SAP caters to the little guy

SAP Canada Inc. continues to bolster its Canadian small and midsize business software strategy, announcing this week a partnership with Calgary-based Matrix Business Solutions Inc. to push its technology to specific industry verticals.

According to SAP Canada, newly formed solutions provider Matrix — an amalgamation between Denver-based enterprise asset management firm RMB and iSP3 Solution Providers Inc. in Calgary — will work with IBM’s Montreal-based SAP Centre of Excellence to re-brand IBM’s mySAP All-in-One vertical template solutions for asset-intensive companies operating in the wholesale and distribution, fabrication and assembly, consumer packaged goods, and food and beverage industries.

The mySAP All-in-One software offerings — aimed at organizations with $100 million to $250 million in revenue — are essentially scaled-down versions of SAP’s enterprise resource management (ERP) software. The pre-packaged vertical templates are based on past ERP implementation experiences within the specific industries, said Gord Townley, national SAP practice leader for Markham, Ont.-based IBM Canada. This both reduces the time to implement and total cost of ownership.

The traditional view of SAP has been of complex enterprise applications, Townley said, adding that an offering such as All-in-One counters that perception and offers enterprise-class solution geared for the SMB market. Pricing is client-specific, Townley said. Templates for the food and beverage, fabrication and assembly and wholesale and distribution verticals are available now.

With the announcement SAP now has 11 channel partners that provide 42 All-in-One products in North America; the pre-packaged template products include real-time integrated application software for operations, manufacturing, maintenance, financials, customer relationship management (CRM) and business intelligence (BI).

According to SAP, smaller firms are shifting toward “best-in suite” versus “best-of-breed” solutions. Jeff Watts, senior vice-president, marketing and alliances for SAP Canada said the market is critical to the firm; Watts said in the last quarter 46 per cent of SAP’s transactions were in the small and medium-size (SMB) space. The strategy is to take best-of-breed technology from the high-end, scale it down for this SMB market and use local partners to provide the support and expertise, Watts said. Enterprises are seeking 80 to 90 per cent pre-configured solutions as a result.

“Tell me what the 10 per cent difference is and give me a fixed-price implementation around this (is what enterprises are saying),” Watts said.

SAP, much like other large enterprise vendors (including Hewlett-Packard Co., Microsoft Corp. and Oracle Corp.) still has a long road ahead of it in term of making major inroads within the SMB market. As Michael Hyjek, a senior analyst with Toronto-based IDC Canada Ltd. noted, the key for SAP and in general enterprise vendor is to meet the specific needs of the SMB market. Hyjek said large vendors can be successful in this space but they need to demonstrate their commitment to the mid-market and play by SMBs rules.

SMBs aren’t equipped to cope with large and complex applications and the administration that comes along with that. “SMBs tend to be reactive IT buyers who buy on pain,” Hyjek said.

And while mid-market firms are traditionally slow to adopt emerging technologies, Hyjek said they would embrace technologies that will help solve specific business issues.

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Jim Love, Chief Content Officer, IT World Canada

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