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 SAP AG 2003 Market segments Business Issues and Challenges Problems and Chances to IT Spending among SMBs Contents: The SMB Market.

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Presentation on theme: " SAP AG 2003 Market segments Business Issues and Challenges Problems and Chances to IT Spending among SMBs Contents: The SMB Market."— Presentation transcript:

1  SAP AG 2003 Market segments Business Issues and Challenges Problems and Chances to IT Spending among SMBs Contents: The SMB Market

2  SAP AG 2003 List the business issues and challenges facing small and midsize businesses State and characterize the market segments of the SMB market Name Problems and Chances to IT Spending among SMBs At the conclusion of this unit, you will be able to: The SMB Market: Unit Objectives

3  SAP AG 2003 Market Segments Mid-enterprise Mid-market Small Office/Home Office (SOHO) Large Enterprise SMB Market Advanced Sophisticated Source: SG Coven research; European Observatory for SME, 2002, No.2; IDC, i SmallBusiness Survey, 2002i USA Europe Provider 1,000 businesses1,000 businessesSAP, Oracle, PeopleSoft 25,000 businesses30,000 businessesIntentia, JD. Edwards, Microsoft 1.2 mill. businesses1.3 mill. businessesExact, Sage Scala, U4A 7.8 mill. businesses8.7 mill. businessesIntuit, Sage over 5,000 employees; over $550 million in turnover 500 – 5,000 employees; $250 - $550 million in turnover employees; $25 - $250 million in turnover 1 – 49 employees; <$25 million in turnover SAP Business One mySAP All-in-One

4  SAP AG 2003 Small Market (1 to 99 Employees) There are different types of small enterprises and their needs and business issues can vary significantly. But the main factors to consider are the following: Structural Issues ( lower labor productivity compared to larger companies) Cash Flow Competition from Low Labor Cost Countries (China, Eastern Europe) Cost-cutting – as much as possible Gain Market Credibility (Start Ups) Reduce Inefficiencies and Time on Low Value Operations Skills (lack of competencies and capabilities in managerial and IT fields)

5  SAP AG 2003 Medium Market (100 to 499 Employees) The companies here have some similarities with both small companies and larger ones. The most important business issues and challenges are the following: Improving Profit Margins Competition from other Medium and Large Companies (national as well as international level) Streamlining and Integration of Business Processes along the Value Chain Management of Information Flow along the Value Chain Development of Relationship with Partners, Customers and Suppliers

6  SAP AG 2003 IT - Implications Right sized solutions ( look for the level of functionality that suits their dimension) Focus on business benefits and how they can improve their business trough IT Find the right supplier and gain attention from them (sometimes they feel their size is not attractive enough for IT vendors) User friendly solutions (relevant because of lack of IT skills. Solutions have to be easy to install, use and manage) Lack of effective communication between IT and business functions (especially for medium companies) Effective relationships Lack of coordination in developing company business intelligence and knowledge SAP + Partners + Business One is the right decision!!

7  SAP AG 2003 Problems and Chances to IT Spending among SMB I Inhibiting factors Problems in cash flow + liquidity (especially as a consequence of the delay in payments from larger companies) Wait and see approach Delay in hardware replacements Expected difficulties in financing conditions (with the introduction of regulation of the Basel Committee)

8  SAP AG 2003 They are talking about SAP Business One!! IDC expects that Ease of use Ease of installation Low maintenance costs More tailored solutions Low costs helps the companies overcoming the limited economic resources and skills that traditionally characterize the SMB market. To communicate this points is a must in our strategy !! Problems and Chances to IT Spending among SMB II As soon as SMBs understand all benefits of IT products and services, they will start to invest more aggressively. New technologies allow them to compete more effectively with larger companies. (Source: IDC Report 2002)

9  SAP AG 2003 Western Europe, IT Spending in the Business Sector Austria Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland UK Western Europe (approx.) Source: IDC, 2002, numbers in million US$

10  SAP AG 2003 To sum up There is a huge potential in SMBs. We cover mostly all of the expectations of SMBs. The trend in IT spending in the business sector is increasing. The right product at the right moment!

11  SAP AG 2003 You are now able to: The SMB Market: Unit Summary List the business issues and challenges facing small and midsize businesses State and characterize the market segments of the SMB market Name Problems and Chances to IT Spending among SMBs


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