Published
Author
Just as we increasingly see Microsoft face Microsoft (Business Central against Finance and Operations) in procurements of ERP systems, we see SAP face SAP, in the form of Business One against Business ByDesign.
SAP Business One was launched by SAP already in 2002 after an acquisition of the Israeli product TopManage which was subsequently repackaged as an SAP product. The aim was to create a product aimed at small and medium-sized organisations, as a result of the R3 product (later Business Suite) becoming too complex to be sold to smaller organisations. There were quite a few functional and technical problems with Business One in its early years but SAP soon got this under control, and internationally the product has since gained wide distribution. HerbertNathan & Co themselves made a visit down to Walldorf in 2012 to get an in-depth presentation of the product directly from their development centre, and we noted that SAP invested enormous resources in the product. Globally, Business One today has over 65,000 customers and is one of the most widespread ERP systems in the world, translated into about 30 languages. The launch in Sweden took place with extensive marketing during 2006-2008. However, the result was meagre and in the following 10 years relatively few customers chose SAP Business One in Sweden. The blame cannot be placed on the product but was rather a result of SAP itself not having experience working with small customers or partners solely focusing on small customers. This is a lesson SAP learned when the new SAP Business ByDesign was launched.
SAP realised quite early the trend towards cloud-based systems and announced as early as 2007 that it planned to develop and transition to 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 around 2011 and has since grown substantially in scope. Today the product is translated into 12 languages, with coverage for about 40 countries regarding localisation. The product has over 4,000 customers worldwide and sales are currently increasing at a very high rate. The launch for the Scandinavian market was delayed until 2017-2018. And unlike Business One, which has very few local partners, SAP Business ByDesign has within a short time gained almost 10 local partners and also very strong backing from SAP.
Even though Business One can now be offered as a cloud service, it is fundamentally a system developed for on-premise installation. Business ByDesign, on the other hand, is developed to be offered as a public cloud service. Apart from the delivery model, both products are developed and adapted to utilise the HANA platform and its extensive library of services and intelligence.
As a partner to Business One and Business ByDesign, one has access to development tools to be able to build extensions and customisations for the individual customer. A prerequisite that will become mandatory for all major cloud-based systems in the future. Although all customers strive for standard systems, unique additions often arise to allow the individual customer to utilise their unique competitive advantages as an organisation.
In terms of licensing, SAP offers its Business ByDesign product with a minimum of 15 concurrent users, which today is a barrier for the smallest organisations. Business One, however, can be sold to customers with very few users. What speaks in favour of Business ByDesign is SAP's model of offering a pre-configured product which means that it is possible to implement Business ByDesign with a very limited consulting effort (a few consultancy days) compared with other ERP systems (e.g. Microsoft, Jeeves, IFS, Epicor).
Functionally, the products have quite a few similarities and can be perceived by many customers as relatively comparable when it comes to processes. Both products offer extensive functionality for small and medium-sized customers. However, SAP Business ByDesign has functionally surpassed Business One and offers more developed process support for, for example, sales, logistics, and manufacturing compared with Business One. Looking ahead, there is no other logic than that Business ByDesign will pull away in functional breadth and depth compared with Business One during the coming years and this also increases the likelihood that customers of SAP Business One at a future date will be offered a transition to Business ByDesign which is also a modern and genuine cloud solution.
