Sanjeev Aggarwal's Blog

November 30, 2015

SAP Anywhere – Enabling SMBs to market, sell and commerce with an integrated front office solution

Filed under: Analytics, Blogs - Sanjeev Aggarwal, Business Applications, Commerce, SMB, SMB strategy — Tags: , , — sanjeevaggarwal @ 4:39 pm

The retail sector has a well-earned reputation as one of the most challenging industries for participants to navigate successfully. Retailers – be they traditional brick and mortar companies, online sellers or, often, a combination of the two – must manage complex supplier relationships and inventories while also catering to the sometimes mercurial wants and needs of their end customers. For retailers, “supply and demand” is more than a trite catchphrase. Rather, it encapsulates an ever-shifting and intricate relationship that demands real-time data, accurate forecasting and efficient operations if the retailer is to generate profits in a business characterized by razor-thin margins.

SAP_Anywhere

In short, retailers truly need a 360-degree view of their business, encompassing suppliers, consumers and the many processes that connect the two. With little room for error, retailers and etailers must not only track critical operational metrics closely, they must continually strive to make their processes more efficient and effective.

Retailers sit at the nexus between wholesalers and distributors on one side, and end buyers on the other. They must deal with product availability and pricing demands from their suppliers, while keeping their store offerings competitively priced and in line with current customer demands. As friction-free online shopping options proliferate, maintaining customer loyalty as well as profitability is proving increasingly elusive. Among the operational challenges retailers face:

Retail businesses encompass supply-side and demand-side

Supplier-side Challenges:

Product availability and pricing: All but the largest of retailers are at the mercy of their suppliers, who can set prices close to retail selling prices and whose products may not always align with changing customer demands.

Incoming inventory management: Retailers need to maintain inventory levels and mixtures aligned with the current and forecasted consumer preferences, which aren’t always the same as the suppliers’ preferences and product lines.

Buyer-side Challenges:

Outgoing inventory management: Retailers must have good visibility into inventory levels and purchasing trends to ensuring that inventories are stocked to meet both current and future demands, while limiting overstocking and forced discounting.

Customer satisfaction: In addition to ensuring that they have the right product selection and price points, retailers must work to engender customer loyalty while also increasing the number and value of products each customer buys.

Commerce operations: As higher percentages of retailers enter the online selling realm, they must deal with everything from cart abandonment rates to rapid and accurate processing of orders and shipments.

In addition to the above challenges, retail and distribution business today need to think globally. Digital commerce enables them to setup web-shops and transact beyond their geographic borders and becomes players in a global economy. This is where SAP Anywhere will benefit from being part of the larger SAP company. Most global businesses need more accurate multi-currency exchanges. Does the solution calculate financials in local currencies and support local tax compliance? What languages does it support?

Having a reputable cloud provider handle these and other critical business processes – as well as providing the platform for commerce sites in some instances – frees companies from performing these tasks, which are often outside of their areas of core competency.

 Target Market:

SAP Anywhere is targeted at companies with between 10 and 500 workers. Built from the ground up for the SMB market. It leverages SAP HANA to mine the data for real-time analytics and insights.

SAP Anywhere is a cloud-based solution, it will be delivered as SaaS (software as a service) by SAP in a public cloud (Amazon cloud for the US market). While it can be accessed through either mobile devices or desktops, SAP is emphasizing that it will allow SMBs to manage their business from anywhere using their mobile devices.

Perspective and Go-to-Market Channel Implications:

SMB spending on digital commerce solutions is increasing, especially for solutions that are simple and aimed at improving customer experience across mobile, social and web. This new category of front-office solution for small businesses will open new doors for SAP and will necessitate a new channel approach. In North America SAP plans to develop new channels where SAP has not gone before for SAP Anywhere and not restrict it to their existing Business One channel partners. There is also potential for affiliate partners like PayPal, eBay, Facebook, etc. Success with SAP Anywhere will also require partnerships with other type of affiliate solution providers, as part of an expanded ecosystem, that can help specialized SMBs setup sophisticated web-presence instead of the generic out-of-box experience.

