SAP Business ByDesign Software Review

An Independent Enterprise Resource Planning Software Review

SAP is one of the most recognized and trusted brands within the enterprise resource planning (ERP) software industry. Having delivered SAP R/2 in 1979 and SAP R/3 in 1992, the company is one of the original vendors that defined the ERP software market. SAP was started by five IBM engineers in 1972 in exchange for 8% founders' stock. Today the German-based company retains the largest ERP market share of any software vendor; with the possible exception of Oracle depending upon how market share is calculated.

SAP Business ByDesign is the company's software as a service (SaaS) offering targeted to small- and medium-size enterprises (SMEs). On September 19, 2007, a one-size-fits-all, subscription-based ERP system aimed at midmarket companies was released as the first SAP ERP SaaS product, previously code named A1S. After several troubled installations and a flawed go to market strategy, SAP pulled ByDesign from the market for a system revamp and significant code refactoring.

Approximately three years later, Business ByDesign reemerged as a multi-tenant SaaS solution, complete with a new architecture, Silverlight presentation layer and PaaS tools for extensibility. As of December 2011, Business ByDesign was closing in on its first 1000 customer acquisitions and is available in Australia, Austria, Canada, China, France, Germany, India, Switzerland, the United Kingdom, and the United States.

Though SAP ByDesign is targeted toward SMEs with 25+ users, the solution can be used by organizations with as few as 10 users. The ideal range is 25-500 users, but the cloud scalability should facilitate more users if required. Business ByDesign is also finding a place as a Tier 2 ERP solution—being installed at smaller line of business or geographically dispersed locations and integrated to parent companies using the SAP Business Suite.

While Business ByDesign is the company's first back-office foray into the cloud, SAP has since also released cloud-based Line of Business applications. Sales OnDemand—an SFA application with strong social design—was released in July 2011 and is targeted at SAP ERP or Business Suite customers looking to extend their on-premise systems with add-on cloud components. Interestingly, the Line of Business applications were developed on the Business ByDesign framework, but don't integrate with Business ByDesign. Sales OnDemand only integrates with SAP ERP for back office business processes, so SAP customers seeking a complete software as a service CRM solution are limited to Business ByDesign.

ByDesign is offered in four enterprise software categories: customer relationship management (CRM), financials, professional services automation (PSA), and supply chain management (SCM). These solutions each include a combination of different modules, and they can be acquired as stand-alone capabilities as well. The entire ERP software suite includes the following:

• Customer relationship management (CRM)
• Accounting and financials
• Project management
• Supply chain management (SCM)
• Supplier relationship management
• Human resources (HR)/payroll
• Analytics
• Compliance management

Finance and Accounting Software

Many of the accounting software features found in SAP's Business One and Business All-in-One on-premise ERP applications have been carried over to the SaaS ERP product. Key accounting software strengths include multiple-entity, multi-ledgers capability. Many SaaS ERP systems have a difficult time performing these capabilities correctly. Organizations running a two-tier ERP strategy will find that ByDesign handles parallel general ledgers, multiple period closings, and overlapping closings well.

Features in the accounting and financials modules, such as accounts payable and accounts receivable, fixed assets, and other sub-ledgers, are integrated into a comprehensive general ledger. Management accounting tools for contract, project, product, profit center, profitability, and cost center accounting, and comprehensive valuation, reconciliation, closing automation, and reporting tools, including master data governance and invoice to pay life cycles, are all supported. Treasury and financial risk management are also included within the accounting portion of the solution.

Some of the weaknesses from the on-premise ERP applications have trickled down to the SaaS version: difficulty in configuring flexible procurement approvals; lack of credit card processing capabilities and localized accounting and taxation functionality; difficulty in setting up and configuring syncing and input of incoming invoices, light localization for taxes, supplier on-boarding, and net partners; lack of detail in travel expense management, sales tax, audit risk, acceptance of credit cards, paybacks and chargebacks, EDI support from an accounting aspect, broad but not deep project accounting, investment management, labour costing, matching cost of goods sold and financial statement report writing. In short, extensive configuration and work-arounds are often required for these functionalities.

Distribution & Supply Chain Management Software

Supply chain management is one of the four business suite solutions customers can procure through the ByDesign platform as a stand-alone SaaS solution.

