Home
 > Research and Reports > TEC Blog > Software Giants Make Courting A Small Guy Their "Business...

Software Giants Make Courting A Small Guy Their "Business One" Priority

Written By: Predrag Jakovljevic
Published On: June 6 2003

Event Summary

On March 27, SAP AG (NYSE: SAP), the leading provider of enterprise applications, announced the launch of the US version of SAP Business One, a new solution that should promote the company's capability to a new segment of the small and midsize business (SMB) market. At the same time, in a major pairing of two of the most trusted names in their respective technology and business services fields, SAP also announced that the Tax and Business Services (TBS) unit of American Express would distribute and provide support services for SAP Business One. Together, the two companies will also reportedly develop specialized vertical-industry editions of SAP Business One and establish a new distribution and support service model to meet the needs of small and midsize firms.

Not waiting for the grass to grow underneath its feet, and further refining its offering, on April 14, after building on more than six years of its the mid-market feats, PeopleSoft Inc. (NASDAQ: PSFT), one of the leading business applications providers, delivered 13 new mid-market solutions designed specifically for companies with $50 to $500 million in annual revenues. Preconfigured to automate mid-market business processes, PeopleSoft Mid-Market Solutions include an unlimited user license for PeopleSoft applications, training, and implementation services -- all for a fixed price. The solutions address a supposedly growing demand from mid-sized organizations to integrate critical business processes, and provide the flexibility to implement one module at a time.

This is Part One of a four-part note.

Parts Two and Three will discuss the Market Impact.

Part Four will discuss Challenges and make User Recommendations.

SAP Business One

SAP claims that, while many small and midsize firms have invested in multiple software applications, several report that they lack the ability to access the information they need, when they need it to make critical decisions, and they report a pressing need for easy access to real-time information. SAP Business One was thus designed to address these problems in an affordable, easy-to-implement solution. The solution aims at helping small and midsize businesses streamline their operational and managerial processes by providing strong and fully integrated financial and sales management capabilities. SAP Business One supports companies with as few as ten and as many as several hundred employees, and can also reportedly be implemented in as little as one week.

The solution's award-winning Drag & Relate data navigation system provides users with intuitive data access simply by highlighting and dragging pieces of information on the screen. In addition to the touted easy-to-use intuitive interface with Drag & Relate capabilities, the product features strong integration with desktop applications, since users can drag information between different data sources and link them on the desktop. The product also features integrated sales force automation (SFA) system for pipeline tracking, opportunity management, strategic selling, and contact management. Key functionalities also include comprehensive financial management, with multi-currency, budgeting, and bank reconciliation; a well-rounded inventory management system, with kitting and multi-level price lists; and a comprehensive reporting module that allows easy access to any data. The solution supports the Microsoft SQL Server database and the Microsoft Windows operating system. Its open architecture has reportedly allowed integration with the flagship mySAP Business Suite giving companies the adaptability to scale their applications with the growth of their business.

In addition to the US, SAP Business One is currently available in twelve countries and fourteen languages. Part of SAP Solutions for Small and Mid-size Businesses (formerly SAP Smart Business Solutions), SAP Business One has more than 1,300 customers worldwide. The new product in the US has for some time been successfully sold in the lower-end of the European SMB market, since it provides small and medium businesses with an integrated family of enterprise applications tailored to the specific needs of sales-driven companies. As mentioned earlier, it addresses the core operational needs of SMBs, such as accounting and banking, financials, sales force automation (SFA), purchasing and selling, logistics and product trees, as well as reporting and analysis.

It also provides analytical tools to gain insight into an organization's operations, online alerts for collaborative event tracking and problem solving, and customizable reports that give companies the information they need in a format that allows them to brand their business. The solution is not a reconfigured or dumbed-down' version of its larger sibling mySAP Business Suite, but is rather based on TopManage, a product developed and marketed by former Israeli software company TopManage Financial Solutions LTD, which SAP acquired in March 2002 and integrated into its business unit for the SMB market, which was formed at about the same time.and which supports the further development of Smart Business Solutions from SAP and its partners and assist SAP partners in delivering customized, industry-specific solutions.

Since SAP's Solutions for Small and Mid-size Businesses division aims to provide the full spectrum of SMBs with affordable, easy-to-implement and scalable solutions to meet their business and technical needs, in addition to SAP Business One, designed for smaller companies with less complex business processes, SAP also offers to its partners mySAP All-in-One, turnkey solutions to meet the industry-specific needs of more sophisticated companies. For "sophisticated" or the upper echelon SMBs with a high need for individualization and industry-specific functionality, SAP is globally expanding its existing strategy of offering industry-specific SMB solutions. These are based on flagship mySAP Business Suite (recently supplanted mySAP.com) product and are tailored, configured and complemented by SAP channel partners, and are available on a fixed-price, fixed implementation time basis.

Relationship With American Express

SAP pledges to support its channel partners by providing training and by facilitating the transfer of relevant customization and development knowledge, aiming to create synergies and efficiencies worldwide. In addition, the existing SAP indirect sales organization will also strengthen its support to channel partners with their international marketing and lead-generation activities in this market segment. To that end, the relationship between SAP and American Express involves two major components. First, American Express will reportedly serve as an individual reseller of SAP Business One and is building its own national network of highly qualified channel partners. In addition, American Express is working with SAP to develop specialized versions of SAP Business One, to be offered exclusively by American Express and its channel partner network under the brand SAP Business One - The American Express Edition. American Express Tax and Business Services Inc. is a professional services firm that provides solutions for the financial and business consulting needs of small to mid-sized organizations. The firm has 54 offices and over 3,000 employees in 16 US states.