 

October 31, 2012

SAP TechEd 2012: Implications for SMEs and the Partner Ecosystem

Filed under: Blogs - Sanjeev Aggarwal, Cloud Computing, ISV, Mobility, SaaS, Sanjeev Aggarwal Blog, SAP — Tags: , , , , — sanjeevaggarwal @ 12:10 pm

Sanjeev Aggarwal, Partner, SMB Group

During the week of October 15, I attended SAP TechEd 2012 in Las Vegas, along with about 6,500 SAP technology specialists and partners, and a small group of influencers. Although SAP is more widely renowned for its success in the large enterprise market, the small and medium enterprise or SME market (which SMB Group labels the small and medium business or SMB market) is a core part of SAP’s installed base and essential to SAP’s growth strategy. Roughly 80% of SAP’s more than 128,000 current customers are SMEs with less than 1,000 employees. In addition, SAP has more than 12,000 partners worldwide who provide SAP solutions and services to SME customers.

During this year’s TechEd, SAP discussed three areas that underscore SAP’s commitment to the SME market and its fundamental belief that strong growth opportunities lie ahead in this segment.

Taking HANA to the Cloud and to SMEs

  • HANA Cloud was by far the lead theme overall at 2012 TechEd. As Bill McDermott, co-CEO remarked, “HANA lies at the heart of the intellectual renewal going on at SAP.” HANA began life as an in-memory analytics engine, and quickly evolved into a database. Now, as SAP announced at the event, SAP is building the HANA Cloud as a next-generation platform for developers.

    SAP HANA AppServices and SAP HANA DatabaseServices are services that allow developers to create next-generation applications using native SAP HANA, Java and other rapid-development services. The good news is that SAP will now offer for free, developer licenses for SAP NetWeaver Cloud to get more support from the developer community. These shared services will build on SAP’s cloud platform vision by providing building blocks for portals, integration, mobile, analytics, collaboration and commercial services required to expedite building and life-cycle management of applications.

    SAP HANA One, a deployment of SAP HANA on the Amazon Web Services Cloud. HANA One currently supports a relatively small 64GB HANA instance on Amazon’s AWS cloud for $0.99 per hour. This will make it faster and easier and cheaper for developers to build affordable, HANA-enabled apps for SMEs.Although HANA Cloud is still a work in progress, HANA Cloud services and SAP HANA One are first steps to SAP realizing the HANA Cloud development platform vision. Significant work is required to move this from a development/testing proof-of-concept to a production platform where commercial applications can be deployed. SAP needs to develop a strategy to help developers move rapidly to commercial deployment and promotion, as Salesforce.com has done successfully with its Force.com platform and ecosystem.

  • SAP also announced that SAP Business One, version for SAP HANA, has been in limited release mode as of September 18, 2012, with general availability slated for some time next year.

    SAP Business One is SAP’s flagship ERP solution for SMEs with fewer than 100 employees. This HANA-powered version uses the HANA database and allows both the transactional (ERP) and analytical application to be run on the same server, and promises significant performance advantages. Running both ERP transactions and analytics on a single platform speeds access to information for analytics, reporting and search, without slowing down transactional processing.

    While not every SME will need to turbo-charge these functions, some SMEs are challenged with exponential data growth, and managing and extracting the insights they need from it. For instance in the health care industry, companies can integrate patient transactions with insurance company patient utilization records and hospital electronic medical records, to providing a complete real-time view to better manage patient care and costs. By crunching through more data more quickly, these businesses can more readily gain the insights they need to succeed in an increasingly complex and competitive world.
    Meanwhile, SMEs that don’t require the increased speed and power and analytics capabilities that HANA supplies can continue to buy SAP Business One based on Microsoft SQL database, which SAP offers as both an on-premises and cloud based solution.

Enabling Mobility for SMEs

With the acquisition of Sybase and Syclo (which SAP acquired in April’12), SAP is moving to help SMEs develop a mobile application and mobile management strategies. Sybase’s robust, market-proven Sybase Unwired Platform, is now augmented by the Syclo mobile application development platform to enable partners to rapidly develop, configure and deploy mobile apps for SME customers. SAP partners can also help SMEs to add mobile capabilities to their existing business applications, and/or help them develop custom mobile applications to address business requirements. SMB Group research studies indicate that many SMEs are planning to deploy internal mobile solutions in areas such as field service and CRM. In addition, they are planning to provide external mobile apps in areas such as payments, marketing and appointment and reservation scheduling to boost customer engagement and create new revenue opportunities.

