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It has been a rough couple of quarters for SAP, and until the general release of their SaaS offering next year, they continue to look like a clumsy, archaic old-timer. SAP solutions have for a long time been best-suited to large enterprises, and they are currently implementing a new pricing model to attract SMEs—a pricing model that is being doubted by some.

First, a look at their old pricing model: SAP has given customers volume discounts based on the size of the deal, and this was a successful method until it became apparent that implementations were typically unfinished by the projected deadline. As a remedy, SAP continued dropping software prices, and created agreements with large companies that allowed them to defer license audits and define their terms of use, paying in phases—SAP account managers would work with corporate CIOs, and were mostly flexible in their concessions because the important part was closing the deal.

Now, SAP wants to woo SMEs, and has to adjust their pricing models, especially in light of the rise of on-demand software models that offer more flexible subscriptions. They’ve reduced up-front payments, but there are still some issues. Helmuth Gumbel at Information Week notes that this does not solve the shelfware issues that the older model incurred, as it provides no guarantee that companies won’t have to spend big bucks on upgrades in the future. Gumbel also points out that SAP often replaces its pre-existing agreements, which is also not the most attractive attribute of an ERP vendor.

But mainly, the high-volume, high-discount, long-contract model is too clunky to entice many SMEs. SAP will most likely have to reduce contract lengths to get more SMEs on board with their on-premise systems.

Technorati Tags: SAP, SMEs

Australian ERP company Pronto recently bested SAP, winning the business of the Australian branch of Freeworld Coatings, a global specialized coatings company. The Australian arm of the company recently underwent a restructuring phase, and they used Pronto’s PRONTO-Xi to consolidate their IT platform and replace the various legacy systems employed about the Australian operations.

The company’s operations manager, Joseph Eid, noted that after they took over the coatings division of Bristol paint manufacturer Barloworld, they were in need of a “robust ERP solution” that was also flexible and could facilitate the structural overhaul. They vetted several ERP solutions, including SAP—an undisputed ERP heavyweight—but found PRONTO-Xi to be the most flexible and customizable. The PRONTO-Xi deployment supports financial, manufacturing, and CRM data, and the Freeworld is also happy with the platform’s multi-currency capability.

Eid said Freeworld’s Pronto implementation time was also the quickest offered, and operations were streamlined within 3 months—which was a good time period for a rebuilding phase, but also enough time for the end users to become familiar with the product. The speedy deployment is due in part to Pronto Hosted Services (PHS), which is the Pronto SaaS model Freeworld chose to deploy alongside PRONTO-Xi.

This is not the first time SAP’s services have been passed up for a sleeker SaaS model—earlier this month, they lost an actual customer to NetSuite’s OneWorld, which runs on their SuiteCloud. It’s certainly been a rough year for the company, and the release of their Business ByDesign is surely not coming soon enough.

Technorati Tags: NetSute OneWorld, Pronto ERP, PRONTO-Xi, SAP Business ByDesign, SAP ERP

This week, Best Line Oil announced they will implement VAI’s S2K Enterprise for Distribution ERP solution to streamline business operations. Best Line Oil distributes Shell Lubricants in the Southeast US, and their Florida business partner, MCS Business Technologies, will also be deploying VAI’s S2K solution.

Implementation of S2K began in September of this year, and the system will go live January 2010. S2K will provide a unified platform through which management can view real-time business operations. One of the reasons Best Line Oil chose S2K was for its customer support capabilities, one of their regional managers noted. S2K has intuitive software that analyzes data to calculate best prices—through analysis of buying trends—for certain customers, which is a timesaver for Best Line Oil’s accounting department. Best Line was also impressed with the Enterprise for Distribution’s solutions for managing supply chains and customer relationships.

For all their clout in the ERP market, SAP has had some trouble recently, mostly due to their plans to increase maintenance and licensing fees and their current lack of a general cloud-based solution. ERP-Link Corporation uses SAP’s situation to their advantage, creating SAP-Microsoft interoperability solutions; most recently, they released iNet.Invoices, a Dynamic Business Application allowing SAP users to optimize and automate invoice management for a lower cost.

With iNet.Invoices, companies running SAP for Accounts Payable and Logistics can run automated invoice management by leveraging Microsoft SharePoint Server, which provides rich document management, and workflow and Office interfaces. More specifically, the application verifies information in real-time about vendors, orders, and goods received against a user’s SAP system, and through SharePoint they can engage the information through Office apps.

iNet.Invoices optimizes at a fraction of the cost of traditional solutions, which is a timely offering given the state of the economy, but also considering SAP’s current pricing. Business ByDesign, their SaaS offering, won’t be generally available until next year, and in the meantime, their on-premise products (which are already more costly by nature) are about to see rising prices.

Technorati Tags: ERP-Link, iNet.Invoices, Microsoft SharePoint Server, SAP, SAP for Accounts Payable and Logistics

Microsoft’s Dynamics ERP may never have the enterprise-market potential touted by SAP and Oracle, but the company is aiming to dominate the small- to medium-sized business market.

Microsoft doesn’t break down revenue reports from its Dynamics line by segment, but Ray Wang, a partner at the Altimeter Group analyst firm, estimates that Dynamics ERP brings in between $1.1-$1.2 billion per year. Dynamics EMEA’s director of ERP field marketing, Phil Battersby, calls the midmarket their “sweet spot,” and states that Microsoft isn’t trying to poach enterprise customers from SAP and Oracle. Battersby acknowledges that those companies have been giants in that market for a while, and now Microsoft wants to carve its niche in the SMB space.

According to Computer World, there is plenty of room for Microsoft in the SMB market. For one, many midsize companies are looking for on-demand replacements for legacy systems. In addition, smaller companies who are expanding will likely be looking for unified ERP systems, and here Microsoft Dynamics ERP has an advantage: their user interface closely resembles that of the MS Office Suite applications these businesses are likely already using for business management.

Another factor boosting sales in Dynamics ERP: it’s done entirely through a partner system, where partners polish the system for local sales. This locality also adds a personal touch that is apt for dealing with SMBs. Of the partner system, Battersby also noted that it helps Dynamics ERP expand into more verticals.

Technorati Tags: Microsoft Dynamics ERP, Oracle ERP, SAP ERP, SMBs

Last month, Plex Systems announced added enhancements in supplier quality management. The company provides ERP solutions for manufacturers, and these new, streamlined improvements will allow users to engage suppliers in ongoing improvements and operational efficiencies.

Now users of Plex Online, which is an integrated SaaS ERP solution, can permit anyone in their supply chain limited access to the Engineering Change Request system, which allows them to submit chain requests, share resulting savings, and alter specifications and processes. The idea behind this update is to help manufacturers boost productivity while cutting costs in product development cycles.

The supplier management functionality also has new supplier scorecards with expanded drill-down capabilities.  More specifically, there is a new capacity for calculating scores for “parent” and “child” suppliers and for individual businesses. There is also a function for defining multiple formulas for metric and target ranges in various metric groups. These scorecards have been improved for user-friendliness with color-coding for readability, as a means of simplifying the system so managers across the system can easily pull data.

Technorati Tags: Plex Systems, Supplier Quality Management