SAP Business One, Chapter Two: Raising the Small Business Bar

In the world of SAP enterprise resource planning (ERP) solutions for small and medium businesses (SMBs), SAP Business One is sometimes overshadowed by SAP Business All-in-One (BAiO), which has SAP’s large enterprise ERP at its core, and by and SAP Business ByDesign, which is SAP’s first software-as-a-service (SaaS) ERP entry.

But Business One, which is designed from the ground up to meet the needs of small businesses with fewer than 100 employees, has quietly kept growing both its capabilities and in new customer acquisition. During the past year or so, SAP has also made some significant new investments in three key areas: mobile, on demand and big data.

Taken together, these developments could open a new chapter for Business One–and for small businesses that want to use IT to transform their businesses.

Chapter One–A Brief History

Business One has its roots in SAP’s acquisition of TopManage Financial Systems in 2002. SAP made the acquisition to provide small businesses (and subsidiaries in larger companies) with an affordable way to move up from entry-level accounting solutions to a single, integrated business management offering.

The solution is designed for small businesses that have little or no IT resources. It provides a unified suite of financials, sales, customer relationship management, inventory and operations capabilities, along with embedded analytics and reporting capabilities.

Over the years, SAP has continued to invest in Business One to keep pace with changing market requirements and global demands. Business One is now available in 27 languages and 40 localizations. To help partners more easily extend solution functionality, SAP built an integration platform for Business One that has since attracted over 550 add-on solutions. Today, Business One has over 35,000 customers in over 80 countries. At its current pace, SAP estimates that it is on track to add about 5,000 new customers per year.

Chapter Two–Mobile, On Demand and Big Data

Fast forward to today. SAP is infusing Business One with the new mobile, on demand and big data capabilities it needs to take the solution to the next level.

On the mobile front, SAP launched Version 1.5 of its Business One mobile app in February 2012. The mobile app gives customers access to key Business One functionality, such as alerts and approvals, real-time Crystal Reports, customer and supplier data and inventory information via mobile devices. The app is available for the iPhone and iPad via SAP, and for Android devices through its partners. Looking ahead, SAP plans to add new mobile functionality for as sales document creation so that sales reps can do more on the go. SAP is also updating the user interface (UI) so that mobile users can have multiple windows open the same time so they can more easily view the information they need.

In March, SAP introduced Business One OnDemand to offer Business One in a cloud-based, subscription model. The OnDemand version has and will maintain the same functionality and interface as the on premise version. SAP is certifying partners to host the solution to ensure that they meet security, performance and quality standards. In most cases, these hosting partners provide the back-end infrastructure, and team with SAP VARs who sell and implement the solution. SAP has also created a Cloud Control Center that supplies partners with automated tools to manage Business One OnDemand throughout the solution lifecycle.

Some pundits have claimed that Business One OnDemand is not a true, multi-tenant, software-as-a-service (SaaS) solution. So I asked SAP for clarification on some of the technicalities and learned that users do need a remote desktop solution (such as those from Citrix or Microsoft) to access Business One OnDemand. And, while the solution is multi-tenant in that users share the same instance of the application and SQL server, each user has its own database schema.

Since Business One OnDemand requires a remote desktop solution and customers don’t share a database schema, cloud purists are likely to discount it. However, these details are much less likely to create issues issue for actual small business customers–and may work in SAP’s favor.

The fact that SAP’s on premise and on demand versions share the same interface and database structure means that existing customers can move to the cloud without complex data conversions or additional user training. Meanwhile, SAP Business One can now get into consideration among prospects that are only considering a cloud solution. And, some of these prospects may prefer to have their own dedicated database schema, along with access to the 550+ partner apps that are in Business One arsenal. Finally, NetSuite, arguably the leading SaaS ERP vendor, has been moving away from its original small business focus to concentrate more on the mid-market and departments of large enterprises, ironically paving the way for SAP to make inroads here.

SAP also announced Analytics powered by SAP HANA for SAP Business One, which will be generally available in late 2012. HANA is SAP’s “big data” solution. It’s a column-based, in-memory database that allows applications to zip through calculations for millions of records in just fractions of a second. SAP HANA for SAP Business One is scaled for the needs of small companies. It combines the SAP HANA-based application with SAP Crystal Reports software so small businesses can get the benefits of speedy data crunching and use the tools that they are already comfortable with to analyze this data. The solution includes a set of predefined, ready-to-run dashboards and reports.

While some small businesses may not require this added horsepower, the offering is relevant for those that need to more effectively analyze more and more complex content–including audio, video, and text–to compete effectively in their markets. These customers will be able to create interactive reports and run ad-hoc analysis much faster than they could before; navigate through various business objects from one screen; and use free-style search to access information more quickly.

The Rest of the Story

SAP Business One isn’t for all small businesses. After all, although the price tag is low compared to other SAP offerings, Business One still represents a significant expenditure compared to the typical small business accounting solutions.

But, even amidst–or maybe because of–economic uncertainties, our SMB Group 2011 Small and Medium Businesses Routes to Market Study indicates that there is sizeable segment of the small business market that plans to increase IT investments. These “progressive” small businesses see IT as a means to create market advantage and achieve their business goals. While price is a factor, they rate other criteria–such as the ability to customize solutions, strong vendor reputation and local support and service–higher than other SMBs when making technology purchase decisions. Business One hits the mark on these criteria, and consequently, is likely to enjoy continued good growth in this segment.

However, this progressive segment is demanding and will expect SAP to stay ahead of the curve. To do so, SAP will need to address a couple of additional areas in this new chapter, including:

• Collaboration and social. One of the biggest trends in social-collaboration space is to connect collaborative activities with business processes. SAP has already merged its Streamwork team with its newly acquired SuccessFactors’ Jam team, and the combined entity is hammering out SAP’s future direction in this area. SAP needs to add social and collaboration capabilities to Business One sooner, rather than later, to ensure that Business One customers can take advantage of integrating collaborative and business processes.

• Mobile applications for external users. Business One has a solid solution and game plan for internal (employee) mobile apps, but what’s the plan to extend access to selected functions to external customers, partners and suppliers? The SMB Group’s 2012 SMB Mobile Solutions Study indicates strong plans among small businesses to provide mobile apps for external users for activities such as appointment scheduling, payments, marketing offers and service. Over the long-term, partners should probably be responsible for developing most of these apps, but SAP needs to seed the area to jump-start partner app development.

Overall however, SAP Business One, Chapter Two is off to a good start. The mobile app has already been downloaded more than 34,700 times; about 60 partners are preparing to come on board to offer Business One OnDemand; and over 30 customers are in ramp up with Analytics powered by SAP HANA for SAP Business One.

In addition, while large enterprise solutions will continue to dominate SAP news, SAP’s commitment to and investment in small business solutions is growing. For instance, the vendor recently announced that it is sponsoring a global competition with Ashoka Changemakers, The Power of Small: Entrepreneurs Strengthening Local Economies.  The contest is designed to identify innovative strategies that can help small businesses grow and thrive in underserved communities.

The bottom line? SAP clearly takes small business seriously–and small businesses that are ready to move up from stand-alone accounting solutions should take SAP Business One seriously too.