the landscape design business, selling directly to building contractors, Bamboo Pipeline was impacted by the housing bust that followed the financial crisis in 2008. At that point the role of ERP changed. Instead of fueling growth, it instead became a shock absorber. Bamboo Pipeline preserved revenues throughout the downturn in the economy but improved margins each year. According to Mike, “We were in the midst of trying to manage change and a decline in revenue. However, because our technology platform [Business One] was configurable and adaptable, we were able to very quickly add a whole new line of business. While in the past we had simply sold to landscapers, our new Plants Express business (www.plantsexpress.com) allows us to sell direct to consumers through a partnership with Home Depot. We started with an eight store pilot and now we are in 130 stores and will be in 170 by the fall of 2011. This went from 0% to 30% of our business and we launched it with $0 investment in technology and one new employee. If we had needed to buy new technology we probably would not have been able to do it. Nobody was lending money. Having it in place allowed us to launch this new side of the business. It removed labor capacity as an obstacle and provided efficiency for bottom line survival.”
So beyond making the businesses of its customers more sustainable, what has the Business One team been up to? Like most of SAP’s products, it has been the beneficiary of new developments in Business Analytics, mobility and in-memory computing, and like the rest of the “new” SAP, has gotten much closer to its customers.
Reporting and Business Intelligence
Visibility into the business is one of the primary goals of any ERP solution and yet even today many companies, large and small, are still making decisions based on gut feel. Executives need to know their businesses better in order to make decisions and act boldly. One seemingly small, but deceptively important feature of Business One is a key here. That is its drill-down capability. To the left of any field on the screen you will see a little arrow. Want to know more? Just click on the little arrow and it will drill down to more detail. And you can keep drilling further and further. For super users that understand all the structure and relationships within the data and the application, this might seem like a nice little shortcut that keeps them from traversing a hierarchical menu and data structure. But for an executive that doesn’t have the time, patience or inclination to understand all those structures, it is the key to the kingdom. And that key unlocks a wealth of knowledge right at the touch of a button.
Then of course there is reporting. The reporting mechanisms of ERP represent a key factor in decision-making and Business One relies primarily on the SAP Crystal Reports software for this visibility. There are Crystal Reports that come as standard fare within SAP Business One, pulling live data from all different parts of the solution, from accounting to sales to production and inventory. And SAP will continue to add more and more of these standard reports. However, I think the bigger value proposition will come from the release of SAP BusinessObjects Edge BI 4.0 for the SAP SME products (including Business One.) Adding the SAP Crystal Dashboard Design (formerly Xcelsius) is where the real added value lies, allowing you to create your own views and combine data from both SAP and non-SAP sources.
In SAP Business All-in-One (BAiO) Living Up to Its Name I wrote, “But perhaps where the BAiO user is likely to see the biggest change is in the experience of working with the product. You really have to see this to get the full effect because describing the new user interface as a portal or a mash-up really doesn’t do it justice.” The same kind of experience is available with Business One. Picture a screen that combines frequently used transactions or inquiries from your enterprise application (ERP or CRM), along with a Google-like search, maybe Microsoft Outlook and a few charts of key performance indicators. Maybe other widgets or Microsoft Office components would be added? It would be tailored by role, customizable by individual preference. It would be the equivalent of setting up a home base of operations from which a business user could comfortably operate all day long.
Unfortunately the typical Business One demo doesn’t show this off to its full extent. I can understand why. You don’t get this same experience without some add-on’s to the basic Business One. So I can see that the pre-sales folks don’t want to oversell the ERP product, particularly in selling to small companies that are typically very budget-constrained. And yet, for an incremental added cost, the additional value can be exponential, truly bringing the user experience to life.
But decision makers aren’t just sitting in an office, at a laptop or desktop all day long. They are increasingly mobile and are far more likely today to stay relatively connected at all hours of the day and night. We hear lots these days about connecting to enterprise data through a mobile device. And there certainly are plenty of those mobile devices around. The mobile access Business One delivers today is largely for the purpose of securing approvals. Indeed my own research has found that approvals, authorizations, notifications and alerts are the top priorities of those using mobile devices today. So this really takes a “push” approach – pushing alerts to the mobile device in order to obtain approvals. The action to be taken might be a phone call or email in response, but it also might be a simple click.
SAP sees mobile access as more of a push and pull in the future, allowing decision makers on the run to pull data on demand, rather than waiting for it to be selectively pushed to them.
In Memory Computing
If you have attended any SAP event, or even engaged in a sales presentation over the past 12 to 18 months, you’ve no doubt heard of “in-memory computing.” In the upcoming year, SAP plans to revamp existing SAP solutions with the power of in-memory computing and to release completely new applications such as Sales and Operations Planning, Trade Promotion Management, Smart Meter Analytics, Intelligent Payment Broker, cash and liquidity forecasting. SAP already has Business One running on the SAP High-Performance Analytics Appliance (HANA) in its labs. In memory computing usually equates to “big data” and big data is generally associated with large enterprises. So why is this significant? There are two scenarios at play here.
First of all, while we don’t ordinarily think of small companies as generating the massive volumes of data associated with in-memory computing, organizations of any size must deal with a proliferation of data. And while transaction volumes in small companies can’t compare to those in large multi-billion dollar multi-nationals, it’s not just business transactions that generate data. There is a plethora of other data ranging from quality and characteristic data collected on a plant floor, to consumer preferences that influence buying decisions of a retailer to smart meter readings in managing energy consumption and promoting sustainability. And then of course there are the massive volumes of data being amassed in social media outlets such as Facebook, Twitter and blogs. Even small companies cannot hide from the influence of the masses today.
Secondly, sometimes those large enterprises are indeed comprised of business units, subsidiaries and divisions that run individually as small companies that interoperate as an integrated business network. Not only must the business unit handle its own data, but that of its sister divisions. And ultimately the parent company must make decisions by consolidating and analyzing data from a vast number of sources. But individual business units can also benefit from having this facility with managing and analyzing massive volumes of data at the speed of their business.
Business executives don’t know or care about advances in data compression, columnar data store, and in-memory computing technology, but they do care about the speed and power the next generation of enterprise data management can bring to decision making. Whether the goal is to dramatically improve data-intensive processes such as planning, forecasting, and pricing optimization or to analyze sales profitability or manage cash and liquidity, once this power is in the executives hands, it will be difficult, if not impossible, for them to go back to “business decisions as usual.”
While SAP is well known in the world of the large enterprise, a fairly well-kept secret is that 75% of all of SAP’s business is sold to SMEs. SAP Business One continues to play an important role in providing a solution to the low end of the SME market. The reporting and Business Intelligence strategy will continue to be important, as will mobility, bringing enterprise data to the mobile device in a very easy and consumable fashion. SAP also will continue to build out the Business Network Integration story in multi-entity corporations that operate much like a network of small to mid-size companies. And finally, the 2011 and 2012 timeframe will see more concentration on reaping the benefits from SAP’s in-memory computing technologies.