Small businesses are not all the same. Some are very small and can do just fine with minimal accounting and business management solutions. Others are much bigger, and require technology to help them better manage their complex infrastructure. This complexity can include manufacturing, accounting, payroll, marketing, CRM, sales and other components.
Software that can integrate various systems are known as ERP (Enterprise Resource Planning). One of the leaders in ERP is SAP, who recently highlighted one of their family owned business customers.
The Fruit Company, located in Hood River, Oregon, is an online retailer of fine fruits and gourmet gift specialties. The Fruit Company required a single, integrated view into all of its departments – and found the answer in an ERP solution. What they used was SAP’s Business One. Whether using a solution from SAP or another vendor the ERP system you choose should be able to integrate your current systems and be flexible enough to meet your existing business processes.
Another company, Life is good is a New Hampshire-based apparel company that sells and markets an assortment of optimistic and humorous Life is good products, including clothing, accessories and footwear. The brand was growing, but the company was hindered by stove-piped master data management and disparate operating systems.
I wanted to dig deeper into this and asked SAP to help us understand the cost of a basic ERP system and how a business knows when its times to move to an ERP system.
What is the average cost per user for SAP Business One
In a typical Business One implementation the average cost per user for software is around $2400 per user in the system. This is a blended cost of our full access professional user license and limited users that only access some portion of the business management system such as CRM or Financials
What is the average cost of installation
The typical ratio of software to services is about 1 to 1. Our average customer is going to spend between $60,000 and $80,000 for a complete system including software, services, training, support, maintenance and customizations.
How does a business know they need to scale up to SAP from an accounting program
At SAP we like to speak about our customers having one version of the truth. For many small businesses, they run un-integrated systems for sales, ecommerce, accounting and inventory. As a result, they have to rely on spreadsheets for consolidation of this information OR they can’t get the information they need to run the business effectively. When they hit this, it is one key indicator that it is time to move to a new business management system. Another indicator is when your business is running in multiple locations or multiple countries. Most basic account software programs do not do a good job of supporting the multi-lingual and multi-currency demands and they do not do a good job of showing consolidated inventory and assets.
Who are the competitors to SAP.
Frankly, the biggest competitor for SAP Business One are the hundreds of small, vertical market point solutions that exist today. Many of these products were created for a single company in a specific vertical market – like for a company that sells and repairs lawn mowers – and then were sold to more companies in a similar business. As a result, there are hundreds of software packages out there, from hundreds of very small software developers – and each only has a few hundred installations. This is a real risk for the businesses that buy that kind of software because in a difficult economy, it becomes very challenging for those small software developers to stay in business, and their customer face real risk in that the software they bought may no longer be supported or updated. This may not seem like a big issue, but with changes in tax law and new international financial accounting guidelines starting to come into the market, having a stable partner in your software provider is really important.
What’s the process like going from an accounting program to SAP Business One
The process is making sure, as a company, you are using best practices and not just re-automating the way you do things. Many times companies do things a certain way, because that is the way it has always been done. The key to getting the most out of a new system is to understand that you should question many of the things you do daily with the statement “why do we do it that way”.
What about Support
Support takes many forms. In a new installation, the SAP Partner is the primary point of contact for installation, configuration and training. And the partner often plays the role of training the company’s internal trainer who would then help new employees learn the system and processes. Partners also help the customer stay on the most current version of the product and take advantage of new features. We also provide a forum for experienced customer who want to ask questions and seek answers via our customer portal.