The supply chain software includes transportation, supplier relationship management, extended warehouse management (EWM), and supplier network collaboration. This combination of supply chain functionality can be sold as a distribution- and supply chain-specific point solution, without the rest of the ERP software suite. The EWM module has seen extensive improvements over the original version and is adequate for most SMB organizations that require warehouse management functionalities. For organizations where the warehouse management features might not suffice, the option of staying with a SaaS WMS is likely available from a third party, as many of these exist in the WMS market. This may prove a nice complement to organizations that are distribution and third-party logistics (3PL) based. Even with two different monthly subscriptions, costs may still be less than for two on-premise systems, as there is no initial capital investment per se.

A few areas that need some fortification are automated data collection and inventory optimization that allows customers to manage demand uncertainty. There is not much in terms of real-time supply chain analytics, and capacity planning functionalities are light. Lack of e-commerce is another noticeable deficiency. Since web commerce is lacking, the accounting functionality for this operation is tricky to configure unless an add-on solution is used to accommodate new supply chain functionality.

Manufacturing Software

Manufacturing software categories include quality management, manufacturing performance management, lean planning and operations, manufacturing collaboration, product development and manufacturing, enterprise asset management, and batch/process manufacturing.

Since ByDesign is still a relatively new SaaS ERP solution, many of its competitors are well ahead in such areas as depth of lean manufacturing capabilities, rough cut planning, multi-plant capacity planning, manufacturing execution systems (MES) functionalities for shop floor data collection, overall equipment effectiveness, make-to-order (MTO), and engineer-to-order (ETO). The solution also lacks manufacturing project management functionalities.

Because partner certifications for ByDesign are limited, industry-specific packages are few. However, partners are beginning to develop one-off solutions that pertain to individual customer requirements and ultimately industry specific versions will become available. As more partners become certified for ByDesign, we expect to see more software customizations make it to the SAP cloud app store.

Payroll & Human Resources Software

Similar to SAP on-premise systems, human capital management (HCM) and payroll functions include payroll automation, core HR, talent management, HR service delivery, strategic workforce planning, workforce analytics, payroll, workforce deployment, employee file management, organizational visualization, and HR outsourcing.

At this point, Business ByDesign HR software tends to be very broad. Areas of HR software deficiency include e-learning (with employee self service and mobile learning capabilities), mobile employee management, mobile time sheet management, and workforce management. While some of these functions do exist within the software, many are particularly light and organizations are likely to find them inadequate.

A ByDesign add-on specifically designed to bolt onto the SaaS product is PeopleOne. This HR solution's functions include Enterprise Portal and links to finance, procurement, project management costing, timesheet management, expense management, payroll administration and links to third party payroll providers. Facilitation of electronic files between payroll providers and partners is also a feature offered by PeopleOne. As the Business ByDesign partner and ISV channel grows, we expect to see more integrated third party HR solutions in the online SAP Store.

Customer Relationship Management Software

Business ByDesign CRM is often a starting point for SAP's cloud customers. CRM provides a relatively simple gateway for first time cloud adopters who can then add other SAP SaaS functions over time.

With the release of the latest enhancement pack, the CRM functionality has seen an increase in capabilities. Some advanced features are offered as base functionality, but the primary features revolve around account/contact/opportunity/task management. Advanced features, such as marketing automation, campaign management, lead management, service monitoring, and deep analytic functionality, are more limited but now at least loosely embedded into the CRM application.

While SFA capabilities are comparable to most competitor SaaS CRM solutions, SAP leverages its back office integration to enhance sales functions that cannot be matched by CRM-only competitors. Sales people can create quotes, verify customer credit limits, check product availability, process sales orders, suggest up-selling and cross-selling opportunities and review outstanding customer invoices. Clearly having visibility to more customer information such as terms, credit utilization, product purchase history, receivables and sales information delivers a more comprehensive customer view to the sales person.

Marketing is broadly divided into the two functions of market development and campaign management, and in reality most marketing utilization is around campaigns. Marketing provides adequate campaign profiling and measurement, but lacks more advanced lead management and automation capabilities.

Customer service includes customer care, field service and entitlement management. Customer care is primarily a case management function with simple incident assignments, basic escalation rules and limited knowledge management. Field service is more unique among SaaS ERP solutions and automates service and repair tracking, spare parts handling and customer confirmations. This is another CRM function made stronger by tight back office integration, however, until it includes technician dispatch and at least some level of workforce management, it is limited to simple field service shops. Entitlement management is another somewhat unique capability and quite useful for inventory carrying organizations, especially those will serial and lot tracking, product registration, warranty management or service level agreements.

