SWOT Analysis on SAP BusinessByDesign
SAP launched its much-awaited Business software SAP BusinessByDesign in New York on 19th September, 2007, thus heralding a new business model in the ERP space. A quick SWOT on the product reveals that it is indeed going to live up to the expectations set by SAP top brass. However, SAP may need to have a re-look at the price points
Strength
• Brand SAP: The fact that SAP BusinessByDesign is an SAP product speaks much about its scalability, security, adaptability and flexibility
• Positioned as ERP+: SAP BusinessByDesign is not simply an ERP. It is an end to end solution. SMEs do not have to look beyond this solution for other needs, ex for Opportunity Management. SAP Business ByDesign caters to all business processes
• SOA Compliant: SAP has inbuilt its other innovation - SAP Netweaver into SAP BusinessByDesign. This means that the product has readily available services which can be interfaced with other applications. This also makes SAP BusinessByDesign future-proof, a major concern specially for SMEs who really are not IT savvy and neither wish to allocate budget for IT year on year
• Specific target customers: SAP has rightly targeted the SMBs, who actually felt their was not much in the market space to offer them. The product has a defined positioning which is very good and doesn’t promise too many things for too many customers. Bad targeting always proves a doom for product marketers
• Language support: SAP BusinessByDesign supports major languages. Though the product is yet to be launched all over the world, the language support feature makes it a global product already - markets where the product will be launched next year already have one of their fears alienated
Weakness
• Pricing: This is the major weakness for SAP BusinessByDesign. Priced at $ 149 per user per month, this is on the higher side. Though the idea would have been to simplify the pricing, it may backfire. Pricing should have been based on the number of modules the client wishes to buy. Ex A client may not want HR, may end up paying the same as a customer who decides to have all modules hosted.
• Functionality: SAP should have integrated the Duet functionality into SAP BusinessByDesign. SMBs work extensively on MS office and lesser on portals. If the idea is to "pull" users to SAP BusinessByDesign, as articulated by SAP, Duet should have integrated in this release
Opportunity
• Market size: By SAP's own admission, there is a market of approximately $ 15 billion. SAP will have the early mover advantage in this space, among other ERP vendors
• Marketing: As SAP continues to spend on marketing SAP BusinessByDesign, upto EUR 300-400 million by 2008, customers will be more educated about an SOA based ERP+ product from SAP. SAP BusinessByDesign already has about 20 customers. As more converts start joining the club, their will be more success stories and the mid-market segment will have lesser reasons to complain in terms of Business solutions.
Threats
• Cannibalization: The biggest threat is cannibalization by SAP Business All-In-One. SAP A1 potential customers may actually end up embracing SAP BusinessByDesign. Unless properly educated, the market may end up getting confused between positioning of SAP A1 and SAP Business ByDesign.
• Point solutions: SMBs have affinity for point solutions which were either procured or home-grown, and therefore, the shift may not be immediate.
Though the product has rooms for improvements, in terms of functionality and pricing, but it is bound to bring a revolutionary change in the market with its concept of subscription based pricing and a lower TCO.
Sunday, March 23, 2008
Mobility Solutions for a fertilizer company in India
The major challenge facing rural marketers is reaching the consumer with the best product mix in the least possible time. The fundamental problem is one of connectivity and networking. Extending this problem, the sales personnel operating out of remote locations, find it difficult to confirm a delivery date to the dealer. Dispatch points or warehouses may fall in a stock-out situation. The problem becomes pronounced for seasonal products like fertilisers.
Organizations suffer from problems like lack of real - time reporting and close integration across different departments. An ERP solution seeks to address these issues, but most organisations stop at just implementing the core modules/functionalities like financial management, sales & distribution, purchasing functions, production planning and enterprise asset management. The basic premise of this implementation is the availability of a “wired network”. What gets ignored and probably unnoticed and unanswered is “Have I moved closer to my customer?”
Forward looking organisations like Nagarjuna Fertlisers & Chemicals are looking beyond a normal SAP/ERP implementation. New age solution providers are constantly re-inventing themselves to adopt and seamlessly integrate new business functionalities with their existing solutions. Mobility solutions and integration with SAP, are the latest enablers which empower field personnel to take instant decisions like delivery date confirmation, payment confirmation, basic sales and accounts analytics, etc. Most importantly these are seamlessly integrated with the SAP ERP solution so that the central offices/ senior managers have the up-to-date information of the field activity. Some of the key business benefits that can be derived by NFCL based on this integration of SAP core modules with mobility solutions are:
Quicker order processing: Sales orders can be remotely created by mobile devices, which instantaneously get reflected in the central SAP system. Typically, this information takes 3-4 days to travel.
Real time stock position: Sales people can immediately confirm availability of any fertiliser at a warehouse nearest to the dealer making order handling and better.
Streamlined logistics planning at “unconnected” warehouse: Both inbound and outbound logistics planning become streamlined with mobile devices. The problem, till now, because of “unconnectivity” is automatically resolved.
Accurate Credit Management: Mobile devices facilitate payment postings by field sales personnel, which undoubtedly assist in credit monitoring. Bad debts are avoided with increased accuracy.
Real time MIS reporting: Till now, more of a dream is realistic, with stock position, customer payments and orders being tracked real time. Field officers are now empowered to take quicker and accurate decisions. Consumer proximity is the biggest differentiator and in fact, brings the most visible competitive advantage.
The original paper was published as a case study on the Financial Express:
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