Empowering the SME Partner Ecosystem

The partner ecosystem heavily influences SMEs’ business solution purchase decisions. Many of the partners I spoke with at the event provide consulting, implementation services and development for SAP’s SME-focused applications, including Business One, Business by Design, Business All-in-One, Business Objects Edge. Now SAP is helping these partners build skills in HANA and mobility to support new SME requirements.

Partners will play a vital role in helping SMEs customize application, analytics and reporting on the HANA platform or help startups develop new next generation application on SAP HANA Cloud. Likewise, on the mobility front, partners are essential to help SMEs develop a comprehensive mobility strategy that includes mobile access to business application and address the mobile management issues–including devices, access, security and mobile applications –in a unified way.

SAP is sparking renewed interest from and incremental opportunities for the SAP partner ecosystem. HANA Cloud, SAP Business One with analytics powered by HANA, and new mobility solutions will help SAP attract new partners and grow its partner ecosystem. Meanwhile, SAP’s laser focus on the mobility front will help it forge new partnerships with mobile solution developers that want to capitalize on the opportunity to provide mobile solutions via SAP’s Sybase Afaria platform. SAP is also opening up the SAP PartnerEdge program to help attract these new partners with educational tools, resources and training–as well as credentials to validate and certify partner skills for mobility and HANA.

In addition, the current SAP Mentors and partners that I met at TechEd were excited about the new opportunities that this will open up for them. For existing SAP partners, SAP’s new HANA and mobile solutions provides a pathway to incremental opportunities in their existing account, and an entrée to develop business in new ones.

Perspective

SAP is betting that these new technologies and solutions will give it an edge in the SME market. But for many SMEs, this is uncharted territory. SAP will need to make a hefty investment—particularly around HANA—to build awareness and understanding of the value that it brings to the table. Likewise, it must build on TechEd to ensure that it rolls out a steady, effective training program to help partners position, design, build, implement and support SAP solutions in these areas.

That said, as discussed in The Progressive SMB: Customer Stories are Worth 1,000 Analyst Words, SMB Group research indicates a distinct and growing segment of SMEs that we call “Progressive SMBs.” Despite economic uncertainties, Progressive SMBs plan to increase IT investments. They see IT as a tool for business transformation, and a way to create market advantage and level the playing field against bigger companies. Furthermore, Progressive SMBs have higher revenues expectations than their peers.

For instance, 50% of the small and 73% of the medium Progressive businesses (who are increasing technology spending) anticipate revenue gains in 2012, compared to just 15% of the small and 8% of medium businesses that plan to decrease IT spending.

The opportunity for SAP lies in growing the Progressive SME segment. After all, its unlikely that SME technology stragglers are going to become SAP customers. To accomplish this, SAP will need to make a significant investment outside of its installed base (as well as within) to educate SMEs about the increasingly dire consequences that technology laggards are likely to face, and the tremendous upside that they can gain by using IT solutions more strategically. Then, SAP must clearly connect the dots to demonstrate how SMEs can apply its new solutions to leapfrog competitors and grow their businesses.

If SAP can alert and educate a broader SME audience, then it can not only help narrow this gap, but also increase the market opportunity for its new solutions.

February 7, 2010

Mid-Market CPM Requirements and Vendor Selection Criteria

In today’s fast-paced and volatile business climate, midsize businesses need a clear vision, financial agility, and strong collaborative capabilities to drive better-informed and more strategic business decisions. Mergers, acquisitions, new business models, and increasing regulatory requirements heighten the importance of having accurate, flexible tools to support corporate forecasting, budgeting, reporting, scorecard and compliance functions.

Many midsize companies currently use Microsoft Excel spreadsheets, email, shared folders, and other ad hoc tools for these tasks, but they are finding significant shortcomings with this approach. As a result, more businesses are evaluating CPM solutions as a way to get these jobs done faster, more efficiently, and more accurately.

