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It's ByDesign: User says cloud-based ERP software is right-sized SAP suite

Despite skepticism from experts, companies large and small are finding SAP Business ByDesign to be a good mix of extensibility and convenience.

Like a rumor about a random celebrity's death, reports of Business ByDesign meeting an untimely demise are greatly exaggerated. It may not be as glamorous as SAP's offerings for large enterprises, like the splashy rollout of S/4HANA, or as exciting for channel partners selling to small enterprises, like Business One. However, for midsize and small enterprises, ByDesign may prove to be the baby bear's porridge of ERP software: just right, according to experts.

SAP has been positioning Business ByDesign as the cloud ERP for upper midmarket enterprises, although its customers include large installations like the Australian government and smaller companies like the beauty company Living Proof, which is based in Cambridge, Mass. Part of ByDesign's appeal may come from its foundation as a full suite that includes financials, human resources, customer relationship management (CRM) and supply chain management, among other capabilities, according to Rainer Zinow, senior vice president of solution strategy for Business ByDesign.

"We didn't say, like most of our American competitors, let's start somewhere and see where it takes us," Zinow said. Instead, SAP planned for tight integration among components and sketched out how they would work together before writing the first line of code. "It's an interface-free system on the inside," he added.

That doesn't mean that other components can't be included, however. Business ByDesign has more than 500 business objects that can be added, like sales orders or account charts. Zinow likens them to Lego bricks that let users customize the software to fit their needs. There are also tools that let companies localize Business ByDesign for countries where official versions haven't been rolled out. The tools allow companies to adjust general ledgers or meet tax and accounting requirements for various locales without programming, he said.

SOA differentiates Business ByDesign -- and invites skepticism

The message bus, a hallmark of service-oriented architecture (SOA), is how the Lego bricks of Business ByDesign communicate, according to Zinow, who fingers SOA as the biggest differentiator between ByDesign and other products. "All other solutions are built on the principle of integration by database tables, which makes the underlying database a delimiting factor in such a model," he said.

Business ByDesign's modules communicate with message buses, both internally and externally. For example, the logistics system and CRM system would be able to send information regarding customer order history and widgets that are in stock back and forth. "The system is much more open than any architecture SAP has ever built," Zinow said. It's allowed partners to build approximately 1,800 extensions based on the SOA, he added.

However, some experts are skeptical of SOA being touted as an advantage of Business ByDesign. "That's where I'm more critical of SAP than most of my colleagues," said Ray Boggs, vice president of small and medium business research at IDC. The fast turnaround for queries and getting reports right now is expected, not an anomaly. "It's almost like the technology itself is less critical from my point of view [and] less exciting than the benefits," he added.

For some users, as long as it functions like a light switch -- turn it on and it works -- the underlying architecture isn't a concern. "One of things we like is that we don't have to worry about what's behind the cloud," said Terry Rice, director of finance at Living Proof. "It works, and it's secure, and that's what we care about."

The cloud is the draw

As a small company of approximately 60 users, Living Proof chose Business ByDesign because it's cloud-based and doesn't require anything on-premises, but it would scale as the company grew, according to Rice. SAP's reputation and position as a leader in the manufacturing ERP software space also helped, he added.

Currently, Living Proof uses Business ByDesign as its financial suite and manufacturing ERP software and runs its entire supply chain through ByDesign. The company also uses its expense reporting and human resources time-off planning tool, although that wasn't a reason for choosing it, Rice said. Now, Living Proof wants to integrate ByDesign with SAP Business Objects, as well as a forecasting tool, but is still in the early stages, he said.

However, that doesn't mean Business ByDesign is perfect. Rice likens purchasing software to purchasing a house. The paint colors can be customized, so buyers need to look at the structure and amenities. "No one thing is perfectly customizable," he said. There are times when using ByDesign can be frustrating, like when it takes two steps to do something that users think should be done in one. But all things considered, the company is pleased, he added.

Where Business ByDesign will go in the future depends on how excited the developer community and channel partners will be, according to IDC's Boggs. "I don't think the product needs adjustments or has a shortcoming that needs to be addressed," he said, noting that partner support and marketing messages would be critical for SAP. With that, it's possible for ByDesign to penetrate more small shops, especially manufacturing and retail, as well as expand more broadly, he added.

Next Steps

Read how other companies use Business ByDesign

Compare SAP SaaS ERP choices

Use Business ByDesign in two-tier ERP

Learn how on-premises and cloud ERP software differ

This was last published in July 2015

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