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SAP keeps ERP software implementation simple for small businesses

With an increasing number of independent software vendors and a growing list of software resellers, SAP executives are struggling to keep the small business market simple.

SAP executives are steadily increasing the company's army of independent software vendor (ISV) partners and software resellers as they ramp up sales efforts with the Business One software suite for small businesses.

But executives admit that maintaining a strong relationship with SAP's partner vendors while keeping Business One easy to implement is a major challenge for the company. A growing number of ISVs are selling modules that can be added onto the Business One suite, and software resellers need to steer potential customers to the right ones.

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"Small businesses conducting global trade can be very complex, and we want to have functionality advanced enough to support their processes," said Gadi Shamia Sr., vice president of small business solutions at SAP. "If you don't have an ecosystem around you, you wind up not giving them a clear-cut solution."

SAP is bringing together its reseller and ISV partners at a partner summit in Denver this week. Approximately 250 Business One partners -- ISVs and resellers -- will meet to discuss their products and services and learn how functionality can be added onto the Business One suite. SAP also announced reseller partnerships with nearly a dozen new resellers, saying that the move would bolster the channel in the United States and add "vertical breadth" in specific industry areas.

"You cannot replicate the entire innovation in the world in the SAP labs, even with the most visionary engineers," said Dan Kraus, vice president of SAP Business One. "This is why by design we open up to enable our partners to develop solutions, and we help foster an ecosystem driving around our product."

The focus is on enabling ISVs to develop industry-specific features aimed at microverticals and even what SAP calls submicroverticals. For example, rather than selling a general version of Business One to a delivery business, an ISV can create functionality designed for small businesses that sell and distribute bread or paint products.

The strategy has paid off in Asia, where SAP Business One has found a niche among manufacturing and distribution small businesses. Business One is available in more than 40 national versions, and sales staffers are moving aggressively as companies are migrating away from disparate packages for accounting and inventory management and toward a complete enterprise application suite, according to research from Boston-based Yankee Group.

"What we're seeing is that small businesses are ending up with silos of applications," Kraus said. "With Business One, all of these pieces are embedded and integrated together so companies can get a consistent view of the entire business."

Like their larger counterparts, small businesses now have access to integrated software suites, according to Sanjeev Aggarwal, a senior analyst at the Yankee Group. Increasingly, small businesses are being pushed toward integrated suites by their larger trading partners, which must comply with regulations, Aggarwal said.

SAP is also trying to reduce complexity with targeted acquisitions to beef up functionality directly in Business One. Earlier this month, SAP acquired Praxis Software Solutions, a privately held software company and SAP Business One partner. Praxis adds e-commerce features to Business One and integrates CRM through a Web-based user interface, Kraus said, but Business One customers had to be introduced to Praxis through a reseller.

SAP found that most of the customers that adopted Praxis on top of the Business One suite also invested in Web infrastructure. The acquisition of Praxis allows customers to go to a single source for e-commerce features, reducing complexity, Kraus said.

"When we do an update to Business One," he said, "our customers can be assured that Praxis is going to continue to work with it."

For now, the new Praxis features can be purchased as an extension to Business One. Some of the main features will eventually be integrated into the core development and will be available in future releases.

Meanwhile, SAP announced nearly a dozen new reseller partners this week in what it calls a strengthening of its channel in the United States. Business One resellers are focusing on specific areas, including retail, wholesale/distribution, utilities, manufacturing, and food and beverage industries.

The goal, according to Kraus, is to enable partners to have the local market and industry expertise.

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