SAP Business One: An Affordable ERP Solution for SMBs with Basic CRM, Manufacturing, and Finance Components

Comb's are not high margin companies individually, and the internet is a great way to cut down on the sales cost and time to close for deals. As mentioned above, SAP offers two "solutions" for Comb's: SAP Business One ND mynas All-in-One. SAP even discloses that 60% of their implementations fit into the SMB category (a large number considering it was earlier stated that 15% of revenue comes from such clients). The category is defined in a related article sponsored by SAP done by DC (a global market intelligence and advisory firm) the SMB category is made up of businesses with fewer than 1,000 employees. SAP Business One SAP Business One is targeted at companies from 10 to several hundred employees. It includes the basic CRM, manufacturing and finance components of the ERP software, the so-called "critical" functions. It is billed as an ass to implement, understand and upgrade solution that integrates with Microsoft Office applications. It's repeatedly referred to as an affordable solution which solves the problems of multiple systems for multiple uses (what ERP does for any business). The following is an outline of the capabilities of SAP Business One, which is implemented through business partners.

Most companies have some form of application or software system that handles financial, inventory and customer data, intelligence and reporting. 9 www. Sap. Com Looking through the demos available through SAP's website, the interfaces appear to e straightforward and robust, but not an open-the-box solution such as Microsoft Office. There would still need to be some kind of training to get an organization up to speed on the software. Case in Point: Annexation Federal One organization that successfully used this approach is Annexation Federal, a systems integrator to U. S. Federal government agencies.

The company, which designs, sources, and installs voice and data telecommunications systems, struggled with a variety of legacy systems from prior mergers. The company needed a single, integrated solution that could handle the omelet demands of managing high-end telecommunications projects while providing greater flexibility, better reporting, and enhanced data visibility throughout the organization. Annexation Federal saw a demonstration of the product, which proved to its financial team that SAP Business One could support the company's current and future accounting and financial systems needs.

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The organization recognized that the SAP Business One features were precisely what was needed to help manage the order- to- cash process accurately tracking order and sales from multiple vendors, billing contracts in a timely manner, monitoring work in progress, ND accurately calculating contract profitability. Implementing SAP Business One in less than six weeks, the company was able to create a seamless path from initial quote to purchase order through 7 invoices.

With SAP Business One, we were able to streamline multiple solutions down to Just one and simultaneously achieve much wider functionality than we had previously, says Duane Taylor, vice president of finance for Annexation Federal. Today, the company is able to more effectively get the information it needs from its system, creating dramatic benefits. For example, the reconciliation of financial data at he end of each fiscal period once took as much as three weeks with employees working overtime. With SAP Business One, the company generates the needed department were redirected, saving more than $300,000 annually.

Accounts receivable collections improved as a result of the availability of information, saving $1. 5 million. In addition, soft benefits such as improved communications, better visibility, and enhanced customer responsiveness have also been noted. The net result: Annexation Federal received payback on its investment in Just four months. (from SAP. Com) mynas All-in-One mynas All-in-One consists of solutions which are re-packaged and industry specific. They are versions of the mynas Business Suite engineered for turn-key application.

These solutions are created to enable companies in the SMB range to purchase the capabilities of SAP software without any of the implementation issues associated with modifying the system. These are implemented through business partners such as Barrington and MM. In addition to these solutions, SAP also describes on their website the success stories through press releases, news articles, examples and case studies for particular industries. Qualified mynas All-in-One solutions are under development worldwide. And several of these vertical and cross- industry solutions are currently available in North America.

Examples include industries such as high tech manufacturing, semiconductor manufacturing, ISP businesses, pharmaceuticals, and beverages. A recent press release outlined the partnership with SAP and Citric: 8 Both software vendors traditionally have focused on the enterprise market but now have Joined forces to make inroads into the SMB market. The solution will allow small and midsized customers to securely access their ERP applications from the road or from their home offices, the companies said. Citric will adopt SAP's licensing model ND has priced the Material solution at $139 per named user.

