Is SAP for small to medium-sized businesses? What are the options available, and how big is the market for IT consultants catering for this section of the SAP ecosystem?
This week IgniteSAP is going to have a look at the ways in which SAP provides for these types of enterprises and how understanding this area may be advantageous to SAP professionals.
To get an idea of the importance of SMEs, let us take an example of a successful economy like Germany: the vibrancy of this economy is not due solely to the contribution of giants like VW, Siemens and SAP.
According to the German Federal Ministry for Economic Affairs, SMEs (or the ‘Mittlestand’) make up 99% of companies in Germany, and collectively they account for more than 58% of jobs and more than half of the total German economic output.
Not only do these smaller enterprises make a vast contribution to the wider economy, they also support the larger corporations:
“The Mittelstand acts as a strong partner for large corporations, across the entire value chain. Mittelstand companies are often highly specialised and produce the type of up and downstream products that enable large corporations to create innovative and complex products, services and systems solutions.”
Understanding the importance of this sector of the German economy, the Federal Ministry for Economic Affairs is actively promoting digitisation: funding centres of excellence called ‘Mittlestand 4.0’ across the country. Also by focussing on supporting the introduction of communication and information technologies for SME’s, as part of a wider European drive for digitisation across all sectors: Industrie 4.0.
According to Statistica, small companies of 10 – 49 employees, and medium-sized companies of 50 – 249 employees collectively added 691 billion to the German economy in 2018.
Naturally, as 90% of the world’s businesses are SMEs, SAP is well aware of the crucial importance of SMEs, and has been providing ERP solutions for this sector for decades, but because SAP promotional campaigns and business journalism focusses at the very top of the hierarchy of corporations, this perpetuates the idea that SAP solutions are primarily for the largest corporations.
While SAP certainly does work well as the functional foundation of larger corporate business processes, they also have a variety of solutions aimed at small businesses which it is worth looking at.
Many IT professionals are used to working for the large Systems Integrators on long projects for big corporations, but there are also freelance IT consultants, and those looking for shorter contracts in between longer projects, who may well be asked to implement some of these options provided by SAP for smaller to medium-sized businesses. As the cost of digitisation reduces, more and more SMEs are looking to take advantage of SAP solutions, and so this section of the SAP ecosystem is becoming increasingly important to IT consultants specialising in SAP.
The all-in-one solution for a smaller company: SAP Business One allows customers to manage ‘accounting and financials, purchasing, inventory, sales and customer relationships to reporting and analytics’.
SAP Business One is available in 28 languages, and runs all business processes. Implementations are deployed on-premise or in the cloud, and it runs on the SAP HANA and Microsoft SQL databases. The software is designed to scale up easily in line with an expanding business.
SAP recommends using an accredited SAP Business One implementation partner. As with other System Integrators, the role of these partners is to assist the customer analysing the existing business and its needs, then sharing best practices which are relevant to those needs, and formulating a blueprint for the transformation project with stakeholders.
At this point, as a IT consultant working for an SAP accredited partner, and tasked with implementing SAP Business One, you would be working as part of a team to realise the agreed blueprint and roadmap, educating end-users before and after the go-live, as well as providing support or signposting support after the formal implementation is complete.
Business ByDesign is SAP’s fully functional cloud-based ERP for SMEs which operates on a SaaS basis. It allows users to get a business running quickly, which is extremely desirable as 20% of businesses fail within the first year (according to Forbes). The second most commonly cited reason for that failure was because they did not have enough capital to operate, so getting up and running quickly and bringing in operating capital is paramount.
SAP used Business ByDesign to road test the concepts of cloud ERP and SaaS over ten years ago so it is now well advanced in its own evolution.
Business ByDesign sits in the middle tier of SAP’s hierarchy of offerings with Business One below providing for the smallest SAP customers, and S/4HANA Cloud and its associated products like Rise with SAP in general providing for larger corporations. There are plenty of exceptions to this rule as the needs and context of the business determine which solutions are required.
In comparison with the entry-level SAP Business One, ByDesign is fairly complex, providing some options for what best suits the needs of the business, and with some quite sophisticated features, but most importantly it is more comprehensive so that the pre-configured options can cover the necessary business processes from end-to-end.
Other advantages that contribute to the popularity of SAP Business ByDesign include the fact that, as a SaaS product, it is updated quarterly and this often provides new functionality, and that it supports industry-specific workflows.
SAP lists 286 official accredited partners from all areas of the world offering Business ByDesign services so there are plenty of potential employers if you are interested in working in this expanding area of the SAP ecosystem.
When mid-level businesses are looking to scale up their enterprise and expand into new lines of business, then they can implement Rise with SAP. The scalability comes from the fact that Rise is cloud-based, so it is easy to assign greater cloud infrastructure resources when necessary.
Using SAP Signavio business process intelligence, customers implementing Rise with SAP are able to evaluate the existing business processes against industry benchmarks and see where there is room for improvement.
The Rise platform also gives access to the SAP Business Network, including SAP Ariba, which means they have access to the world’s largest business network. In this way customers looking to expand from a small or medium size can find the partners they need from a huge selection, all of whom are running SAP solutions and so can share supply chain or logistics information in real time.
Rise with SAP is being augmented by the worlds biggest SIs (like Accenture, Atos or IBM) offering complimentary services for implementation or for industry-specific applications, so there are a great deal of associated career opportunities being created as it is adopted by customers. The SaaS aspect means that there will be further opportunities for IT consultants as companies adjust their requirements from Rise after the initial adoption project.
Some commentators have pointed out that Rise with SAP is better suited to smaller businesses than larger ones, in that the offering is intended to simplify complex business software environments into one cloud-based integrated environment. Because of this SAP can expect a great wave of adoption as Rise is taken up by more and more smaller businesses.
Consequently those IT consultants looking to take advantage of the mass adoption of Rise will do well to ensure they have global certification in associated components of Rise like SAP Signavio and SAP Business Technology Platform, as well as S/4HANA cloud qualifications.
While the majority of IT consultants specialising in SAP would be expecting to work for major SIs like EY or PwC, or SAP themselves, on projects for multinational corporations, the demand for skilled SAP professionals from smaller businesses is growing exponentially: as the cost of SAP solutions for smaller to medium-sized companies reduces, and the need to compete and react with agility to macro-economic events like lockdowns and wars grows.
The key facts to remember, that often get overlooked are that the SME/SMB economic sector makes up 90% of the worlds economy, and that although ERP software was initially targeted at larger corporations, new platforms and offerings are making it far more accessible.
With this change in the structure of the ERP IT services space comes two benefits for the IT consultant: firstly, more businesses requiring skilled practitioners, and second, with the developing skills gap, the amount these business will be willing to pay as a proportion of their working capital to make the most of the benefits of modern SAP solutions will go up, as the affective application of SAP technologies can dramatically increase their own revenue, and they won’t want to be left behind.
Are you a skilled SAP practitioner? Do you have global certification for SAP solutions?
Get in touch with IgniteSAP, and our team with be happy to share some of the amazing opportunities open to you.