However, while their financial and planning operations may be very complex, midsize companies are often constrained in terms of their budget, IT resources, and support. In addition to evaluating the features of different CPM solutions and how these solutions stack up in terms of meeting their functional requirements, decision makers need to consider several additional factors. Based on our recent in-depth discussions with several mid-market CFOs and CIOs that have evaluated, selected, and implemented CPM solutions in the last couple of years, here are our suggestions as to the key questions that midsize firms need to answer when evaluating CPM solutions:

  • How quickly and easily can business users learn to use the solution? Easy to use solutions lead to faster, more widespread user adoption. Ideally, CPM solutions should have an interface with a familiar spreadsheet look and feel. You should be able to easily configure the interface and dashboards without help from IT or external consultants, and building models should be intuitive. In a midsize firm, you don’t want to have to rely on or wait for an IT department that’s probably stretched to thin to create and run reports. When users can easily create and run reports themselves, they get the key performance indicators (KPIs) and other information they need more quickly, speeding up and enhancing the decision-making process.
  • What is the total cost of ownership (TCO) for the CPM solution? CPM solutions need to be affordable. They must take into account not only software costs but also any resources that you will need to design, implement, configure and manage these solutions (including annual maintenance fees), as well as the hardware you’ll need to run them on. You must also consider if you’d be better off with a subscription-based service that you can pay for monthly or annually without incurring any upfront capital costs. Many midmarket buyers are considering software-as-a-service (SaaS) or cloud-based CPM solutions that offer subscription-based pricing and eliminate the need for upfront capital investments. SaaS CPM makes it easy for companies to start small and expand use as their needs grow. Since SaaS CPM solutions are delivered over the Web, they don’t require on-premise infrastructure, or internal IT support or maintenance. As a result, you can deploy them more quickly and dramatically reduce TCO.
  • Is the vendor’s pricing transparent? No one wants to start evaluating solutions and then get sticker shock because of hidden costs. Look for vendors that provide transparent pricing on their Websites, or at least, vendors that will give you a good ballpark estimate early on it the evaluation process.
  • Do you want a focused, purpose-built CPM solution, or CPM as part of a broader business intelligence solution? Solutions designed specifically for corporate performance management (such as Adaptive Planning, Clarity, Prophix. Longview and others) are typically more cost-effective and fast to deploy than broader business intelligence suites, which often include a CPM component. However, broad based BI solutions, such as IBM Cognos and SAP Business Objects, are beginning to carve out CPM specific modules and offerings that integrate with the broader suite. Consider what your short and long term requirements in deciding which route will best serve your firm’s needs.
  • Can you try before you buy? Solutions that are easy to evaluate lower your risk—both from a time and monetary perspective. Can you get a true feel for the solution, with a functional trial version? If the finance department can try the solution with real data and see the results, it can speed the vendor selection and decision-making timeframe significantly.
  • How long will it take to implement the solution? Most mid-market enterprises do not have months to spend deploying and getting productive with CPM. Talk to customers already using the solutions you are considering to get an accurate, realistic picture of how long it will take.
  • How well does the solution meet your data security requirements? Security is a top concern for all companies, and in some industries, regulatory requirements also come into play when considering a CPM solution. In some cases, specific compliance constraints require companies to deploy on-premise solutions. However, in many cases, a quality SaaS provider can provide better, more secure and more reliable operations than an internal IT department. Ideally, look for a vendor that is SAS-70 compliant and can readily document the physical and virtual security measures that they use to safeguard your data.

The good news is that today, more CPM solutions are available that are specifically designed to meet mid-market requirements than in the recent past (from companies like Clarity Systems, Prophix, Adaptive Planning, Host Analytics, Longview and from BI companies like SAP BusinessObjects, IBM Cognos, etc.). By carefully assessing the questions above and focusing on the criteria and features most important to your business, you will almost certainly find a CPM solution that can give you a much more connected, productive planning process than could be achieved with Excel spreadsheets.

January 28, 2010

Mid-Market companies benefit from the significantly better ROI offered by the synergistic relationship between ERP and BI

Strong value in considering/purchasing ERP plus BI simultaneously/at the beginning of the implementation cycle

ERP solutions come with a reporting toolset consisting of a predefined set of reports and with general purpose query tools to generate reports from data within ERP database. Most often, these tools are difficult and confusing to use and rely on an IT team to deliver the requested report, which can take time. ERP systems provide acceptable reports on day-to-day operations but if business requirements change, these static ERP reports need to be customized. Business users need on-demand reports, which are cumbersome and expensive to deliver in a timely manner. By using BI reporting solutions, these systems empower the business user to define and generate the needed reports, freeing valuable IT (or consultant) resources in the process, such that data and time can be better exploited to make meaningful business decisions.