Business One costs $3,700 per named user. 10 10 Rooney, Paula. Citric, SAP Join Forces To Target SMB Market Joint solution to be Material Presentation Server For Business One. CRY. January 17, 2005 9 SMB ERP oracle protect it. Headquartered in Redwood Shores California, Oracle has operated for over three decades and is currently the world's largest enterprise software company with over ten billion dollars in annual revenue. The company has grown in part through organic growth and in part through acquisitions, including Peoples/JDK Edwards 2004), Retake (2005), and Entrance (2002).

Oracle currently offers SMB solutions through both its Oracle and Peoples/JDK Edwards brand names with a vision to merge the solutions into a central 'Fusion' platform. 11 Their company vision places an emphasis on three principles of the Inoperativeness Enterprise; to simplify, standardize, and automate. Oracle has integrated these principles into their own operations and focuses to incorporate them into the design of their software to better serve businesses worldwide. In June 2004, Oracle concluded that the enterprise segment was highly penetrated and the mid-market segments are large ND growing.

In FYI 02/03 over 50% of application new license revenue came from companies under $1 billion. Oracle's market assessment concluded that they would move to target the US mid-market segment as they believe it to hold the greatest potential for incremental growth. 12 Their mid-market messaging will surround the idea of 'simply business. ' More specifically, Oracle looks to emphasize their affordability, simplicity, competitive, and growth aspects. 11 Presentation by Hide Kindle of Oracle in Seattle on Thursday, May 12 and www. Oracle. Com/solutions/mid/index. HTML 12 Oracle Presentation, June 2004 - Mid Market Special Edition Campaign Plan: HI IFFY SMB ERP oracle E-justness suite 'special Edition' The current Oracle solution emphasizes their E-Business Suite. The suite specifically focuses on core business applications to streamline key business processes (financial, purchasing, inventory management, order management, manufacturing, and sales force automation). 13 To target businesses less than $100 million, Oracle offers a 'Special Edition' package which is basically a scaled down version of their full- business suite.

It claims to be affordable, easy to install, and simple to implement for a rapid and measurable return on investment. Oracle has chosen to sell this package through regional partners rather than directly through their sales representatives. 14 The differentiating factor that Oracle focuses on is that they are the only package with comprehensive, built-in business intelligence. What this meaner to SMB is that they will be able to manage, access, and analyze their business data very rapidly.

This ability to synchronize information can give a company the ability to quickly Enterprise The current Peoples/JDK Edwards SMB solution is targeted at companies that have begun to outgrow their current systems. It is positioned as footwear to meet a company's current needs with the flexibility and adaptability to also meet needs in the future. The product line is branded under JDK Edwards (Enterprise Solutions, Rapid Start, and World Express). Emphasis is placed on the comprehensive industry-specific functionality, affordability of the package, and flexibility to fit into a current and changing business. 314 Conversation with Keith Gosling of Hitachi Consulting in Seattle on Monday, May 16 Presentation by Hide Kindle of Oracle in Seattle on Thursday, May 12 The package is a pre-integrated set of modular applications with built-in, underspecified functionality. At this point the JDK Edwards sales force continues to sell the JDK Edwards product. They continue to promote the product but at some point in the next 2-3 years I predict that the sales forces of JDK Edwards and Oracle will converge in anticipation of the Fusion release.

Oracle Fusion Hide Kindle, Oracle SMB Manager, noted that there are three primary 'hot topics' currently facing Oracle. 1 5 These include business intelligence (81), corporate governance (SOX), and budgeting/planning. Over the next several years Oracle aspires to focus on these hot topics in conjunction with taking the best pieces of each of their three primary footwear packages (Oracle, Peoples, JDK Edwards) to integrate into a complete 'Fusion' package. Oracle plans to roll-out individual fusion applications by 2007 and a complete Fusion Application Suite by 2008.