If Business ByDesign CRM is compared to SaaS CRM point solution competitors its likely not to fare well in areas such as social CRM, mobile CRM, Partner Relationship Management (PRM) and the user experience. However, in areas where ByDesign CRM taps into its ERP software components, such as quotes and sale order processing, or entitlement capabilities, it finds relatively unique ground and becomes much more competitive.

Additional ERP Capabilities

Enterprise 2.0 & Social Capabilities

Traditionally SAP has been weak in collaboration for both internal and external sharing, and Business ByDesign is no exception. Although many extensions were built for the on-premise versions that allow the sharing of files externally with trading partners and suppliers, these additions are not yet available with ByDesign. A social collaboration feature is still lacking in the base functionality. Social CRM tools—such as social monitors, sentiment analysis, social network integration, micro-blogging networks, social contact profile data append services, online communities and peer to peer networks—are similarly absent.

SAP's Sales OnDemand product is at this time the company's only social product. Unfortunately, it only integrates with SAP ERP, and is not available with packaged integration to Business ByDesign.

To partially compensate for the lack of social and collaborative components, SAP has introduced StreamWork. StreamWork is an online environment that fosters collaboration with notifications and action items somewhat similar to an internal network such as Salesforce.com's Chatter. This tool can upload documents as well as share and capture knowledge that might otherwise be difficult to capture in non-collaborative environments. It integrates to email, WebEx, and Evernote. StreamWork also extends the collaborative environment to mobile devices such as BlackBerry, iPhone, and iPad. The software is available in three editions—Basic, Professional, and Enterprise—and is priced as a SaaS solution.

As ByDesign gains more partner support, extensions that can add Facebook, Twitter, LinkedIn, and other social network and social media integration may become available.

Reporting and Analytics Capabilities

Users can access role-based dashboards, graphical information embedded in transaction screens, and ad hoc reporting options through SAP Crystal Reports and Microsoft Excel, with drilldown and bottom-up/roll-up functionality to granular ERP and CRM objects such as SKU levels.

A Corporate Performance dashboard displays flexible analytics with one click access to dynamic report lists. Subsequent drill-down analysis as well as mixing variables and applying filters permits deeper investigation.

With ByDesign's project management module available from the PSA version, reporting for project-related tasks, resource scheduling, time management, and expenses is far more manageable, as developing these in past on-premise ERP products was difficult. The dashboards and user-configurable interface simplifies the use of custom programming. The reporting functionality extends to every module within the application.

The inclusion of Business Objects (BOBJ) has vastly improved the analytic capabilities of SAP and its ability to provide enterprise performance management. Business Objects/BOBJ has been included into the latest version and adds business intelligence (BI) functionality and begins to leverage HANA technology, extending real-time visibility and permitting data integration and modeling. HANA is the SAP in-memory database application, which speeds up data querying by residing in computer memory as opposed to hard disk transfer and storage. SAP suggests that by end of 2012, Business ByDesign will use the HANA in-memory columnar database for accelerated and improved business intelligence delivery.

International Capabilities

Business ByDesign supports multiple currencies, multiple taxing methods (i.e. VAT, GST and North American sales tax), multiple languages and is localized and available for purchase in the following countries: Australia, Austria, Canada, China, France, Germany, India, Switzerland, the United Kingdom, and the United States. With future Service Pack releases, additional countries will be supported. All supported countries are hosted from SAP data centers in either Germany or the U.S.

Professional Service Automation

While not necessarily a vertically focused ERP system, Business ByDesign has particularly strong fit for professional services companies. ByDesign supports two way integration with Microsoft Project, permits project type designation (i.e. fixed fee or time & billing), flexible revenue recognition, simple time entry via browsers and mobile devices, the ability to designate skills and competencies as well as acquire and allocate sub-contractor services, and covers the reporting basics with actual, budget, variance and profit reports by project. Some advanced PSA functions such as flexible rules for approving time entry, delivering intelligent alerts when consultants haven't submitted their time (or submitted it incorrectly), measuring WIP and variable-based project allocations are not available.

