SAP's Business ByDesign go to market

SAP's Business ByDesign go to market

Summary: One of the niggling questions about SAP's Business ByDesign is just how the heck it is going to reach the numbers it says it wants to achieve. 10,000 new customers a year by 2010, many coming from this market, is ambitious.

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TOPICS: SAP
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One of the niggling questions about SAP's Business ByDesign is just how the heck it is going to reach the numbers it says it wants to achieve. 10,000 new customers a year by 2010, many coming from this market, is ambitious. To date, SAP has been fuzzy about how that will work. Brian Sommer, one of my Irregular colleagues doesn't think it's as hard as some of us believe. In a new report entitled: The Market for SAP Business ByDesign, Brian argues that:

For almost a decade, the Software Intelligence unit within Accenture (nee Andersen Consulting) studied the application software marketplace annual replacement rate. Much of this analysis covered the years 1988-1998. The conclusions from this work were quite compelling. For example, in the worst years ever, approximately 4% of the installed base of application software would still be replaced. Further analysis indicated that these replacements were often dictated by significant growth or contraction of businesses in the marketplace. When firms outgrew their initial systems (e.g., QuickBooks), they required a new and more robust system. Likewise, when companies experienced a significant reduction in size and scale (e.g., divestiture), they, too, would need new systems.

Whether the cause is organic or inorganic change, some percentage of the application software market is always buying in a given year.

Brian estimates that at any one time, of the 600,000 businesses SAP believes are up for grabs, the worst case scenario is that 24,000 will be ready to switch in any one year. Given that according to eWeek, Oracle's CEO Larry Ellison has left the field clear for SAP, all would appear to be set fair. But it still leaves the tiny matter of execution. For this, you have to look to what SAPpers are saying.

Hamish Newlands, a SAP consultant based out of Geneva and one of those used to big ticket deals has this to say in a blog post intriguingly entitled SAP Had Decided to Stop Polishing the Turd:

I have been looking at Business byDesign in SAP, and have expressed some reservations about the fact that it:

  • Requires a totally (or at least substantially) different sales model for the SME market
  • Requires different implementation and support approaches
  • Potentially cannabalises and changes the business model of SAP.

At first I thought "neh, bad". Then I read Hugh's [MacLeod] post, and thought, "Aha. Change the World or Go Home." I grok the intent now, SAP is stable, big, and we could profitably polish the turd for ever. Or we could disrupt the whole market, change it, and win that game instead, even if it is different from the one we have now.

Even so, intent will not take you far. I caught up with Steve Mann, who has been working on designing the customer experience end of BBD. I was curious to discover what he meant in a blog post The Customer Experience Strategy for SAP Business ByDesign where he says:

We recognize that in order for SAP to be successful in this market, customers must be in control of the buying cycle and that the notion of a "sales cycle" evaporates out of the SAP vocabulary. So our customer experience strategy is a simple one but difficult to execute given our corporate DNA:

  1. Put the customer in control - of the content they desire, the community he/she wishes to join, the product he wants to touch and feel. Make it a DIY experience with support as needed.
  2. Provide a free personalized trial - not a generic demo system the way Netsuite does it but a real, honest to goodness complete system, that I can tailor to my needs and then take into production seamlessly
  3. Be credible - recognizing that in some instances customers don't view us as credible, therefore we need to enable them to speak to peers by implementing web 2.0 capabilities throughout the buying cycle to help empower customers to make the right decision for themselves
  4. Implement a volume machine - again, not easy given our heritage but from my vantage point within SAP, the company is moving mountains to drive change. But this machine should enable an Explore-Evaluate-Experience shopping experience for each and every individual who wants it, focused on their moments of truth which enables them to move thru their buying process with ease.
  5. Know our customer's needs and be proactive about it - understand who they are ensure they get the information and support they need without the Marketing Speak. We joke about a 12-step program for SAPaholics - in order to rid oneself of SAPanese. That effort is actually underway with a lot content tonality training because as I've said here... content sets the context of any experience.

Whoa tiger. Marketing speak aside, that's a huge ask and short on detail around content creation. In our conversation, Steve rationalized the situation:

Customers think our content sucks. We're just not credible. We've done a great job of creating technical influencers at SDN and BPX but we're missing the peer to peer business people who will tell the story for us vofr Business ByDesign. We are therefore piloting a business network during Q1 2008 we hope can be built organically.

Rather than focus on blogs, SAP will use forums. Hmm. But then as Steve says, Twitter (which might also become part of the communications toolkit or some derivative,) is like an unthreaded forum. In Steve's view, forums are a better way to go because they encourage the rapid response rate SAP believes will fuel their go to market execution plans. That's smart. SAP will use similar tools to those developed to drive the 900,000 strong SDN community reasoning that SDN is a proven model.

This is still a tall order and if my most recent experience in community building is a guide, the strategy is tough to execute upon. Steve knows this. Finding evangelists among customers prepared to rave about SAP and keep stoking the community will require a huge kick start effort. If executed well and considering Brian's earlier comments about market size, it might just work.

Topic: SAP

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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