Canadian paint supplier dumps legacy apps for SAP

SANTA CLARA, CALIF. — Paul Lobb has held leadership positions with several Canadian mid-market companies. The chief operating officer of paint supplier Dynamic Paint Products of Mississauga, Ont. was sure of one thing: SAP AG wasn’t for small and medium-sized enterprises (SMEs) like his.

“I’d been through a number of (enterprise resource planning) implementations in previous lives, and we’d always tried our best to avoid SAP in the SME,” said Lobb. “Too big, too complex, too pricey.”

As a supplier of paint and sundries to major retailers such as Wal-Mart, as well as independent dealers across Canada, Lobb said Dynamic has tremendous growth aspirations. And like many of its peers, it has the resources of an SME but the complexity and needs of a larger enterprise. It also works in a supply chain with a low tolerance for failure, so systems that work seamlessly with different customers with different standards and requirements are key. The 100-person company manages thousands of SKUs, distribution centres in Vancouver and Toronto, and manufacturing facilities in Toronto and China.

Having outgrown its existing legacy infrastructure that included an undersized Microsoft Solomon implementation and separate systems for EDI, warehouse management, business intelligence and customer relationship management, Lobb said Dynamic needed a single integrated IT platform to support its future growth. They brought in six vendors for evaluation, but he said SAP wasn’t a serious competitor at first.

“We considered SAP from a tier one perspective because we wanted to understand what the comparables (of the other platforms) would be to best practices,” said Lobb.

But when SAP presented Business All-in-One, compared to the tier two products, Lobb said it had the deep functionality and the end-to-end integration Dynamic was looking for. They saw it as a way to bring industry best practices into their organization.

“I never expected SAP to be the product that would be best positioned for our business. SAP certainly came to play in (the SME) segment,” said Lobb. “They offered us rapid deployment with a pre-configured package solution. The total cost of ownership also made the most sense compared to the others.”

The Dynamic experience isn’t unique, and lack of awareness of SAP as a mid-market brand is one of the biggest challenges the vendor faces. SAP goes to the market in the SME through channel partners such as Toronto’s Contax Inc., which performed the Dynamcs implementation. And partners say they often have to spend time just getting in the door of SME customers to convince them that SAP isn’t just a large enterprise player. Once they’re in the door, they’re very competitive, but too much time is still spent mythbusting.

“The number one thing I’d like to see SAP focus on more is getting the message out that SAP is not just for big companies,” said Michael Pearson, president of Contax. “I fight that battle every day. If there’s one thing we could use some help and support on, it’s exactly that.”

The concern is shared by Kevin Gilroy, SAP’s vice-president of channel sales for North America. The challenge is SAP’s marketing effort, while strong in the enterprise space, needs to be re-focused for the SME.

“SAP’s brand awareness is 25th in the world, but it’s not 25th in the SME. We work on that every day,” said Gilroy. “In the SME it’s about volume and scale,” said Gilroy.

While SAP’s SME marketing effort is a work and progress, Joel Martin, research director with London. Ont.-based Info-Tech Research Group Ltd., said SAP has a long way to go in marketing properly to the SME segment, which requires a very different approach and mindset than its enterprise cousins.

“I think I’ve yet to see SAP articulate a proper SME marketing program,” said Martin. “The video commercials look fancy, but they don’t talk well to the mid-market in the context of what their prospective customers are trying to achieve.”

Martin said the “real-time, everywhere” SAP message doesn’t really translate well to what a 10-person company is trying to achieve in their business, and what they’re looking for from technology.

Still, the mid-market should expect to hear more from SAP in the months ahead. Gilroy said the SME is driving growth at SAP and the company is investing heavily in growing the market.

“We started the SME transformation 10 months ago and incrementalism is not in our vocabulary. We’re about bold moves and aggressive steps,” said Gilroy. “We’re not offering an ERP suite that’s diluted for the SME. These are products designed specifically for the SME space. And we’ve just begun.”

More coverage of SAP Influencer Summit 2010: Cloud computing makes Oracle’s stack meaningless: SAP
Follow Jeff Jedras on Twitter: @JeffJedrasCDN.

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Jeff Jedras
Jeff Jedras
As an assistant editor at IT World Canada, Jeff Jedras contributes primarily to CDN and, covering the reseller channel and the small and medium-sized business space.

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