SAP Who? Inside One of SAP's Smallest ERP Customer Success Stories

Artisan Hardwood Floors, a 37-employee company in Central Texas, doesn't look like a typical SAP buyer. But its decision to purchase SAP, and its experience so far, illustrates the promise and peril for SAP and rivals Oracle and Microsoft as they go after the small business ERP market in a big way.

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Today, he says, he can see Artisan's financial and operational picture "much clearer than I could before. Am I where I want to be? Not yet. The big thing for me is: the information is being put into the system." In addition, "at any point of time, any person can walk up to a station, log in, get a phone number, fax number, account balance, get an agent report—anything like that," Bailey says. "That's what I was shooting for, and I succeeded."

What's also interesting about Bailey's decision-making process: Microsoft did not win out. Microsoft often wins ease-of-use comparisons, simply because everybody knows Office. That familiarity, in turn, is giving Microsoft an advantage as it continues to market and roll out its SMB ERP and CRM product lines, called Dynamics.

Bailey says he considered the Dynamics ERP product set as well as several other vendors' offerings, but for the staffers that would be using the new system, the BusinessOne software offered the easiest training environment. "Because I had to educate a lot of non-technical people about a system, I wanted to do it in something that was easy to learn," he says. "BusinessOne is just too easy to navigate."

SAP's Mission: 100,000 Customers

SAP's ultimate and oft-stated goal is to get to 100,000 customers by 2010, and the SMB market and more user-friendly BusinessOne suite is an important piece of the plan. "Already 21,000 of our more than 37,500 worldwide customers are SAP Business One customers and we expect to see a very strong contribution from SAP Business One in achieving our goal of 100,000 overall customers in 2010," Hume says via e-mail. She also notes that 40 percent of U.S. SMB customers have fewer than 25 employees.

Warren Wilson, a research director at Ovum, notes that in targeting companies with 10 to 100 employees, SAP is tapping what is largely a "green field." Most companies that size don't have an integrated management solution and are using manual paper-based processes or Excel, so an easy-to-use, integrated and cost-effective application set would be most welcome, as was the case at Artisan.

Wilson also points out that Oracle doesn't target companies that small; its mid-market efforts reach down only to companies of about $30 million in revenue or larger. In addition, while Microsoft does target the smaller segment, "it's growing fast enough and is so under-penetrated that SAP, Microsoft and other smaller players can grow customers and share without really bumping into each other much."

Though Bailey's opinion and experience is just one among thousands of companies that are buying enterprise software these days, it's telling for the big industry players who continue to battle for the SMB sector.

Does Bailey consider himself a techie now? His hedged answer reveals both the opportunity and the cost of technology at small businesses. "Yes and no: Yes, because I know it better than anyone here and a lot of people, I think, that are in my position," he says. "And no, because there are 5 million things I've yet to do with it yet. I have not come close to meeting its capabilities."


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