The ERP battle: SAP vs SAP

Just as we increasingly see Microsoft meet Microsoft (Business Central against for Finance and Supply Chain) in selection of ERP systems, we see that SAP meets SAP, and then in the battle of Business One against Business ByDesign.

SAP Business One was launched by SAP already in 2002 after an acquisition of the Israeli software TopManage, which was later repackaged into an SAP product. The aim was to create an application aimed at small and medium-sized organizations, as a result of the product R3 (later Business Suite) becoming too complex to be sold to smaller organizations. There were a lot of functional and technical problems with Business One in the previous years, but SAP soon got this in order, and internationally, the software has since become widespread. HerbertNathan & Co paid a visit to Walldorf in 2012 to get an in-depth presentation of the product directly from their development center, and we found that SAP invested huge resources in the software. And globally, Business One today has +65,000 customers and is one of the most widespread ERP systems in the world and translated into +30 languages. The Scandinavian launch took place with extensive marketing during the years 2006-2008. However, the result was meager and during the following 10 years, relatively few customers chose SAP Business One in the Scandinavian countries. The reason cannot be attributed to the software but was rather a consequence of SAP itself not having the experience of working with small customers or partners who only focused on small customers. And this is a lesson that SAP had learned when SAP Business ByDesign was launched.

SAP recognized the trend towards cloud-based systems quite early on and announced as early as 2007 that it planned to develop and move towards cloud-based systems within a 10-year period. The very first official version of the completely newly developed product SAP Business ByDesign was launched in a limited edition in 2011 and has since grown significantly in scope. Today, the product is translated into 12 languages and available with partner country versions for +70 countries. The product has +4,000 customers in the world and sales are currently increasing at a high speed. The launch was delayed for the Scandinavian market until 2017. And unlike Business One, which still has few local partners in Sweden, SAP Business ByDesign has in a short time gained almost 10 local partners and also a very strong backing from SAP.

Although the older Business One can now be offered as a cloud service, it is basically a system developed for local installation. Business ByDesign, on the other hand, has from start been developed to be offered as a public cloud service. Leaving aside the delivery model, both applications are developed and adapted to take advantage of the HANA platform and its extensive library of smart services and intelligence.

As a partner of Business One and Business ByDesign, you have access to development tools to be able to build additions and adaptations for the individual customer. A prerequisite that will be mandatory for all major cloud-based systems in the future. Even though all customers strive for standard systems, there is often a need for unique modifcations in order for the individual customer to be able to utilize their unique competitive advantages as an organization.

In terms of licensing, SAP offers its application Business ByDesign with a lower limit of at least 15 simultaneous users, which today becomes an obstacle for the smallest organizations. Business One, on the other hand, can be sold to customers with very few users. What speaks for Business ByDesign is SAP’s model for offering a pre-configured product which means that it is possible to implement Business ByDesign with a very limited consulting effort (rather few consulting days) compared to other business systems (Ex Microsoft, Jeeves, IFS, Epicor).

In terms of functionality, the applications have a lot of similarities and can be perceived by many customers as relatively comparable when it comes to process coverage. Both applications offer extensive functionality for small and medium-sized customers. However, SAP Business ByDesign has functionally passed Business One and offers more developed process support for, for example, sales, logistics and manufacturing compared to Business One. And if we look ahead, there is no other logic than Business ByDesign will distance itself in functional breadth and depth compared to Business One in the coming years and it also increases the probability that customers of SAP Business One will be offered a transition to Business ByDesign which is also a modern and genuine cloud solution.