BusinessOne: Changing Minds

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by Carly Lombardo

When people think of SAP, they often think of high-end software. However, with SAP's BusinessOne, designed for small and midsized businesses, the company is out to change people's minds--and the channel is part of the change.

In fact, the channel currently has 50 resellers, many of whom sell accounting applications from Microsoft Business Solutions, Best Software, and Epicor. So what's the draw to SAP BusinessOne?

Partner Insights

"Most of the market is dominated by legacy systems and players like MBS and Best who've been around for a long time, and have tried to bring technology forward. However, it's hard to do because of all the little idiosyncrasies in their products," says Daniel Carr, president of Northville, Mich.-based CDI and a BusinessOne reseller since April.

Korey Lind, president of the Elmwood Park, N.J.-based reseller Third Wave, has been selling MBS Great Plains products for 10 years and will continue to do so. However, "I didn't feel comfortable with all my eggs in a single vendor's basket. Before SAP BusinessOne, we didn't find any other solution that was different enough from the MBS Great Plains line. SAP focuses on different types of customers, has embedded CRM, and it allows us to go after customers with unique business problems in markets such as distribution and light manufacturing. We couldn't do that with MBS Great Plains," says Lind, whose organization was the first to enlist with SAP last year.

BusinessOne was created in 2000, and acquired from TopManage and renamed BusinessOne in 2002. According to Gadi Shamia, vice president of SAP BusinessOne, the application is designed for companies with anywhere from 10 to several hundred employees.

"As a company, we can serve customers through the entire growth cycle, and we don't believe in forcing the wrong solutions on customers. BusinessOne is easy to implement and can be up and running in a few weeks, but still has lots of functionality," says Shamia.

SAP touts the use of open standards to enable BusinessOne to integrate with other systems. Users can also establish relationships between data through the drag-and-relate feature.

Also, SAP Business One includes these core operations:

● Purchasing manages and maintains vendor contacts and transactions including purchase orders, updating in-stock numbers, handling returns and credits, and processing payments.

● Warehouse management handles inventory levels, item management, price lists, transfers between warehouses, and stock transactions.

● Controlling enables users to define profit centers and overhead absorption factors as well as generate profit and loss reports for each center.

● Sales and distribution helps users create price quotes, enter customer orders, set up deliveries, and manage all invoices and accounts receivable.

Mark Compher, who handles pre-sales and knowledge management for BusinessOne, says the alerts feature has proved popular. For example, the system can be set up so any time a sales person puts in an order and the discount is less than 45 percent, the order is automatically routed to the sales manager for review.

Lind has several customers who are using this feature. It "gives customers the ability to manage business by exception. Everyone doesn't have to review every step. Information is routed to just the people who need to see it," she says. Lind already has six customers using the system. The target for this year is 15 customers in the light manufacturing and distribution industries.

SAP also says that BusinessOne's embedded CRM sets the product apart from other systems. Information from customers, the sales force, suppliers, and business managers is tied to other business information, so that CFOs can drill down into sales information. Pricing for a 10-user BusinessOne system with everything starts at $50,000. The company says having both front-end and back-end features in the system has strong appeal.

"Our customers love the embedded CRM because they don't have to buy another program," says Carr. "With BusinessOne there isn't even a CRM menu item, it's easy to implement, and has not just CRM, but also Business Partner Relationship management that includes vendors."

Lind agrees. "The CRM function also has a service module, and we've replaced a lot of old Unix and DOS systems." She provides this example: A company exports supplies for franchises such as Dunkin Donuts in countries such as Russia and the Middle East. SAP allows the company to send the supplies in the right language. For each item there's a language slip that goes with it, and even though the item levels are unique, the boxes are labeled correctly.

SMB Partners

SAP has gotten attention by signing up top VARs that handle competing products. For example, it enlisted the TM Group, a Farmington Hills, Mich.-based reseller that has been a member of the Great Plains President's Club for 14 years -- the only Great Plains reseller with such a streak.

SAP says it has set out to find reselling organizations with good track records.

"We want partners who have sold similar solutions and know how to sell. We're open to partners with a CRM business, partners who want to build their business around BusinessOne, or partners who are selling other business management solutions," says Shamia.

With 50 resellers signed up, Shamia hopes to have 150 partners this year, and 200 by the end of 2005. Currently, there is coverage in all metropolitan areas, with cities such as Los Angeles and New York having several partners. Although SAP would not reveal margins, discounts are reported to begin at 40 percent.

The key to the channel, according to Shamia, is quality over quantity. "Our partners are not just a number and name," he says. "We want to work with them to create a business plan, sales methodology, and provide them with leads. A high-touch model is important; we're selling the program first and then the product."

To enroll, resellers must pay a $10,000 fee and submit SMB customer references, along with a marketing and business plan. They must also have sales representatives and consultants who need to pass a certification exam after a week of training. Partners are encouraged to close a minimum of 12 new clients per year.

CD1's Carr was impressed that during SAP's road shows, the company actively helped the resellers reach prospects. "When SAP launched the channel, they allowed us to give them a list of our prospects to attend the tour, and SAP was there for three days to run a program to educate our potential prospects," says Carr. "It was a great turnkey marketing program."

Two initiatives that Carr says have produced substantial leads are SAP's radio campaigns and education seminars. "We have partnered with SAP to provide seminars about converting our wholesale and distribution clients from the Facts software package to BusinessOne. For every 20 people who attend a seminar, at least half turn into serious leads," he says.

Carly Lombardo is Associate Editor of Accounting Technology and can be reached at carly.bohach@thomsonmedia.com.

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