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SAP Business One overview: Features, benefits and more

SAP Business One promises holistic business management software. Learn more about its advantages and pitfalls, as well as pricing and integration, in this SAP Business One overview.

Many small and medium-sized businesses' leaders who want to automate important business processes with an ERP system consider SAP Business One. That means researching its features, benefits and weaknesses.

With that in mind, here's an SAP Business One overview.

Features and verticals

SAP Business One is well-suited for wholesale distribution, manufacturing, service industries and retail because of its inventory management capabilities. Inventory management has always been one of Business One's strengths. The ERP systems is meant for up-and-coming companies that have outgrown entry-level software packages, as these don't usually handle inventory very well.

In addition to the usual core modules for general ledger, sales and purchasing, SAP Business One provides CRM, service management, project management, inventory and material requirements planning.

SAP Business One also includes light manufacturing, which is suitable for most companies with modest manufacturing and inventory management requirements. A variety of third-party extensions are available for businesses that require more robust manufacturing functionality.

SAP Business One is potentially a good choice for companies that do business globally because the software supports multiple currencies. It also supports numerous country localizations, including country-specific legal requirements, tax and banking. Business One is available in 27 languages and is localized for over 40 countries around the world.

Pros and cons

Anyone interested in using Business One should carefully weigh the ERP system's pros and cons.

On the plus side, SAP has continued to invest in developing Business One, and enables other tools within the SAP ecosystem to work with Business One. Most notable among these is Crystal Reports, which enables users to draw data from Business One. Users can also choose to get access to the HANA database. SAP also continues to invest in an enterprise platform that is meant to trickle down to the Business One customer base. SAP aims to enhance its IoT, blockchain, mobile and other transformative technologies as well.

SAP has always placed a strong emphasis on adaptability and integration, and Business One has a reputation for quality and flexibility. In addition, the software has always had strong application program interfaces (APIs).

Business One is not without weaknesses. For example, it doesn't include a payroll module and companies will need third-party products for outsourced payroll services. Those considering Business One should also understand that its HR module offers only limited functionality.

Although SAP's general reporting capabilities are strong, its financial reporting is less flexible than users may desire. Companies will need to turn to third-party applications for robust and flexible financial reporting.

Nonprofit or government leaders considering Business One should be aware of the product's limitations, especially if they require fund accounting.

Database choices: Cloud vs. on-premises

SAP Business One offers the flexibility of deploying locally on a user company's own servers, in a private cloud with a dedicated server or in a public cloud with a shared server. Although Business One wasn't originally created as a native cloud product, SAP has worked on adapting the product to a multi-tenant cloud environment

Companies that choose Business One will also need to decide on the underlying database version they want. The ERP system runs on both Microsoft SQL Server and SAP HANA. Most new customers are choosing HANA because of its speed and flexibility. SAP has announced that new feature enhancement efforts will be focused primarily on the HANA version of Business One.

Pricing and the purchase process

Business One is sold through a network of certified value-added resellers (VARs), which also provide implementation services and ongoing support. SAP doesn't sell the software directly to customers, but instead uses a quality reseller channel with deep experience in ERP and CRM software. 

SAP doesn't publish its pricing, but companies with simple requirements can expect to spend at least $10,000 for a small system with a few users. A midsized system with eight to 10 users will cost several times that amount; and for larger more complex companies, the ERP software cost can run into six figures. Implementation and training services vary, but most companies should expect to spend as much on services as they do on software licenses. 

Business One is priced on a named-user basis. There are several different user types. A professional user has access to all system functionality and is therefore the most expensive. Limited users have access to a subset of the system features and are priced lower. Limited roles include CRM and sales users, financial users and logistics users. A system administrator can restrict access to various systems based on data security requirements.

Business One is also available on a subscription basis for company leaders who prefer to incur operating expenses instead of capitalizing the cost of the software. Anyone considering this option should expect to commit to at least a full year of service. Three-year contracts are common because a longer commitment will result in lower per-month costs.

Independent software vendor add-ons

Business One is meant to be flexible and adaptable. SAP placed a strong emphasis on APIs, thus enabling software developers to build extensions and vertical add-ons that could enhance the product and extend its addressable market. Hundreds of independent software vendors have used SAP's technology roadmap to create SAP Solution Extensions, which integrate with Business One.

SAP Solution Extensions include horizontal products for application programming automation, usability, document management and credit card processing, as well as focused vertical extensions for discrete manufacturing, food and beverage, medical devices and many others.

A majority of the companies that use Business One require at least one add-on product to address requirements that are not included in the ERP's core functionality.

SAP recommends that potential purchasers work with VARs to select third-party add-ons. VARs know the products in the marketplace; they can help find the software needed to address specific requirements. The best third-party products are certified by SAP. 

Add-on vendors with limited SAP experience have developed an integration strategy, but have not certified it with SAP.

Integration

SAP offers a number of integration options for Business One.

For example, there are a number of integration tools -- both from SAP and from third parties -- that provide adapters to connect to external products and manage loosely-coupled integration workflows. These connect to e-commerce platforms to shipping companies to EDI services or to a myriad of other software and services that will enhance the reach of the ERP system.

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