More than a year after the product was first launched, SAP has finally announced its first Business One customer in Canada.
Mini-Tankers is a Vancouver-based company that provides on-site diesel refueling services. It has begun
rolling out the ERP solution for small to medium-size businesses, beginning with financials.
First presented in the spring of 2002 at SAP’s annual user conference, Sapphire, Business One is targeted at companies with 10 to 150 employees or revenues as low as $1 million. At the time of launch, SAP president Hasso Plattner said the software was for SMBs or the remote offices of large companies that would not typically have access to information held in a central location.
Mini-Tankers has 120 employees and more than 4,000 customers across Canada with projected revenue of $70 million this year.
The company has experienced rapid growth in the last few years, and expects to pump 130 million litres of fuel this year (compared to 1.8 million litres a year in1995). The company currently processes over one million transactions just on its sales side annually.
“”The mix of clients we have include those with one piece of equipment requiring 200 litres every month versus clients that have over 300 pieces of equipment in their fleet,”” said Joe Valeriote vice-president business development at Mini-Tankers.
Last year the company’s growth spurt and the multitude of transactions the company processes in doing business prompted company CFO George Murray to reconsider the company’s business process systems.
The SAP Business One software for Mini-Tankers’ financial systems should be in place by the first quarter of 2004, says Murray. The product offers ERP on a smaller scale including sales force automation, financial management with multi-currency functions, budgeting, inventory management and a reporting module that allows access to all data.
“”What we were finding is our existing technologies were having difficulties keeping up with the pace of the growth and we didn’t have an integrated platform,”” said Murray. “”We were looking for something that could integrate all our business processes onto a common platform and provide for long-term scalability. Initially we looked at Great Plains as an entry but SAP changed our strategy. We were really impressed with the ability to integrate with third party external users,”” he said.
SAP acquired the Business One product a year and a half ago from Israeli company Top Manage Financial Solutions.
“”Before we had Business One there was no way a company of $10 million could think of becoming an SAP customer except for rare circumstances. So the plan was to design a new product to go after market with a product made specifically for their needs,”” said Michel Vincent, vice-president of SMP for SAP Canada.
SAP Business One has 1,600 customers worldwide. Vincent said SAP has taken its time making sure features in the software that are unique to the countries in the “”second wave of the rollout — such as Canada, France, Spain and Italy — are all in place.
“”We needed to localize the product. Each country has its own requirements and we have to follow the tax requirements, accounting rules and all of this. Instead of launching a product that doesn’t fit anywhere the company decided to invest in localizing the product,”” said Vincent.
“”SAP is very careful when we launch a product that it works. We’re not the kind of wheeler-dealer who goes out with a product and it’s not tested and the functionality isn’t there. When we go to market it’s because we have something we can sell that can work right now.””
However, analysts suggest it was also because the vendor needed to establish the proper channel partners to get the product to market — something SAP has not had to rely on in the past as it sells directly to its large enterprise customers.
“”I think SAP had some reservations about quickly rolling out Business One because they are so strong in the really big enterprise accounts but not SMB. In the past they have never focused on building out the infrastructure in terms of channel to reach the customers below those really big enterprise-class customers,”” said Warren Shiau, software analyst for IDC Canada. “”They (customers) need some sort of point of contact for service and implementation.””
Vincent agreed SAP did need some time to set up a channel of resellers to handle the Business One product with national coverage.
“”Selling to companies of that size is new for us so we need partners that have the experience of working with that kind of customer, that understand their need, speak their language, understand their pain. What we needed was the complimentary expertise of the people well-rooted in the SMB space,”” said Vincent.
Shiau said it will be difficult for SAP to unseat traditional SMB vendors such as Accpac, Microsoft or Intuit.
SAP currently has about a dozen resellers across the country selling the Business One product including Vaughan-based The RAM Group Inc., and Markham-based Concentrix as well as BMD Inc. in Montreal and EPIC Information Solutions in Winnipeg.
But Vincent says the target is not to have 200 resellers. “”We’re not looking for volume, we’re looking for quality partners and we want to develop those partners,”” he said.
That is the right approach says Shiau. “”It’s intelligent if you’re thinking about this in terms of customer satisfaction to limit the number of resellers you have and make sure all those implementations go well,”” he said.
But if they want to tackle the wider market that includes a huge number of Accpac customers, Intuit customers and Microsoft customers Shiau says SAP will at some have to start making plans to go beyond that limited set of resellers.
Mini-Tankers had been using a legacy system as well as Great Plains and ACT with a customized SQL backend.
The company’s legacy system handles its credit collections and invoicing and billing function, which runs on an Informix database. The Great Plains system handles all financials and a CRM sales management system was developed using parts of ACT.
“”We developed a customized sales management system which has a customized pipeline sales process developed on a SQL backend and we’re looking to integrate all those applications into an integrated backend using SAP BusinessOne,”” said Murray.
Eventually, Murray says the company will replace both Great Plains and the other applications with SAP BusinessOne software.
Mini-Tankers expects the toughest aspect of integration will be making Business One work with its mobile technologies. All of the company’s vehicles are equipped with onboard computer systems and interface with the servers at the head office. Other integration points will include the company’s bank and some of its large fuel suppliers such as Shell.
The starting price for Business One is $10,000.