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Author's profile photo Leonardo Araujo

“I am in the Manufacturing Business; not IT…” – Breaking into the Small market – The positioning of SaaS and IT outsourcing

While it has become clear that IT structure are often heavy and hard to justify for large and medium companies, it is almost a given for small companies. Through the last years, we’ve seen a growing number of IT solutions outsourced. In the SAP arena, we most naturally think of the IT infrastructure. It is easy to draw the line of what should be done in and out of the company when talking about servers and its maintenance.

Server operations require specific skillset, cost a lot of money and ultimately don’t add a lot of value to the end mission of the company. It is an important enabler, but nothing else. Small and medium companies need a reliable environment to work on, but it is hard to justify the maintenance of 3 servers (just for ERP), with backup, disaster recovery, maintenance, uptime commitment, etc. Sure you still need 3 environments no matter if in house or not, but do you have the skillset to do it efficiently?

So we assume now that it is understood that the infrastructure could and should be outsourced at least in some way. After all, like we used to say in the early “reengineering” times or when the outsource wave started to hit, “my company sells tires, gardening and cafeteria are not my core business”. Of course this is a rather simplistic example, but for a small company, let’s says a chain of restaurants or a t-shirt re-seller, holding those activities in-house will never guarantee ROI… But for these companies (Small and even Medium size businesses), a lot more is needed. IT operations, as a whole, should also be outsourced, this including support, implementation, maintenance, development, etc.

Running IT operations require an important structure. Management with knowledge and vision, best practices, standards (ITIL, maybe?), proper skillset within the team and the right use of the right tools are just a few of the requirements for any IT support team, but very few are able to deliver them completely (even in large organizations).

Why? The answer is clear: “we run a business, not IT”

So while for the medium market some hybrid solutions may be best fit, depending on the case, for small market, to really be able to compete with other solutions out there, SAP needs to get to the point where SAP software runs as SaaS (Software as a Service). As an example; for our consulting company, we needed software to control timesheets so all this data could be easily compiled for billing purposes and tracking. We got a SaaS solution we are quite happy with. I don’t care where they run it, how, all I know is that I pay a subscription fee per seat, per year. No deployment, the application is available on the WEB.

Sure the example is another simple one, but couldn’t we have SAP software running like that? Sure we can, in fact that is SAP Business ByDesign.

SAP Business ByDesign is now in its 4.0 Feature Pack, It is available in 15 countries and in 10 languages.

Check it out at

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      Author's profile photo Former Member
      Former Member

      Spot on. Especially in the SME market, there's no value in IT when you can consume what you need at any time from anywhere.