NEW YORK – At SAP’s annual SME Summit, company CEO Bill McDermott revealed many things. One interesting fact was that McDermott worked at a delicatessen growing up in the city. Another revelation is that SAP has a new-found focus on the small to mid-size enterprise (SME).
Now this direction contrasts what most customers and channel partners know about the German software giant; that they are a large enterprise, Fortune 500 type player. That may have been the case in the past, but in today’s market, McDermott points out that of the more than 275,000 SAP customers, approximately 80 per cent are SME. To further this point, McDermott revealed that about 1.6 million companies currently interact with SAP’s business network and of those firms 90 per cent of them are SME.
He added that 60 per cent of SAP’s growth is in SME. “The future of the world is SME,” McDermott said. “The millennial generation has the idea of not just running a business and getting a great outcome, but to improve the world and life. This is in tune with our vision. These SMEs want a purpose and it extends beyond the balance sheet.”
The SAP Business Network is a key piece of the company’s SME strategy. McDermott said that digitization is happening throughout the globe and working in a digital cluster is different that a corner store or office environment.
“The idea of a business network and doing business in networks is one of the big outcomes from our strategy,” he said.
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Ariba Networks, a software and information services vendor from Sunnyvale, Calif., that SAP acquired two years ago for $4.3 billion will serve as the centrepiece of this business networks strategy.
According to McDermott, some SME customers were already using the Ariba Network for selling into Fortune 200 firms and helped them with labour issues because Ariba was able to align the business to the skills of the workers needed.
For example, a business traveler needs a business network to get in front of all of his or her expenses. “You like doing expense reports?” McDermott questioned. “This person needs to be presented with a better experience since the second largest line item in any corporate budget is expenses. If you can improve this you can literally change the world,” he said.
“Companies should stop having people fill out expense reports. Why can’t a food bill be automatically updated from your mobile device to your ER (expense report) system and have that continuously updated?”
SAP is offering an Ariba Networks discovery package for free to SMEs through the channel in hopes of joining the network. Ariba acts as a global business-to-business trading community. McDermott said that he believes this move will accelerate commerce.
SAP is also investing in its channel team to address the market opportunity in SME.
“We are tripling down on SME and Channel team to take this to the next level,” he said.
Last year National Business Furniture, an office furniture and equipment supplier based in Milwaukee, WI. decided to use the Ariba Network to help improve order processing. With Ariba National Business Furniture set up an online catalogue for receiving purchase orders digitally and saw its sales quadruple.