Software Tools & Technology Review

Business ByDesign is a browser-based cloud solution developed on a multi-tenant architecture and leveraging Microsoft's Silverlight user interface presentation technology. The SaaS ERP system is updated with enhancements and new releases semi-annually. Similar to Microsoft products, where service packs are issued for updates and enhancements, SAP has an enhancement release pack that includes community-driven enhancements, additional feature sets, and improved business process support such as a procure-to-pay option with integration to the SAP Business Suite—a workable solution for processing and automating payments between head-office and satellite offices or subsidiary transfers and billings.

On-Demand Platform as a Service

SAPs on-demand Platform as a Service (PaaS) consists of what the company calls the "Next Generation Core" (based on the Business ByDesign architecture) and "Next Generation Edge" (a lightweight platform that merges SAP's SaaS technologies River (a cloud development framework to connect SAP on-premise systems to cloud apps via a Gateway) and Oxygen (the environment in which StreamWork was developed)). In a more practical sense, Core PaaS services tend to support transactional processing or business processes while Edge PaaS services tend to be lighter-weight and support purpose-based utilities or point solutions. Or from an SAP product perspective, ByDesign and the Line of Business apps leverage the Core while utility programs such as Carbon Impact stem from the Edge.

The Core and Edge extension platform capabilities are also built upon NetWeaver—the same software technology as used with SAP's on-premise systems—and considered the primary service-oriented architecture (SOA) and integration platform. NetWeaver provides the framework for runtime custom development and integration with other applications and systems. NetWeaver was built using ABAP (SAP's proprietary programming language) and other tools.

The PaaS strategy and underlying technologies are intended to support multiple cloud infrastructure options such as the SAP cloud, a private cloud, or a public cloud such as Amazon's EC2. However, at this time not all cloud delivery options are available for each SAP on-demand product (i.e. Business ByDesign is only available on the SAP cloud).

SAPs on-demand PaaS delivers a unified technology stack with a multi-tenancy architecture, standardized UI and integration to SAP Infrastructure as a Service (IaaS) components such as the HANA in-memory computing. The on-demand PaaS permits partner developers and ISVs to build new on-demand transactional and other cloud applications as well as lightweight application extensions to existing on premise (e.g. SAP BusinessSuite, B1) products.

The PaaS UI was built with Microsoft's Silverlight technology, but does not leverage much of the feature-rich and interactive presentation capabilities. This may actually turn out to be a positive thing if Microsoft ends up sun setting Silverlight—a very likely event in our opinion. ByDesign Studio-based add-ons can use web services to access the ABAP-OO-based ByDesign cloud system and leverage ByDesign's Silverlight UI.

System Integration Capabilities

SAP uses open standards for integration, such as allowing C, C++, and Java EE, to facilitate system integration to J2E Server, Microsoft .NET, and IBM WebSphere, all of which are compatible for integration purposes. Since ByDesign is also developed with NetWeaver, many of the integration capabilities are similar to the on-premise versions. The NetWeaver SOA acts as the integration point and as the application programming interface (API) to consume services or connect other applications.

The web interface, cloud delivery model, web services, and SOAP provide integration methods to ByDesign. SAP also certifies its integration partners to verify their industry as well as technical and functional expertise. However, there are few certified Business ByDesign partners at this point, and industry add-ons that are compatible with the on-premise version may or may not be compatible with the SaaS ERP product.

Since most organizations already use Microsoft products, such as SQL Server, Office, and SharePoint, SAP and Microsoft have partnered to deliver two-way integration to leverage the collaboration aspects of SharePoint and Office desktop applications. Duet Enterprise delivers interoperability, building blocks, templates, and tools for developers and IT professionals to build and extend solutions for end users. For IBM users who use the DB2 database and Lotus Notes, another integration solution, named Alloy, is available.

Additionally, SAP has partnered with Google to deliver packaged integration to Google Apps, as well as support for platforms to integrate the Google Android mobile OS and Google App Engine. Programmers will be able to use the App Engine to build applications and integrate them into ByDesign, providing a broader ecosystem to productivity related applications. This integration is not yet available, but expected in the later half of 2012.

Although SAP has several major hardware and software partners (HP, IBM, and Fujitsu, to name a few) that sell appliances with both hardware, applications, and databases, turnkey systems are not necessary with the SaaS option, as the web interface provides the UI, and delivery is handled through the cloud.