I have been talking to several mid-market companies that have implemented ERP solutions followed by a business intelligence solution (initially deployed for reporting from the data in the ERP solution). Their recommendation, based on their experience of deploying both solutions, is that mid-market enterprises should consider utilizing ERP and BI together (possibly through a planned phased implementation approach), a strategy that would realize significantly higher ROI versus the alternative of considering each independently of the other.

The crux of this recommendation comes from closely looking at the customizations required to make the ERP solution useful for these companies. A significant number of customizations needed in ERP systems are related to generating reports to provide detailed information (in part, similar to that previously obtained through their formerly implemented legacy systems) for decision-making and presenting it in a useful and easy-to-understand manner—a daunting and expensive proposition. Complementing a BI solution with an ERP solution makes the generation of reports required by corporate management and various lines-of-business very easy and eliminates the need for any extensive customizations (as was required to generate these in an exclusively ERP system). The right business intelligence solutions can help extract significant value from the extensive data repositories in an ERP solution. The combination of ERP and BI should also bode well for mid-market companies in the current difficult economic environment, as companies strive for maximum efficiency by looking to cut costs and realize projects that provide them with short-term returns. The companies that have already implemented ERP could benefit by focusing on BI solutions for reporting, corporate performance management and consolidation (CPM) and strategy planning.

Mid-market customers using SAP Business-All-in-One as their key ERP solution have said that the extra time, effort, and money spent to customize their initial ERP could have gone towards paying for a BI solution (in several of the cases they were using SAP BusinessObjects Edge BI). Additionally, the reports they now get from their SAP BusinessObjects solutions (after integration) are more detailed and accurate than before. Other added benefits of this integrated solution—including savings on maintenance, IT administration time, integration and consulting support for upgrades, etc—largely result from the fact that SAP has already spent the time and effort to tightly integrate these two solutions providing better workflow and departmental self-service capabilities to develop and customize reports for their needs. With this solution, individual users can also more easily drill down from these reports to get deeper context to explain the factors influencing what is shown in reports beyond the visually attractive graphs and tables.

As a result, this combined SAP Business-All-in-One and SAP BusinessObjects Edge BI solution could provide significantly better Return on Investment (ROI) than each solution considered independently, and if the SAP BusinessObjects Edge BI can be paid for by reducing the customizations required in SAP Business-All-in-One, the combined solution also has a much lower total cost of ownership (TCO). With the mid-market focused Business All-in-One fast-start program from SAP coupled with the SAP best practices for the SAP BusinessObjects Edge BI for reporting and CPM solution, mid-market enterprises will be able to benefit from fast deployment, more productive and streamlined solution.

November 8, 2009

Increasing interest for Corporate Performance Management (CPM) in Mid-Market Enterprises

In today’s world overloaded with buzzwords, terms such as “Business Intelligence (BI)”, “predictive analytics” and “Corporate Performance Management (CPM)” are confusing to mid-market enterprises.

BI technologies provide historical views of a company’s business operation. Some of the enterprise –class BI solutions now include predictive analytical capabilities also. BI is a term used to describe the technology used to access, analyze and report on data relevant to an enterprise. It includes ad-hoc query, reporting, on-line analytical processing (OLAP), dashboards, scorecards, search, visualization, etc. Initially, most BI vendors lacked the ability to build models that can project in the future. However, in the past 3-4 years, the enterprise-class BI vendors have added some of these capabilities to replicate functionality offered by CPM vendors. BI and CPM are complementary solutions, and the BI platform provides a natural-basis to build a CPM solution. BI solutions are usually very complex and expensive for most mid-market companies. However, some of the more focused and template/wizards driven “Express” or “Fast-start” solutions, which are more affordable (especially if they are available in a online or appliance) and can be implemented in a reasonable amount of time – are becoming interesting for the mid-market if the vendors can show measurable benefits and short-term ROI.

