Digital transformation can create complexity for small and medium-sized enterprises (SMEs), or alleviate it. At...
the SAP SME Summit held Nov. 10 at SAP's New York office, panelists gave advice on how to enable a successful SAP implementation for SMEs. Leaders from these fast-growing companies not only described how they implemented software for ERP, CRM and inventory management functions, but also how it was critical to keep the lines of communication open with SAP, and how digital transformation affected their businesses.
According to the Simplifying the Future of Work Study, an SAP and Knowledge@Wharton survey, 58% of SMEs responded that technology is hampering their growth. Only 38% of respondents said they had simplified technology within their teams. For three of the panelists at the SME Summit, consolidating systems was critical to simplification; for the fourth, simplicity was exactly why the company chose SAP.
Herding cats: Consolidating multiple systems in retail and distribution
Retailer Mad Rabbit Kicking Tiger (MRKT) had four manually maintained systems that it moved to SAP Anywhere as an early adopter, according to Shaun Nath, executive director of the Los Angeles-based company. Before moving to the platform, which is not yet available in the U.S., MRKT used QuickBooks and received some wholesale orders on napkins. "Everything we wanted to happen has happened," he said.
As an early adopter, MRKT went in with its eyes wide open, knowing it was working with a beta product. The complexities haven't been within the product, but with its own business as a retailer, operating 40 retail locations, as well as working with 300 other retail stores, and managing offices in Los Angeles and Shanghai, China. During the whiteboarding session before its implementation of SAP Anywhere, MRKT mapped out its points of sale, order fulfillment and tools used for the entire process. "It's a really complicated picture, because as a startup -- especially in fashion -- very deliberately a key focus is not a robust [back end], but building sales and marketing," Nath said.
Tribe Medical Group Inc. had a similar fast-growth story, and large amounts of data posed a huge challenge, as well as the absence of a CRM module. "We waited, and it's very difficult to transition when you have a lot of data," said Davi Pontes, manager of operations for Tribe Medical Group, based in London, Ont.
Ultimately, Tribe Medical Group selected SAP Business One for SAP HANA, which lets users type in the name of a customer and pull up a "data dump," Pontes said. Additionally, the company can quickly create reports via Crystal Reports that show sales goals and make the information available on iPads. Its partner, Arthrex Inc., can place orders digitally.
This functionality didn't come without its own bit of complexity, however. Tribe Medical Group invested at least 500 hours in software development kit customizations, according to Pontes. "We had to do the customizations because of the uniqueness of our company," he said, citing how Tribe Medical Group lends equipment to hospitals and needs to track the transaction as an example. "We chose SAP because we could."
Taking responsibility for a successful SAP implementation
Although the implementations went well and the software is working as it should, two panelists noted that SAP could do one thing better: communicate. Whether it's about what to expect from support or in the future from SAP, panelists were pleased with their ERP systems, but advised prodding the company for what they need.
Par Pacific Holdings Inc. -- the largest company represented at the panel, with 600 employees -- was growing by acquisition and already had four siloed ERP systems to wrangle, including a legacy SAP ERP Central Component environment that hadn't been patched in a long time. Rather than struggle to bring all the ERP systems onto an SAP system, the Houston-based energy company chose S/4HANA for Business All-in-One. "If we're really going to grow and scale, the best way I know how to do that is to leverage common infrastructure and applications across the enterprise," said Rick Castro, CIO at Par Pacific Holdings.
Rick CastroCIO, Par Pacific Holdings
It made sense; if the company were to make the investment in unifying its systems, it would choose the newest technology from the vendor that would be fully supported, according to Castro. A support incentive, outside of pricing, was offered on S/4HANA. "Not only did we get the latest technology, but we also would get committed and dedicated support to make sure we were successfully implementing the application," he said.
However, it took some prodding by Par Pacific Holdings' implementation partner to get that kind of support from SAP, Castro said. "If they're selling it like that and promoting it like that, [support] shouldn't have to be something I have to go back and ask for," he said. "The onus was on us."
Outside of the need for follow-up, SAP did take good care of Par Pacific Holdings to foster the successful SAP implementation, Castro said. "They lived up to the hype, so to speak," he said.
Additionally, Castro knew that S/4HANA was a new product, though, and set expectations accordingly. "We didn't have the expectation that there wouldn't be any issues," he said. "As long as you go in understanding where they are and what you can expect, we didn't have anything unexpected like degradation of service," he said. "But don't go in thinking that you don't have some responsibility; there's responsibility on you to get what's promised."
Choosing a cloud-based ERP system
Visual Communications Company (VCC), based in San Diego, Calif., wanted to avoid complexity, according to Andy Zanelli, CEO. Out of the gate, the company wanted to use a purely cloud-based ERP system, which led it to SAP Business ByDesign in 2012 to replace its current ERP system. "We got a sense ... that SAP was definitely going to push in this direction," he said. "We felt comfortable that we would be supported going forward."
VCC had been growing exponentially, with a 300% increase in revenue and a twelvefold increase in employees, according to Zanelli. "The simplicity [of Business ByDesign] helped us focus on key business processes and what we needed to do organizationally," he said.
Unlike Tribe Medical Group, VCC didn't have an appetite for serious customizations. "When I think of customization, I think of things that can break and stop working," Zanelli said. That being said, VCC is now interested in integrations with EDI, as well as third-party applications, he added.
Yet, to further enable successful SAP implementations, SAP could communicate better, according to Zanelli. As a SME Summit attendee, he was excited about everything he was learning about the newer products, but he also was wondering what outlets there were for existing customers to learn about these developments sooner. He is also concerned about the future of ByDesign. "Going out to 2020, I see two platforms, and I don't think ByDesign's going to be one of them," he said.
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