Software Customization Capabilities

With ByDesign's newest release, development tools play an important part of system extensibility. The ByDesign SDK (software development kit) is object oriented, Visual Studio-like, based on .NET C#, and uses Silverlight—and ABAP is not a prerequisite.

Beyond the ByDesign Studio SDK, development tools for SAP include the following: 1) ABAP Workbench, 2) NetWeaver Development Studio (NWDS)—an IDE for most of the Java portion of SAP technology, mainly building business web applications but also creating SAP Enterprise Portal projects and SAP Interactive Forms by Adobe, 3) NetWeaver Development Infrastructure (NWDI), 4) Visual Composer—SAP's graphical software modelling tool, a web-based application that permits business process experts and developers to create business application components, without coding, 5) SAP Enterprise Portal Content Studio, and 6) SAP Composite Application Framework—a platform for designing and using composite applications. These tools include SOAP and web services capabilities to ease development woes.

Certified business partners have integration and customization experience to facilitate changes to the ERP software. The SAP partner network also plays an important part in the expert communities. These are forums where partners, corporations, ISVs, developers, analysts and others share ideas and resources to further SAP collaboration. Many of the partners and SAP itself have developed add-ons that extend base functionality or that can be configured to specific organizational requirements.

Many customization options are available for SAP through its own add-on modules or solutions created by partners for unique requirements or industry-specific feature sets. These customizations can be accessed through the SAP Store and partner network. For example, some of the customizations and add-ons available are spreadsheet server, self-service BI, wood/lumber/furniture customization, collaboration and project management applications, email marketing, social customizations (including LinkedIn, Twitter, and Facebook), manufacturing rough cut capacity and cross-plant planning, extended compliant manufacturing integration and pharmaceutical add-on (ECMI), voice picking capabilities, food/beverage, recipe management, ETO, MTO, project management, shop floor data collection, and additional resource scheduling.

Platform changes are also possible. Customers that run IBM applications with a DB2 database can switch to ByDesign's DB2 database. Through a software optimization offered from IBM—IBM DB2—SAP migrates users to allow them use of a DB2 database with Business ByDesign.

SaaS Delivery and ERP Software Pricing

Data Center Hosting and SLA

SAP hosts Business ByDesign from its own data centers in Walldorf, Germany and Newton Square, Pennsylvania. The particular data center for each customer is based on proximity and the two geographically dispersed data centers are not configured in an active/active replication mode for real-time fail-over.

SAP suggests its data centers are Tier IV facilities with equipment and telecom redundancy, inline high availability fail-over, multiple Internet connectivity points and POPs, and third party SAS 70 (now SSAE 16) and ISO 27001 annual audits and attestations.

Although the SAP data centers appear reasonable, they don't appear to match the rigor or investment of some other SaaS ERP and CRM competitors. Service Level Agreements (SLA) are also noticeably lacking, online hosting status and performance visibility (now common among SaaS competitors) is absent and there is conspicuously little information available about data center operations. SAP customers have additional data center and hosting options if they elect to go through business partners. For example, Verizon completed a business partnership with SAP in early 2011, and HP will host on-demand applications from its Enterprise Services data centers.

Third party ByDesign hosting is something we'll likely see more of in 2012 and beyond—tapping into SAPs global hosting partner program for multinationals. Partners at this level include global companies that provide comprehensive service offerings to global customers and operation capabilities with local market coverage. SAP has over 180 hosting partners worldwide and we expect many to offer ByDesign hosting when permitted.

Business ByDesign Software Pricing

Flexible pricing models are available according to the complexity of the solution selected. Pricing from ByDesign reseller partners may vary slightly, but most pricing is categorized by three user levels:

• Self-service users: employees who don't use core ERP functionality but who access self-service functions incidental to their work, such as purchasing, travel and expenses, and human resources.
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• Team users: staff who need access to only one ERP business area, such as sales force automation or basic reporting, to do their jobs.
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• Enterprise users: staff who access core functionality across multiple business areas, such as HR, financial management, and CRM. A minimum of 10 enterprise users is needed to qualify for this pricing category.
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Smaller enterprises might be able to use SAP Business ByDesign, as user counts for self-service users have dipped to as low as 10. A minimum of 10 users are needed to qualify for the team user and enterprise versions. Based on these categorizations, SAP pricing can quickly become complex and start adding up for smaller companies. Below is a chart that outlines Business ByDesign's basic pricing structures.

