Is Business By Design replacing SAP Business One?

Some people have asked, “Is SAP Business ByDesign replacing SAP Business One?”  The answer is no.  There are clear statements of direction for each product and differentiations between them.

We are a reseller of Both SAP Business One and SAP Business ByDesign so we can talk about this from a fairly objective standpoint.

Let’s first look at SAP Business One. B1 is a single integrated solution designed for small to mid sized companies from 5 – 100 users (although there is no upper limit). It incorporates Financials, Sales, Service,Inventory, Purchasing, Basic Manufacturing, CRM, Reporting and Microsoft Office Integration. The core system is designed to work with a number of third party Modules and Enhancements that offer additional functionality and sit within the core system rather than being separate bolt on’s. Many are certified by SAP.

SAP Business One suits companies in in Distribution, Manufacturing, Basic Retail, eCommerce and Services. It is licensed on a named user basis and currently runs on a Microsoft SQL Server database although SAP Business One in The Cloud is planned for later in 2012 hosted via partners. The plan is for SAP B1 will eventually support SAP HANA for real time business analytics in the near future as well.  It may even replace Microsoft SQL Server all together and use the HANA database for all functions.  This will simplify the number of components to install and should dramatically increase performance since HANA is an ‘in-memory’ database technology.

In reality, the ‘sweet spot’ for SAP Business One installs seems to be the 5 to 25 user space and SAP Business ByDesign is the 20 to 200 user space.

With over 35,000 installations worldwide, Business One is a very stable and affordable solution for businesses looking to enter in to the world of ERP Software. Companies can benefit from some of the key functionality that has made SAP the Global Market Leader in ERP Software for a fraction of the cost of “Big SAP.”   It’s best to thing of SAP Business One as the ‘next step’ after low end solutions like Quickbooks Enterprise.

SAP Business ByDesign is a complete On Demand business solution aimed at mid sized companies. You pay for what you use and available modules include Financials, CRM, HCM, SCM, Project Management, SRM, Compliance Management and Executive Management. It is licensed on a named user per month basis and accessed though a web browser meaning the customer doesn’t need costly servers or internal IT support. As with any On Demand solution, you are entirely dependent on your internet connection so a Business Class Internet connection high reliability is needed.

Currently ByDesign is seeing most of it’s success in larger rapidly growing companies.  Some notable customers include Pink Berry and Skull Candy.  It’s has much more functionality for certain industries such as Service companies, but can still handle distributors and light manufacturers.  Over time, the core technology of ByDesign is targeted as being the replacement for ‘Big SAP’ but it’s not there yet.

So as to summarize, SAP Business One is ideal for smaller distributors outgrowing the likes of Quickbooks.  SAP Business ByDesign is for larger faster growing companies, especially those in the service sector.  SAP All In One, is really a stripped down version of “Big SAP.”  It’s for complex companies in a variety of industries with budgets in the $750k to 1.5 million range for a system.

Here is a slide from SAP showing where they feel the positioning is.

In conclusion, SAP Business One is ideal for Small to Mid Sized companies needing an easy to use, customizable solution to meet their business needs. ByDesign is great for companies who are expanding rapidly or changing in their dynamic frequently and offers the flexibility of an On Demand solution. When HANA is embedded into SAP Business One, it may propel the solution to the lead position among competitors and nobody else in the ERP space that Business One competes in owns a technology like HANA.