Small Ontario firm gains sizeable benefits with SAP rollout

When Ray Corbeil was hired by a 150-employee gold mining business in Northern Ontario to select and deploy enterprise resource planning software, he didn’t expect to consider SAP.

The director of cost management and administration at Timmons-based St. Andrew’s Goldfields Ltd. thought of SAP software as something a much larger enterprise would use.

But when he did take a look at it, he was surprised to see it was more affordable than he’d thought.

“We were looking for not just a financial core, but materials managing, payroll system, maintenance, human resources, that sort of thing,” Corbeil recalls.

He said SAP’s Business All-in-One software covered all those bases in a single implementation.

Using Markham, Ont.-based Illumiti, an SAP channel partner, the mining company was able to rollout 30 licences of the software for $300,000. That included one year of software maintenance and some non-SAP related costs.

SAP has been funneling investment into a product that suits mid-sized businesses, says Jamie Fryer, vice-president of Illumiti.

“It’s the same software that the large businesses use,” he says. “The difference is that you can buy the accelerator.”

Business All-in-One can be customized with templates that tailor the software for specific geographies and industries. For example, a Canadian template adjusts the software to take into account the federal and provincial tax structure. That means small companies are saved the costly step of customizing the system.

The accelerators — also referred to as “templates” and “best practices” by SAP — are a major part of the software company’s strategy to win over the business of small firms. There are more than 100 different templates available in the partner community, explains Conrad Mandala, vice-president of SME division at SAP Canada Inc.

“If I can do a pre-configured, out-of-the-box solution covering about 80 per cent of the implementation, the time to value for our customers is dramatically shorter,” he says. “We can then take the time we’re doing our implementations and focus on the 20 per cent that is unique.”

SAP has legitimately changed its business approach over the last five years, says Nigel Wallis, research director application solutions at IDC Canada. The company was a direct seller to large enterprises just five years ago, but now is working through channel partners to sell to the smaller markets. They’ve found the sweet spot for selling to firms of 250 to 1,000 employees.

“In Canada, we have lots and lots of small companies,” he says. “Now SAP is a viable option for these companies.”

SAP’s competitive price in the smaller market is not so much in the licencing cost, but in the other associated costs of implementing an ERP system. The amount of functionality, the maintenance needed for the software, and the training of people who use the software.

“It used to be that your implementation time for SAP was not months, but years,” Wallis says. “Now that SAP is doing it in months or weeks, that really lowers the total cost.”

Corbeil finished phase one of SAP’s implementation Jan. 1. The financial system, including a general ledger, accounts receivable, and accounts payable, is at the core of the software.

The module helps to streamline purchasing and approvals, Corbeil says, and can be used to make purchase and materials requisitions.

In a discussion roundtable organized by SAP, journalists and analysts heard from several small enterprise clients that told similar stories about implementing Business All-in-One software. Each client was surprised at the competitive price, and each found the templates adequate enough to apply to their own business processes.

SAP’s shift to also cater to smaller firms was prompted by the 2008 recession, says Mark Aboud, president and managing director of SAP Canada.

“The economy slammed, and we got slammed with it,” he says. “But now things are looking up. Our customers are coming out of the recession and looking to make that investment they’ve been putting off.”

SMEs have been actually been targeted by SAP directly for five years, Aboud adds. About 60 per cent of SAP’s clients are defined by the software company as SMEs.

At St. Andrew’s Goldfields, phase two of the SAP rollout is about to begin. It will start putting in place the maintenance, human resources, and pay roll modules.

“From a maintenance perspective, SAP is very strong,” Corbeil says. “The system allows you to put a lot of parameters in to achieve preventative maintenance. It’s a bit of an art, and the software allows that capability.”

The secret to that art? Corbeil says it is to delay maintenance as long as possible, but not so long that your equipment breaks down and won’t run.

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