Subscription prices are per user per month and listed in US Dollars.

Deployment Considerations

Since there are limited ByDesign certification partners at this point, organizations looking for specific industry expertise may have difficulty sourcing local support and partners. Many vertical-specific specializations have not been built yet, so organizations need to understand their business processes from start to finish in order to determine whether the configuration and business agility of the ERP system will accommodate business requirements. As the amount of certified ByDesign partners grow new functionalities and add-ons will be added to the ecosystem to further software fit and collaboration within the SAP community.

For smaller organizations, it is recommended to implement the vanilla "off-the-shelf" solution, as PaaS and customization tools are still young and expanding. Smaller organizations might find it difficult and costly to hire a programmer for customization purposes, and this would materially increase total cost of ownership (TCO) and extend ROI timeframe.

For medium-size and larger organizations that are looking for a cloud solution to employ a two-tier ERP strategy, SAP Business ByDesign might be a good fit. Numerous multinationals use the cloud version because it is capable of many of the same advanced financial capabilities—such as multi-company ledgers—that can easily be consolidated to the head office.

However, the SaaS ERP product is young and add-ons are few, so organizations need to pay close attention to what functionality is included in the base suite. Still, ByDesign remains a good ERP solution compared to many other SaaS options.

Business ByDesign Strengths & Weaknesses

Competitive positioning in the ERP software market is highlighted with the following strengths and weaknesses.

SAP Business ByDesign Strengths

• The Business ByDesign platform is the basis for SAP's cloud strategy; over time additional cloud solutions—such as Sales OnDemand or the Line of Business cloud solutions—may be added or plugged into the framework for expansion.
• Business ByDesign is one of a few enterprise-wide SaaS ERP applications. The cloud system delivers fully integrated ERP and CRM functions designed to meet the objectives, requirements and budget constraints of its SME target market.
• The Platform as a Service (PaaS) framework and cloud delivery may make system integration a little easier compared to the on-premise systems.
• The SaaS ERP software is very modular and scalable; facilitating a phased implementation approach whereby customers may add new modules over time or as required.
• Basic workflow design in broadly embedded throughout the application. There is generally more workflow flexibility and opportunity for business process automation than with on-premise ERP systems Business One or Business All-in-One.
• Industry best practices are designed into pre-configured workflow processes and SAP offers a mature knowledge base of best practices by industry on its ecohub for partner and customer usage.
• Some of the ByDesign add-ons from SAP are free for download from the SAP Cloud App Store.
• While Business ByDesign partners are few, customers may be able to leverage the experience of longtime integration and implementation partners through the SAP partner ecosystem.
• SaaS ERP pricing is competitive. Maintenance and support are included in the monthly subscription fee.
• The ERP software supports ubiquitous browsers, mobile devices and tablets.

SAP Business ByDesign Weaknesses 

• Since its introduction of cloud business systems in 2006, the company has incurred product recalls, product terminations and numerous product delays. False starts, missteps, poor go-to-market execution and confusing messaging regarding a clear cloud strategy cause many to question the company's commitment and capabilities to SaaS and cloud delivery. SAP says it is "all in" when it comes to the cloud, but many remain skeptical.
• SAP is moving forward, but playing catch up in the SaaS market, as smaller but more innovative vendors such as Salesforce.com and large vendors such as Oracle have achieved early market gains and continue to acquire increased cloud market share.
• While ByDesign does include some workflow automation, it is need of a real workflow engine in order to create and modify existing workflows—for example, to change processes, reduce the number of steps in a process, bypass required approvals, simplify processes or create new automation.
• We have heard customer complaints of poor online performance. It is unclear to us whether such complaints stem from OLTP throughput, latency, the Microsoft Silverlight presentation layer or something other.
• At this point the Business ByDesign ecosystem of integrated third party products and extensions is extremely limited. Most software add-ons created for on-premise versions do not work with SaaS ERP.
• There are very few Business ByDesign-certified consulting partners, so finding trained and skilled local help for deployment, integration and customization may be difficult.
• Many of the ERP software functionality weaknesses from the flagship on-premise applications have trickled down to the SaaS ERP application.
• Business ByDesign subscription pricing is competitive, however, total cost of ownership may quickly rise if additional SAP or third party licenses are needed for add-on solutions.
• With the exception of Professional Services Automation, a lack of industry-specific functionality or add-ons largely limits Business ByDesign to horizontal ERP deployments.
• Limited data center locations, lack of service availability online monitors and poor Service Level Agreements position Business ByDesign hosting behind more cloud-savvy competitors.
• The SaaS ERP is not as widely available as the on-premise solution, and today only available in Australia, Austria, Canada, China, France, Germany, India, Switzerland, the United Kingdom and the United States.

