SAP Business ByDesign gains ground in small firms

AngelNews and Renew are examples of SMEs taking the plunge with the on-demand ERP tech...

SAP is starting to ramp up the number of customers using its Business ByDesign on-demand ERP system, with a number of smaller businesses experimenting with the technology.

Private business and investor news service AngelNews and recycling and communication terminal maker Renew are both in the early stages of using Business ByDesign.

Business ByDesign on-demand ERP is starting to be used by some of the smallest companies in the UK, according to SAP
Image: SAP

In terms of number of employees, AngelNews and Renew are smaller than the organisations targeted by SAP as potential Business ByDesign customers, but both feel the technology suits their needs.

Founded five years ago and currently employing 10 people, AngelNews provides news about companies "that go from nowhere to somewhere very quickly", according to CEO Modwenna Rees-Mogg. It also covers events that bring private business people together with investors.

AngelNews has been using the CRM part of Business ByDesign for five months and is considering implementing the finance and project-management modules of the technology.

Rees-Mogg said she decided to opt for Business ByDesign rather than another on-demand CRM technology after speaking to friends running similar businesses, who told her that other systems often don't work as expected, have low levels of user engagement and take significant time to implement.

Because the technology is online, Rees-Mogg can see what's going on across the business without everyone having to be in the same office all the time.

It also takes some of the maintenance strain away from the small workforce in terms of running IT. "I'm not a techie person [and] it's not an area I want to go into, so I wanted a system that I could just grow into and for someone else to do all the work for me," Rees-Mogg said.

She added that using the system should mean the company can save money, as it will avoid the need to employ extra admin workers for certain tasks, saving between £20,000 and £30,000 per role.

One of the challenges of using Business ByDesign has been making salespeople engage with it, although Rees-Mogg said this issue may be more to do with the way sales teams work rather than any shortcomings with the technology.

Another attraction of Business ByDesign is its potential scalability, which Rees-Mogg said would help AngelNews as the business grows.

"I don't want to have some sort of transfer of implementation in three years' time just because I've suddenly got 50 staff. I've deployed it much earlier than some [companies would] but I can see how this will absolutely help me get to those 50, 100, 200 people - it would be much, much harder without it," she said.

While SAP's reputation has been built with larger enterprise-type customers, Rees-Mogg said this fact was actually...

...an attraction for her business, which is looking to grow in the future.

"One thing that really sold it to me was when I heard that SAP has all these really cool big customers that are big brand names, I thought, 'Do you mean they're giving me the sort of system that's just like the one Coca Cola and Apple have?'. I want to be a really big company one day so why wouldn't I want to use the sort of system that people like that do? Why wouldn't I try and go with the people who are servicing those enormous corporates if I possibly can? It's like being given the chance to drive a Jaguar rather than what I do drive, which is a Ford Fiesta," she added.

In contrast, Renew CEO Kaveh Memari said SAP's reputation for working with larger companies actually led to some resistance in his company, due to concerns about how investors would view the use of technology deemed more suitable for bigger organisations.

"I can say the SAP decision was not a popular decision on my board. It was one of those few things that I hope in time I'm going to be proved right on," he said.

Renew has developed an on-street information and recycling terminal and has a contract with the City of London to install the first 200 units in the area, commencing in June 2011 and extending to 2024.

The company is also talking to New York City Council about locating the terminals in lower and mid-Manhattan and is also in discussions with Singapore and Tokyo.

Renew is using the CRM and accounting elements of Business ByDesign as well as inventory, which is particularly useful for managing more than 100 parts of each terminal, which often have 30 to 40 components each.

Despite reservations from the board, Memari pushed for SAP as he felt it was the best option considering Renew's multiple cost centres and the geographies it now operates in.

He added that the importance of cash flow for businesses that are just starting out was also a factor. "An ability to understand what is going on right now to your various cost points as you try to expand your business... is quite a critical function to a business," he said.

Memari admitted it will take time to find out if the adoption of Business ByDesign has been a good decision but he feels SAP will be able to solve any issues that are thrown up.

"There are much cheaper ways to do things than use SAP - you can get all your other systems elsewhere. Having said that, the cost of trying to understand what they all mean is significant in time and also who does what and when and how does this affect the overall picture – you really need to understand it [and] that has cost implications as well."

Since the release of Business ByDesign Feature Pack 2.5 in July last year, the company has increased the number of UK customers using the technology by 120 per cent – 20 per cent more than it was aiming to.

According to SAP's UK head of Business ByDesign, Ian Anstey, the company acquired as many customers in the first six weeks of 2011 as it did in the first six months of 2010.

SAP will unveil sales, travel and business expense and HR applications based on Business ByDesign as well as an online application store at the CeBIT technology expo in March, as it attempts to build an ecosystem around the platform.