SAP, Europe’s largest software vendor is ramping up its solutions and marketing strategy to boost its SMB market share. Although SAP claims that 80% of its customers are SMBs (largely due to Business One and the Concur/SuccessFactors acquisitions) it is viewed as a company selling large & complex enterprise applications. Some of us who have been in the IT industry long enough remember heated debates in many business board rooms - “Fire the CEO, CFO or SAP?” - nobody dared to fire SAP. To change that perception SAP has been shaping its SMB lens for a while. In a discussion, almost on cue and pre-empting any question on the topic, EJ Jackson, EVP & GM, SAP Anywhere, said, “SAP Anywhere is a solution focused solely on the SMB space. I know whenever one hears the term SME and the words SAP; many shrug their shoulders or sigh a little because historically SAP has thought of companies with two or three thousand employees as a small company. In the case of SAP Anywhere we are actually looking at companies under 1,000 employees, truly in the 500 and under range where SAP Anywhere is focused at this point in time”.
SAP Anywhere – purpose-built for SMBs
SAP recently launched its SAP Anywhere solution for SMBs. It is a purpose-built unified front office application that combines sales, inventory management, order processing, commerce, marketing programs, mobile point-of-sale, customer support & engagement capabilities in one complete solution enabling multi-channel commerce with a multi-channel marketing platform. It is intended to be a mobile first/digital first solution with a high degree of focus on ensuring that it is low touch, quickly deployable (can be deployed within 40 hours) and easily extensible.
Toby Davidson, VP of SAP's SMB Solutions Group, reinforces the point that SAP Anywhere is purpose-built for SMBs, “…it has been built from the ground up specifically for the SMB market segment. We're not taking a large enterprise application and scaling it down to serve functionalities to the small business. That often doesn't work. What we have done is we have built the application from the ground up specifically for the small and medium business, the sub-500 space in mind for the functionality that's being delivered.”
Let us step back for a minute to understand when SAP’s clear and present focus on SMB began. In July 2014, SAP launched SMB Solutions Group, a division focused entirely on the needs of its SMB customers. The aim of this structuring was to address the technology demands of smaller companies, expand SAP’s own business opportunities as it built momentum into the SMB space. Since then the group has been re-formulating SAP’s SMB strategy and building simplified, integrated business applications powered by SAP HANA delivered via the cloud - squarely aimed at solving SMB business challenges.
Prior to SAP Anywhere, SAP’s SMB offerings included:
SAP SMB strategy – loyal customers make it worthwhile
SAP’s strategy for selling applications to the SMB market segment has at best been ambiguous in recent years. Though its products are well designed, the problem has been with their positioning in the market. Its flagship SMB solution, SAP Business One had limited success with SMBs. However, Techaisle’s many discussions with SMBs and midmarket firms in different countries reveals that there are many die-hard SAP Business One users. As one CIO of a 175 person pharmaceutical company in India said, “SAP Business One enables a single integrated visibility to the senior management for effectively running the business operations. Moreover, it consolidates business operations of multiple subsidiaries and offices across country-wide network. SAP has also improved its quality of solution - now we can manage everyday inventory, enable faster sales and purchase processes, perform analysis for business growth, and provide better customer relationship and support”.
Business ByDesign (focused on midmarket) faced many hurdles in being pitched to SMB clients creating a cloudy product perception. Business ByDesign was initially a solution meant to be sold directly aimed at large enterprises. It was later pivoted to sell indirectly, through channel partners as an SMB solution and then about-turned to target subsidiaries of large enterprises. As the IT director of a midsize manufacturing company in the US told Techaisle, “for our organization we chose the solution because it is used for small to mid-sized businesses and since we are a midsized company it was in our best interest to go with this solution”.
As of now SAP Anywhere is limited to the China market (being rolled out province by province) as it “wants to knock it out of the market in China first” before introducing the solution in US & UK. SAP is betting on its joint venture with China Telecom to penetrate the SMB market through China Telecom’s wide distribution network and the 50,000 online sellers that it supports. It is expected that SAP will use the learnings from its China experience in marketing & implementation of the solution before wider geographical release.
Additive to Business ByDesign and Business One
As a software-as-a-service offering, SAP Anywhere runs in a public cloud and can be accessed remotely through mobile devices (iOS and Android) and desktops. It is powered by SAP’s HANA database with Java as the primary development language. SAP has positioned SAP Anywhere as an extension to its Business One and ByDesign suite. However, compared to ByDesign, SAP Anywhere targets only SMBs, whereas ByDesign is meant for upper midmarket businesses that need ERP applications with deep financial, back-office & project management functionalities. SAP does plan to cross-sell ByDesign customers (E-tailers) with SAP Anywhere.