Business ByDesign Best Fit and Competitors

Sweet SpotERP software buyers should consider Business ByDesign when:

• You are an midmarket organization looking for an enterprise-wide SaaS ERP system or a strong cloud-based supply chain ERP system.
• Your organization seeks a two-tier ERP strategy and desires a SaaS ERP system for subsidiaries, smaller lines of business or remote locations.
• Seeking cloud based ERP software for Professional Services Automation (PSA) or a service-based industry, including business services, creative, ICT, agency or research.
• You are looking for a SaaS based line of business software as an entry point for specific functionality (i.e. CRM, SCM, Financials or PSA) with the plan to incrementally add more integrated applications over time.
• Looking for a highly configurable cloud ERP system to accommodate business agility—with available PaaS toolkits for greater extensibility.

Alternative SolutionsERP buyers may be best advised to consider an alternative solution when:

• Only seeking a departmental or line of business software solution. Cross-departmental business process automation is a strength of ByDesign, however, isn't possible for customers deploying single department functions such as financial accounting or CRM. In this later case, customers are advised to seek out best of breed line of business applications.
• Business ByDesign software fit is low. Because the SDK and PaaS solutions are still in early versions, and extremely limited, it would be a mistake for customers to pursue a strategy of material software customization to remedy a poor fit or missing functionality.
• Looking for an on-premise or private cloud ERP software solution.
• Looking for an industry-specific or vertically focused ERP system.
• Seeking Enterprise 2.0, social enterprise or social CRM capabilities.
• Your organization falls outside the supported Business ByDesign countries of Australia, Austria, Canada, China, France, Germany, India, Switzerland, UK and US.

SAP CustomersExisting SAP customers are advised to:

• Consider Business ByDesign if you're a Business Suite customer seeking a tier 2 ERP or CRM system. Determine which integrations exist between Business Suite and ByDesign and discuss SAP's Business Network Integration (BNI) to understand how a tier 2 solution can be practically implemented.
• Review ByDesign if you're considering a move from an existing SAP on premise product, such as Business One or Business All-in-One, to the cloud.
• Connect with your SAP representatives to get detailed product roadmaps and pricing announcements so you may understand how and when ByDesign may deliver new capabilities to your existing SAP infrastructure.

Business ByDesign Competitors

Within the cloud and Software as a Service market, primary Business ByDesign competitors include NetSuite, Oracle Fusion and Salesforce.com with any of its accounting/ERP AppExchange partners such as Intacct, FinancialForce or Workday.

From a delivery agnostic perspective, additional Business ByDesign competitors include Infor, Microsoft Dynamics (AX, Nav, GP and SL), Oracle and Sage.

Concluding Remarks

Despite being a latecomer to the SaaS industry, the SAP brand carries weight to warrant ByDesign being included in a SaaS ERP software evaluation process. The company is a clear ERP leader and in position to begin a long-term transition of functional depth from its on-premise products to the cloud market.

However, SAP's commitment to the cloud is uncertain—and its grasp of cloud applications is even less so. Business ByDesign has incurred failed implementations, recalls and repeat delays. In 2007 the company forecast 10,000 Business ByDesign customer acquisitions by 2010. It finished 2010 with about 100 customers. However, in 2011, the company level set new expectations and predicted 1,000 ByDesign customers by the end of that year. The mark is low, but SAP is for the first time meeting expectations.

Business ByDesign is a legitimately strong SaaS ERP solution, however, customer acquisitions have been lack luster at best. Having failed to gain cloud traction over a five year period, in early 2012 SAP acquired SuccessFactors and placed its CEO, Lars Dalgaard, as its new cloud maven. This represents the next chapter of SAP's move to SaaS, however, if and how Lars is able to redirect SAP to capitalize on the cloud and ultimately become a formidable competitor remains to be seen.