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SAP Business ByDesign First Glimpse

While attending the Omni-Channel Retailing summit in New York, I was fortunate to get a first glimpse of the just announced SAP Business ByDesign hosted solution (formerly code-named A1S). SAP made the splash announcement on September 19 at a press and analyst conference in New York - which happened to be the same time as Salesforce.com's Dreamforce user conference and only a day after NetSuite announced that Asahi Kasei Spandex America had replaced SAP R/3 with NetSuite's on-demand ERP system.

SAP CEO Henning Kagermann made several lofty comments, including "It's not just a new product for us ... It's a new era for SAP", seemingly to try to convince the many doubters that this new hosted solution lacks true competitive advantage and is little more than a defensive tactic intended to slow the erosion of clients to salesforce.com, NetSuite and Aplicor.

The Business ByDesign software breadth seems to be it's most competitive value and includes:

  • Financial management (aka accounting software system)
  • Customer Relationship Management (CRM)
  • Human Resource (HR) Management
  • Supply Chain Management (SCM)
  • Project Management (I was unable to determine if this includes job costing)
  • Supplier Relationship Management
  • Compliance Management
  • Executive Management Support (seems to be Business Intelligence)

Peter Zencke of SAP's executive board indicated the on-demand software product is intended for prospects with between 100 and 500 staff, moderately complex business processes and moderate transaction volumes. He also indicated the hosted product may be complimentary with SAP's other SMB (Small and Midsize Business) solutions Business One (intended for companies of less than 100 employees) and SAP Business All-in-One (designed for companies with between 100 and 2,500 staff).

Presumably to prevent Business ByDesign from cannibalizing the company's flagship product and cash cow, CEO Kagermann made it a point to demonstrate that the Business ByDesign was not designed as an ERP (Enterprise Resource Planning) software suite and is instead organized around business processes typically found in smaller companies. Per Kagermann, "We have not designed it with these traditional categories in mind like CRM, ERP, et cert era." Also by design, the hosted product offers no upgrade path to the company's on-premise software product.

Under the hood, the software technology is by and large far superior to SAP's flagship product. Business ByDesign uses a Service Oriented Architecture (SOA) and of course the (proprietary) NetWeaver development framework.

I'm unclear as to the fate of SAP's first introduced hosted CRM solutions, SAP Sales On-Demand (released in February 2006) and SAP Marketing On-Demand (released in May 2006). It's no secret that these hosted CRM software products haven't taken off nor fared well against the more traditional software as a service CRM competitors.

At the time of the new hosted product announcement, there were 20 customers involved in a beta-type testing of the software. As with most new product announcements, the product is not yet available and is expected some time in 2008. U.S. pricing starts at $149.00 per user per month.

crm blog
SAP Posted: Friday, September 19th, 2007
Under: SAP

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