SAP in 30 days; with the channel’s help

It seems unheard off or near impossible to implement SAP (Nasdaq: SAP)in 30 days, but SAP Canada president and channel chief believe they are heading in that direction with the help of channel partners.

Conrad Mandala, SAP Canada channel chief, said channel partners can do it in 30 days and that kind of implementation time will be a critical enabler of the subsidiary’s strategy to get to a volume business in the next three years.

Mark Aboud, SAP Canada president, said that SAP SME strategy is a form of myth buster. “We often find ourselves defending our position that SAP is not for big companies,” he said. Aboud added that 60 per cent of its customer base is small medium enterprises.

Key to this new business direction is Fast Start for SAP Business All-in-One. The Fast Start tool allows channel partners to configure SAP Business All-in-One online and immediately obtain a cost estimate for pre-tested, preconfigured software and hardware. Another factor is SAP reducing its prices. Average per transaction dollar sale has gone down.

Mandala said that SAP Canada’s average per transaction has gone down. Earl Hughson, president and CEO of GreenBlue Systems, a new customer of SAP, told CDN that he was shocked at how low the price was.

Jamie Fryer, vice president of enterprise software sales for SAP partner Illumiti Inc. of Markham, Ont. said Fast Start is a wonderful opportunity that allowed us to sell the same software at an affordable price. “The time line from considering a solution to installation is vastly simplified,” Fryer said.

Joel Martin, principal analyst for Toronto-based Business Software Strategies, believes that if SAP can execute on Fast Start and allow partners to bring templates to the mid-market, which enables low cost sales and implementation than SAP can be successful down market.

“The thing that struck me most was if a partner can help a customer deliver SAP in 30 days. That is unheard of. That is something that is very powerful, very compelling for customers to consider SAP than before,” Martin said.

The whole concept of rapid implementation is based on the channel partner making money really quickly, Mandala said. “The cost of selling typical ERP systems is weeks if not months of demos. If the premise is true that the software works then let’s move to a show and tell piece and accelerate the sales process,” he said.

SAP has made available to the channel several references pieces to show customers that the software works. Mandala believes this type of sales approach will enable solution providers to stop wasting thousands of dollars in the RFP process.

Fryer said that deals are typically in the $100,000 range and services are two-times the licensing. SAP offers perpetual licenses and there are no sales term limits or conditions. Average gross margins are between 20 to 25 per cent on both licenses and services.“Pricing is a huge difference and since the price has come down we’ve been able to offer a flexible, better option for smaller businesses,” Fryer said.

Michael Pearson, president of Contax Inc., an ERP consultant based in Toronto, said that SAP has shown a strong commitment to the channel under the strong leadership of Mandala and the changes to the business model has made it more applicable to the SMB, which are customers his company deals with.

“I like the changes they made with the way the software is packaged, delivered, licensed and SAP is providing more options for customers,” Pearson said.

Mandala stated that partners are squarely taking over. “We had 150 per cent year-over-year growth in indirect transactions. We also saw the direct business drop by 50 per cent. This is my field of dreams for SAP and the channel partners.”

Michelle Warren, president of MW Research & Consulting of Toronto, at first glance the changes are positive to the channel, but it will take a few years before if they can be a real player in the SMB.

“In Canada, the enterprise market is finite. There are only a certain number of companies. SAP has been in that market a long time and they have this market covered. The next step is to move to the small and mid-size market and in order to do that they must use the partner community. This is a substantial move for SAP to increase its business opportunities,” she said.

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Paolo Del Nibletto
Paolo Del Nibletto
Editor of Computer Dealer News, covering Canada's IT channel community.

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