Let’s try a thought experiment: Imagine running your business without a telephone. Now, imagine that your competitor has a telephone, but you don’t. How well do you think your business could compete under these conditions?
This may seem like an odd experiment (what company today doesn’t have a phone?), but many small and midsize enterprises (SMEs) find themselves in a comparable situation. Except it’s not a phone that they’re missing — it’s the software infrastructure needed to maximize their business potential. And to make matters worse, the larger enterprises against which SMEs compete do have this software infrastructure — they are the ones who can afford the upfront hardware, IT staff, consultant, maintenance, and license costs that typically accompany an enterprise software implementation. This means that in the highly competitive world of business, SMEs are at a disadvantage. They are competing on a playing field that is far from level.
Now, enter cloud computing. This new computing paradigm removes many of the traditional cost barriers to acquiring software capabilities. Instead, companies need only pay a low subscription fee to use software — a delivery model called software-as-a-service (SaaS). The implications of SaaS are immense: small and midsize companies can finally get the same software infrastructure previously only available to their larger competitors.
So, has cloud computing leveled the playing field? Unfortunately, not quite.
The Wrong and Right Way to Cloud Compute
Cloud computing was pioneered by startup vendors that, perhaps by necessity, focused on developing point solutions for only one functional area. Consequently, as these w
ere introduced into the market, companies found that they were buying a SaaS solution for, say, customer relationship management (CRM) from one vendor, another for financial management from a second vendor, and a human resources or procurement solution from still another vendor.
What this means is that, as companies adopt these point solutions, their information is becoming increasingly siloed into different vendor “clouds.” A company’s customer data, for example, exists in a CRM vendor’s cloud, while its financial and general ledger information is in the finance vendor’s cloud. This phenomenon can create serious inefficiencies. Imagine a salesperson trying to book an order: He first has to take information out of the CRM cloud, port it over to the finance cloud, and then move it back again. Without expensive integration, this process is most likely done manually and by re-keying data — the very recipe for slowing a company down and introducing errors.
Similarly, imagine an executive who is trying to understand how her company’s planned production maps to the demand forecast. The only way to do this is to call up each manager responsible for the individual CRM, procurement, and manufacturing clouds to get demand forecasts and information about current and planned production reports and then see if correlations can be made to answer the executive’s questions. This approach may work, but it is cumbersome. And because of the lack of integration, the executive simply does not have a complete 360-degree view of the company. This, in turn, means that her ability to make the right decisions is impeded, as is the company’s ability to maintain its competitiveness.
Consequently, although using SaaS point solutions means that SMEs can get some of the software infrastructure capabilities they need, these SMEs may actually be taking a step back and becoming less competitive, given the lack of integration among the different point solutions. The right approach for SMEs, then, would seem to be to stay with the cloud computing paradigm, but avoid the pitfalls that come with point solutions by adopting a complete, SaaS-based, integrated suite. This is where SAP Business ByDesign comes in.
Level the Playing Field with SAP Business ByDesign
SAP Business ByDesign is the most complete, fully integrated business suite available on-demand (see sidebar). The solution functionally spans every area a typical company needs to run its business: CRM, supply chain management (SCM), supplier relationship management (SRM), project management, human capital management (HCM), and financial and accounting management.
The solution is a relatively new addition to the SAP portfolio, and it benefits from SAP’s experience in developing business process and analytics software. Couple this built-in experience with the relatively low cost of cloud computing, and it is easy to see how SAP Business ByDesign can start to level the playing field for SMEs. In particular, SAP Business ByDesign:
- Enables SMEs to easily execute complete end-to-end business processes and improve the operational efficiency of their company. In effect, by providing one integrated application, SAP Business ByDesign solves the problem SMEs run into when running multiple non-integrated SaaS point solutions.
- Gives users the 360-degree visibility, data, and analytical insights they need to quickly understand their business situation and make the best decisions. For example, Figure 1 shows an SAP Business ByDesign CRM “bubble” chart that gives salespeople easy visual insight into the leads and opportunities with the greatest potential, helping them identify the ones they need to focus on to maximize revenue or even meet their quarterly numbers.