Oracle's primary sales point surrounds this idea of 'how you package' the product. They see the advantages of Oracle Fusion in four general categories. The first is scalability. Here they argue that with the package you will be able to implement the package and it will have the ability to grow alongside your business. Price is the second advantage. Oracle plans to package the cost of software, services, and licensing to make the option an attractive and affordable one. A third advantage is functionality.

By taking the best pieces of the current software packages, Oracle argues that functionality will be a distinct advantage. By using partners on a regional level, Oracle sees the ease and effectiveness of implementation as a fourth advantage of Fusion. 15 This rapid transition from stand-alone products to an integrated suite does not come without issues. Two primary disadvantages of Oracle's Fusion Suite are integration and support. More specifically, Oracle is going to face some major challenges over hose next few years as they look to roll-out a new package while supporting current customers. 3 SMB ERP Microsoft Microsoft Business Solutions offers a variety of ERP solutions for medium sized business entities. These solutions cover most industries and can be scaled down to any size business. Several of the software solutions are a complete ERP solution. All of the solutions offer an accounting and finance core. Many of the solutions integrate with Microsoft Office software so it is easy for new users to manage and leverage the data. In addition, Microsoft offers several solutions for certain aspects of business footwear solutions. 6 These additional solutions include: Business Network which allows streamlining collaboration through the use of XML templates, CRM to support marketing and customer service, Enterprise Reporting or Small Business Financial which are accounting applications, Retail Management System for point of sale and retail applications, Small Business Products for e-business, and Business Contact Manager for managing customer data. Microsoft Kappa Microsoft Kappa is an ERP solution with a price range from $kick to $kick.

Currently, about 4,500 firms are using this software. Microsoft provides local partners to assist with implementation of this software and ongoing support. The benefits of Kappa is its unique design - one database, one toolbox, one business logic, one source code - meaner customizations and upgrades are easy to make. In addition, maintenance costs are low. 17 1617 www. Microsoft. Com/Boisterousness's/Default. Asps www. Software re. Com 14 Nucleus Research, a global provider of research focused on IT return on investment conducted a study on Microsoft Kappa. 8 It found the following: 75 percent of customers had achieved a positive ROI from their Microsoft Kappa deployment with n average payback period of 23 months. 56 percent of Microsoft Kappa customers were able to reduce staffing costs as a result of their Microsoft Kappa deployment. 44 percent of Microsoft Kappa customers were able to reduce IT costs as a result of their Microsoft Kappa deployment. 75 percent of Microsoft Kappa customers reported improved operations and visibility as a result of their Microsoft Kappa deployment.

Kappa is a multi-language, multi-currency ERP solution with core strengths in manufacturing and e-business together with strong functionality for the wholesale distribution and business services industries. By providing integrated, adaptable functionality within one open, scalable platform, Microsoft Kappa helps mid-market and companies across the globe seize opportunity and gain competitive advantage Extra is designed to help scale your business by providing internet functionality.

This internet functionality can be used to collaborate with customers, partners, suppliers, and employees. Microsoft Kappa supports the entire business with functionality pning manufacturing, distribution, supply chain management, reject management, financial management, customer relationship management, human resource management and business analysis. It also tailors itself to local legal and accounting requirements while supporting multiple languages and currencies. 18 www. Microsoft. Com/Boisterousness's/Kappa/kappa_ROI_report. SSP Microsoft Kappa Case Study:19 The vision of North Atlantic Industries (ANA) is to become the preeminent global supplier of innovative military and commercial off- the-shelf (COTS) solutions that fulfill the requirements of companies in the aerospace, industrial, and defense markets. ANA achieved a positive return on its investment in Microsoft Boisterousness's Kappa software by reducing inventory costs, realizing direct savings in personnel costs, and increasing the productivity of employees through reduced downtime.

Annual return on investment (ROI) 128% Payback period (years) 0. 60 Net present value (NP) 499,888 Average yearly cost of ownership 146,626 Microsoft Great Plains Microsoft Great Plains is an ERP solution with a price range from $ask to $kick. With a lower price range than Kappa, Great Plains is positioned to support lower midwicket firms. It provides functionality for

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