In the CPM world, “predictive analytics” is generally used to refer to software solutions that automate and manage process related to corporate performance – financial forecasts, budgets, financial strategies, financial consolidation, scorecarding, and reporting. Another term used to identify CMP is BPM (Business Performance Management but this is sometimes confused with Business Process Management – two very different areas). Some CPM solutions regularly monitor some key performance indicators (KPI) in terms of actual vs. budget and, whenever a significant discrepancy is identified, help perform root causes to identify sources that could be causing this.

The BI and CPM solutions do not need to come from the same solution provider, as the two technologies are complementary and could co-exist. However, there may be economies and synergies related to getting them from the same vendor (if offered). In some instances, mid-market ERP solution vendors are now developing deeper integration to some CPM solutions (like NetSuite with Adaptive Planning).

In the current tough economic conditions, this segment is under tremendous pressures to improve financial processes, measurements and management of the mid-market enterprises. To adress the above, mid-market businesses are increasingly deploying CPM solutions to improve planning (forecasts and budgets), manage costs/optimize profits and more importantly risk and compliance.

The following companies provide enterprise and mid-market CPM solutions:

Increasing interest and deployment of these solutions by mid-market enterprises is demonstrated by the double-digit growth rates most of these mid-market solution companies are experiencing. The CPM applications are targeted at the mid-market company CFOs, C-level executives, finance team and corporate strategy teams.

How were majority of these mid-market companies addressing the financial planning issues until now? Majority of these companies are using Excel spreadsheets. Using Excel, has significant accuracy limitations and  the amount of time spend on the planning process. It also denies the organization a collaborative, connected and productive planning process. Mid-market organizations need to take a more objective view to replace Excel based planning and replace them with CMP solutions. Some basic analysis on time (and accuracy achieved) spent on Excel planning and the results achieved will quickly show the benefits and ROI that can be achieved by CPM solutions – these can be split into the “hard” benefits quantifiable by replacing Excel and the many potential “soft” benefits derived from using a CPM solution.

July 31, 2009

Prognosis on SAP’s Business ByDesign – SaaS based ERP solution for the core mid-market

I came across a good analysis on some aspects of SaaS vs. on-premise vendors and solutions in the smoothspan post Why Do SaaS Companies Lose Money Hand Over Fist?

After reading through the post and various responses, I have some comments that could shed more light on the SaaS vs. on-premise topic and how this relates to SAP’s continued focus on Business ByDesign.

  • The global ERP market opportunity driven by the large number of SMB/mid-market companies. In the U.S. there are 11 times more mid-market companies and on a worldwide basis the number is 13.5X.

     

    # of U.S. Companies

    # of Worldwide companies

    Enterprises (1000+ empl.)

    9,000

    52,000

    Mid-Market (100-1000 empl.)

    100,000

    700,000

    Ratio – Mid-market/Enterprise

    11X

    13.5X

     

     

  • The enterprise market is heavily penetrated by ERP type solutions, mostly on-premise solutions. The U.S. mid-market has less than 42% ERP penetration. This penetration of ERP solutions is much lower outside the U.S. Existing SaaS solution vendors until now have primarily focused on the U.S. market, with less than 15-20% international sales (other than Salesforce.com). SAP being a global company, has the potential of ramping up fast in the international markets which is very under penetrated, where SAP already has established relationships and market presence (significantly more than any of the SaaS vendors). This presents a significant upside revenue opportunity for SAP in the mid-market (especially in the 100-500 employee segment which is outside of the sweet spot of other SAP midmarket solutions – BusinessOne and Business All-in-One).
  • One also needs to look at the Total Cost of Ownership (TCO) of SaaS vs. on-premise solutions. A recent paper investigated details on this, The TCO of Cloud Computing in the SMB and Mid–Market Enterprises; A total cost of ownership comparison of cloud and on–premise business applications. Thee general conclusions are:
    • Considering a 4 year TCO, works in favor of the SaaS ERP solutions when the number of users is less than 400 users. Beyond these numbers of users, the on-premise TCO starts to become better (lower). These would be mostly enterprise companies, who favor on-premise solutions.
    • When considers a TCO beyond 4 years, on-premise solutions are better (lower). Again, these tend to be larger companies.
  • Most of the SaaS vendors like Salesforce.com and NetSuite have a much higher sales and marketing expenses ratio (~ 54% of revenue as shown in the smoothspan post Why Do SaaS Companies Lose Money Hand Over Fist?) primarily driven by their direct sales model. For Business ByDesign, for which SAP is promoting a channel driven model, this percentage should be lower.
  • R&D spending of 16% by SaaS companies – the strategy that needs to be explored by vendors looking to develop SaaS products, they need to seriously consider SaaS platforms like force.com (from Salesforce.com) and QuickBase (from Intuit). The developers that have used these platforms, have significantly reduced both their initial R&D spending and also their product development timeframe, brining SaaS solutions to market in some cases 1-2 years sooner. These SaaS/cloud platforms-as-a-service were not available when SAP embarked on development of ByD (or would they have used one, even if it was available…I am sure they have developed a significant internal expertise with this development experience). It is prudent for SAP to control the roll-out of Business-ByDesign until the product, delivery and channel kinks have been worked out. Prediction – Past experience with German engineering should alert the ERP market that in 2010, SAP will probably deliver a successful mid-market SaaS ERP solution for the core mid-market.

