SAP updates Business One application for small companies

IDG News Service - SAP on Thursday announced a version of Business One, its ERP (enterprise resource planning) suite for small companies, as it revs up the marketing strategy behind its Business ByDesign on-demand suite.

Business One 8.82 features a range of improvements, including an expanded CRM (customer relationship management) application that allows companies to develop and manage multichannel marketing programs.

Other features target inventory and distribution, such as a simplified "pick and pack" process for order fulfillment that allows users to apply serial codes and batch numbers to specific items; improved long-term business planning functionality; and an "express" configuration wizard.

SAP has also added a number of capabilities to the systems MRP (material requirements planning) module, including a better wizard and improved forecasting functions.

Business One is targeted at companies with 10 to 100 employees, while Business-All-in-One, which is essentially a packaged subset of SAP's Business Suite enterprise product, is aimed at companies with 1,000 to 2,500 workers. Both are available in hosted or on-premises form.

But the emergence of Business ByDesign has prompted some questions about the market segmentation of the three products, as well as how SAP would sell ByDesign without cannibalizing Business One and All-in-One sales.

SAP this week said it is on track to land 1,000 ByDesign customers by the end of the year, and has about 650 so far. The average deployment per customer has been about 20 subscription seats, co-CEO Bill McDermott said in an interview this week. But SAP is about to aggressively push ByDesign to its large customers as something to use in new subsidiaries or offices. That will result in deals for "thousands of seats at a time," McDermott predicted.

One thing seems clear: SAP has no intentions of phasing out Business One, having published a development road map that looks out as far as 2014.

But there are still some questions to raise going forward, said Forrester Research analyst China Martens via e-mail.

"I wonder how small to mid-size ERP prospects now look at what SAP offers. Do some of them who previously would have adopted Business One now also look or only look at ByDesign?" she said.

"It's interesting to note one of the focus areas in the latest version of Business One is on the MRP side," she added. "I wonder whether user choice between Business One and ByDesign will eventually be more about where each product offers specific built-in vertical support. For now, ByDesign's focus in that area is professional services, with wholesale next up in [version] 4.0."

However, overall "it seems like SAP has made its peace with having something of an overlapping product portfolio in the SMB space and now puts less focus on drawing user limit boundaries around Business One, ByDesign, and Business All-in-One," Martens said.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is Chris_Kanaracus@idg.com