American Express' management believes that, given the company has been involved in helping small and midsize businesses make IT decisions and implement solutions for more than 15 years, it has an in-depth understanding of their needs. The company has a staff of 150 consulting and IT professionals in major metropolitan regions across the country and have committed to building an even larger multi-tiered network of qualified consultants to deliver the kind of service midsize firms typically cannot find. Still, although American Express TBS employs certified/chartered public accountants (CPAs), it is not a licensed CPA firm.

In any case, American Express pledges to provide qualified business partners that join the larger national network with day-to-day support on account management, as well as assistance in all aspects of marketing, sales, implementation, and support. Working with SAP, American Express is already building a specialized edition of SAP Business One that should meet the peculiar needs of distribution and wholesale firms. Building on its expertise as a management consultant to firms in wholesale distribution, the first release of SAP Business One - The American Express Edition will supposedly provide distributors with pre-integrated capabilities such as warehouse management, shipping manifest, multi-jurisdiction taxation, electronic data interchange (EDI), credit card authorization, and document management. The special edition will add other services and address additional vertical industries over time as well as incorporate services currently provided through other American Express business units. Clients using SAP Business One The American Express Edition will be able to obtain support for all of these capabilities and services with a single phone call from anywhere in the US.

PeopleSoft

Not waiting for the grass to grow underneath its feet, and further refining its offering, on April 14, after building on more than six years of its the mid-market feats, PeopleSoft Inc. (NASDAQ: PSFT), one of the leading business applications providers, delivered 13 new mid-market solutions designed specifically for companies with $50 to $500 million in annual revenues. Preconfigured to automate mid-market business processes, PeopleSoft Mid-Market Solutions include an unlimited user license for PeopleSoft applications, training, and implementation services -- all for a fixed price. The solutions address a supposedly growing demand from mid-sized organizations to integrate critical business processes, and provide the flexibility to implement one module at a time.

PeopleSoft has delivered 13 new Mid-Market Solutions designed to automate key business processes such as source-to-settle and recruit-to-hire. Typically, software vendors package mid-market solutions in a way that requires customers to buy and implement multiple applications at one time. Contrarily, PeopleSoft aims to provide mid-market organizations with the flexibility to purchase only the solutions they need to address core business processes. As a result, mid-market companies should be able to implement one application at a time and deploy additional applications to extend business processes as needed. In addition, PeopleSoft Mid-Market Solutions can reportedly be implemented in as little as 70 days.

Based on best practices learned from its existing mid-market customers, PeopleSoft claims to have preconfigured the right solutions required to automate critical business processes that will result in an accelerated return on investment (ROI). PeopleSoft Mid-Market Solutions are generally available only in the US. Pricing starts at $50,000 per implemented module. The fixed-price packages, which are aimed at companies with annual revenue of between $50m and $500m, cover training and implementation and more interestingly, unlimited user licenses. The solutions are mainly a packaging exercise but they do address key issues such as the cost of integration, the hidden costs of unpredictable user license requirements, and training costs, as well as providing potential users with a way of spreading the cost of their purchases.

A new initiative of the launch of the following 13 pre-configured, business process-specific solutions does not bring any new functionality to the table but it is designed to address the recurrent problems of cost and complexity that high-end vendors face whenever they attempt to sell into mid-market enterprises:

  1. PeopleSoft Mid-Market Financial Management
  2. 2. PeopleSoft Mid-Market Resource and Project Management
  3. PeopleSoft Mid-Market Sales and Marketing
  4. PeopleSoft Mid-Market Service
  5. PeopleSoft Mid-Market Sourcing
  6. PeopleSoft Mid-Market Procurement
  7. PeopleSoft Mid-Market Fulfillment
  8. PeopleSoft Mid-Market Manufacturing
  9. PeopleSoft Mid-Market Recruit Workforce
  10. PeopleSoft Mid-Market Optimize Workforce - Payroll
  11. PeopleSoft Mid-Market Optimize Workforce - Payroll Interface
  12. PeopleSoft Mid-Market Reward Workforce
  13. PeopleSoft Mid-Market AppConnect

PeopleSoft's new solutions aim to address specific business processes such as source-to-settle or recruit-to-hire and offer the core application and pre-configured business processes needed to address them. What differentiates these offerings from previous packaged solutions is that they are built around a single application and a specific business process rather than requiring multiple application modules to be implemented at the same time. Once in place potential customers can add other applications and business processes on a modular basis.

In 1997, PeopleSoft vocally launched an orchestrated effort to target smaller enterprises by forming a separate Mid-Market Division. At that stage, the company delivered PeopleSoft Select, which included a comprehensive software and services solution for human resources (HR) and financials. During 2000, PeopleSoft announced Accelerated Solutions for HR and Financials a comprehensive solution that included applications, technical and end user training and implementation services. , In 2001, PeopleSoft launched Accelerated SCM, Accelerated CRM and Accelerated ESA (Enterprise Service Automation), all aimed at customers with $500 million or less in annual revenues. Also in 2001, PeopleSoft announced the launch of its Accelerated Alliance Program, a select group of systems integrators that provide customers with high quality, low cost implementations. . During 2002, PeopleSoft delivered Accelerated solutions to countries including France, the United Kingdom, the Netherlands, Australia, New Zealand and Canada. .

This concludes Part One of a four-part note.

Parts Two and Three will discuss the Market Impact.

Part Four will discuss Challenges and make User Recommendations.

 
comments powered by Disqus

Recent Searches
Others A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

©2014 Technology Evaluation Centers Inc. All rights reserved.