Reviewing the above, including good reviews from the current customers of Business ByDesign, it would be prudent for SAP not to scale back efforts on the roll-out of Business ByDesign – as strategy they have consistently communicating to the market.

July 9, 2009

Business Intelligence (BI) – Does it have a place in the SMB and Mid-Market Enterprises?

The recent demise of LucidEra has brought forward the discussion of the need for BI in the SMB and Mid-Market enterprises (companies with 1-999 employees and revenues usually less than $1 billion). My take is that this was based on the limited BI value LuidEra offered and the current difficult economic conditions vs. their SaaS based business model. With the explosion of BI solution targeted at the SMB & mid-market, the BI industry is inundated with newer solutions and scaled-down versions of existing enterprise solution targeted at this segment. I have also seen several discussions on the potential increase in adoption of BI solution based on these solutions being delivered in a SaaS model to address the IT resources and infrastructure in the SMB and mid-market companies.

Business Intelligence is all about gaining 360 degree insight into a company’s business, and helping company executive make decisions based on the facts as opposed to information in Excel spreadsheets or gut feel. Business intelligence can offer significant benefits to small and mid-sized organizations. The problem becomes sifting through the plethora of solutions to select offerings that meet the SMB’s needs. SMBs don’t have the required resources or time to do this.

The key question that needs to be addressed is – what are the BI related need of the SMB and mid-market companies and weather these needs are being met by these BI solutions? The solution delivery model is secondary to the key question. This segment of companies is realizing that business decisions need to be made on more than excel spreadsheets and gut instinct.

SMBs don’t understand data warehouses and BI, as it is applied to large enterprises as they do not have staff that can make sense out of the reporting provided by these standalone BI tools nor do they have IT resources/budgets to integrate standalone BI applications to data from various business applications and business processes. SMBs understand BI in the form of dashboards and reports with drill down capabilities. They need solutions that can provide quick real-time insights and ROI that can have measurable business results. How can the use information from the past to more accurately predict the future or to look at real-time data to more efficiently utilize the existing resources or inventory; make changes to enhance business process or operational efficiencies?

In my recent interaction with business solution vendors that focus on the SMB and mid-market, BI solutions are now available and embedded as part of a larger business solution – integrated business solution like NetSuite; SAP (based on Business Objects acquisition) – Businessone, Business-by-Design, Business All-in-One; Oracle Business Intelligence Standard Edition; other ERP and CRM solutions (Salesforce.com) .

SMB and mid-market companies need to first investigate the BI capabilities that are already provided by these applications or modules that are already integrated and can be easily add-on to their business application solutions. It does not matter whether these solutions are cloud-based (SaaS), hosted or on-premise; utilizing these exiting BI functionality will provide much easier implementation and ROI compared to bringing in new vendors. Most of the vendors mentioned provide easy to use dashboards with BI analytics capabilities to enhance operational efficiencies, analytical and predictive analysis, risk analysis, forecasting, etc. Business application vendors need to increase their focus on their BI solutions as a key value proposition to the SMB and mid-market.


 

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