German software company SAP gets about 30% of it’s business from small to medium sized businesses. Business Week reports, and I know from first hand, that SAP wants a lot more of its business to come from smaller businesses than it traditionally serves, which are HUGE Fortune 500 companies. Why?
Like many companies, who had a gravy train with the large business market, SAP needs to keep growing and small-medium sized business is where the growth is at.
Large businesses keep their systems for years and there’s only so many “Fortune 500” businesses. However, the pool for small business is large (thousands to millions – depending on who and how you count) and their needs are so great.
The big challenge is getting them to a) at least know about your product b) having local solution providers want to resell your product b) making the overall buying, installation and support experience as smooth and economically as possible.
Business Week writes Jon Nicolaisen, president of Soy Basics, an Iowa-based maker of environmentally friendly soybean oil candles, can tell right away which of his products are catching fire in the marketplace and which ones aren’t. His SAP (SAP) software tells him. “SAP will look at orders and tell us what we have in inventory and what we need to produce,” says Nicolaisen. “If we were going to do that by hand, well, I don’t know if there are that many people in Iowa.”
Despite testimonials from the likes of Soy Basics, SAP still has a big job convincing smaller businesses that they can handle its software, which is legendary for being powerful but demanding. Indeed, companies often have to reengineer their internal procedures to conform with the software, rather than the other way around.
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