While there is crossover in some functionality with Business One, SAP Anywhere is targeted at a different part of the SMB business, specifically those users who sit in front of accounting, fulfillment, sales and marketing. It is being very carefully positioned as an additive so that both SAP Anywhere and SAP Business One can sit together to strengthen SAP’s market position in the SMB market segment. It is important to note that SAP Anywhere is not intended to integrate with Business One, though there are some Business One SMB customers who are launching a pilot to integrate the two. In contrast Business ByDesign has a different level of functionality such as project management, professional services and accounting is in the background.
SAP Anywhere relevance for the digital multi-channel SMB
One of the most fascinating aspects of cloud’s burgeoning dominance of the IT outlook in SMBs is the way that it enables business management to clearly connect technology to business priorities. Cloud provides a compelling response to a wide range of SMB business issues. Techaisle SMB & midmarket cloud adoption trends study shows that the importance of cloud-based workloads is more prominent within the small and midmarket business communities than enterprises. Keeping aside the cloud-based infrastructure investments, SMB respondents report that they are currently most likely to be using customer service or business or financial operations SaaS-based solutions. And this is the market that SAP is targeting. Technology is more important today than ever for SMBs. As Techaisle data indicates, more than 75% of small businesses and nearly 100% of midmarket businesses believe that technology is “very important” or “somewhat important” to business success – and the trend is towards greater rather than lesser reliance on IT.
Building and deploying multi-channel, multi-customer e-commerce solutions is not a simple undertaking for SMBs. And targeting both business customers and consumers is even more challenging especially for small companies as it increases overall business, operational & marketing complexity when focusing on both B2B and B2C channels. SAP Anywhere supports and simplifies both B2B and B2C scenarios.
SAP Anywhere has the full breadth of functionalities to support online and brick-and-mortar sales - sales management, opportunity management, quoting, forecasting (stock forecast, inventory forecast, deal size forecast), online, offline or a combination of all of the above. The solution includes customer service capabilities, both pre- and post-sales and in any format including online real time chat, email questions, phone questions and knowledgebase.
SAP Anywhere will be appealing for SMBs who are looking to transform their digital capabilities and grow their businesses quickly through multi-channel strategy. It delivers a consistent user experience for online and offline marketing campaigns as well as shopping, sales and service functions. It may be a little light on analytics but has enough functionality to help smaller firms engage more efficiently with their customers and connect with partners.
The evolution of digital economy will play an important role in the success of SAP Anywhere. It is certain that through SAP Anywhere, SMBs can quickly adopt digital infrastructure and participate in the on-going transformation towards digital economy, mainly in digital marketing (both B2B and B2C). At the technical level SAP Anywhere is distinct as it uses the latest SAP HANA platform. Previously, only large enterprises could benefit from HANA-based platform services, however with SAP Anywhere solution, SMBs who couldn’t afford HANA also get a chance to experience modern technology.
Competition is not sitting idle as there are several competing product solutions in the market. Prominent are accounting (including Wave Accounting and Zoho Books), sales (SugarCRM, Salesforce, and Zoho CRM), e-commerce (Shopify, Amazon, eBay, and Selz) and inventory management (Stich, and On-Hand). Pricing is an important factor for small businesses looking to purchase e-commerce solutions. To that extent Shopify is poised to be a tough competition for SAP Anywhere. Shopify’s e-commerce platforms are simple and cheaper with pricing from US$9 (Lite Plan) to US$179 (Unlimited Plan) per month as compared to SAP Anywhere’s China pricing from US$53 (standard edition for 3 users) to US$142 (unlimited for 3 users) and one-time implementation cost of US$1,560.
SAP Anywhere is first real example from SAP of a simple navigation that works on the computer with a mouse and on an iPad with a finger. A dashboard becomes the center-point of all business operations empowering an SMB executive to run his/her business from a mobile device. Simple questions can be answered and acted upon thereby contributing to business agility. Questions & actions such as – What is my inventory allowing one to re-order or re-allocate stocks? What campaigns are we running, who are we targeting, what has been the response and thereby allowing the executive to build rules around promotions.
SAP Anywhere also easily enables an SMB incorporate multiple currencies in its sales motion especially for cross-border selling either from a single store or from a number of stores for different geographies and markets and it integrates with popular payment systems and email campaign applications. SAP Anywhere has tremendous headroom to develop its SMB go-to-market strategy by focusing on:
In 2014, aided greatly by HANA, SAP clawed its way back from a position as an on-prem software monolith to a cutting-edge supplier of cloud-inclusive solutions. The biggest compliment for SAP was the attention it got from competitors and the willingness of other IT companies to partner. SAP Anywhere for SMBs is a step in the right direction, finally.
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