In short, with easy and affordable access to the world-class capabilities within SAP Business ByDesign, SMEs now have the tools they need to compete effectively — be it in generating demand, manufacturing products, delivering client projects, or increasing the efficiency of their internal HR, financial, and accounting processes.
||SAP Business ByDesign CRM “bubble” analytics are designed to help salespeople focus on the right opportunities
Tilting the Field in Favor of SMEs
SAP Business ByDesign does more than just level the playing field for smaller companies — it also takes advantage of the unique properties of cloud computing to deliver capabilities that can tilt the field in favor of SMEs. Consider two examples:
SAP Business ByDesign enables dynamic adaptability. If there is one constant in business, it is change. Companies are constantly introducing new products, entering and exiting markets, and adopting new business models. This is a challenge for the IT department, which must constantly support these changing business conditions. For companies that use on-premise solutions, this often means calling in consultants to modify the solution, as well as buying and installing new hardware. This process is not only expensive, but also time-consuming; it can make on-premise software teams feel like they’re playing catch up to meet the needs of the business.
With SAP Business ByDesign, on the other hand, customers can easily adapt the solution without the need for expensive consultants and, more importantly, can take advantage of the cloud computing model to make their infrastructure changes instantly available. This means that, with SAP Business ByDesign, new software capabilities can immediately support dynamic changes to the business. From a competitive perspective, this means that, as business conditions change, SAP Business ByDesign customers can actually gain a speed and efficiency advantage against competitors that use on-premise solutions.
SAP Business ByDesign opens the door for innovation. One of the fascinating aspects of SAP Business ByDesign is that it provides a cloud computing-based platform upon which partners can easily develop and distribute applications that extend the solution’s base capabilities. The benefits for SMEs are considerable. For example, while it is possible for solution partners to build their applications into a new version of an on-premise application prior to its release, it is not always easy for them to distribute these applications to existing on-premise installations. Instead, any applications must be individually installed as custom configurations into each customer’s instance of its on-premise software.
With cloud computing software, on the other hand, partners only need to install their applications into the cloud-based software once, at which point they become instantly available to all customers. This means that SAP Business ByDesign customers, both new and old, can access a large library of partner-built applications to help them power different aspects of their business. It also means that they can access innovations and capabilities that aren’t as readily available to competitors who use on-premise applications.
The turn of events here is interesting. It used to be that larger companies had the advantage of having more software capabilities than their smaller SME competitors. With cloud computing and SAP Business ByDesign, SMEs can have more capabilities available in their toolkit than many of their larger competitors do (see sidebar for more information on implementing SAP Business ByDesign).
A Familiar Journey
This is an exciting era for SMEs. Cloud computing has emerged as a new way to more affordably access enterprise software. However, cloud computing is nascent. It is evolving in much the same way that on-premise solutions evolved. Just as the first on-premise solutions were siloed, so too were the first cloud offerings. It was SAP that unified siloed on-premise applications into one cohesive system called ERP. Now, with SAP Business ByDesign, SAP is repeating this journey, creating a holistic, integrated platform that will serve the needs of the entire business.
The promise for SMEs is that, with SAP Business ByDesign, they will be able to truly unlock the value of cloud computing — not only to obtain the software infrastructure they need to create a level playing field against larger competitors, but also to finally tilt the field in their favor.
Rahul Asthana (firstname.lastname@example.org) is a member of the SAP Business ByDesign solution marketing team. Prior to joining SAP, Rahul led product marketing at E2open, a SaaS-based provider of supply and demand chain solutions, held senior marketing roles at Fair Isaac Corporation, and founded his own analytics software company — Ankith Systems — which pioneered new econometric methods to increase the efficiencies of trade promotions. Rahul has a Ph.D. in Management from the Anderson Graduate School of Management at UCLA, and a BSEE from Princeton University.