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SAP Business ByDesign Fit & Competitors

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Business ByDesign Best Fit and Competitors

Sweet Spot
ERP 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 Solutions
ERP 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 Customers
Existing 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 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.

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Guest Chris Nichols
  At the 2011 CeBIT tech conference in Germany, SAP co-chairman Jim Hagemann Snabe said SAP looked to grow its annual revenue from €12.5bn to €20bn in 2015, predicting that a "substantial" portion of the increased revenues will be from Business ByDesign. Better integration to the SAP Business Suite / ERP will help sales efforts by acquiring more Tier 2 ERP deals, largely within the existing SAP customer base. However, suggesting that Business ByDesign sales will have such a material impact to SAP's total revenues looks like a fantasy. After missing the original Business ByDesign forecasts (from former CEO Henning Kagermann) by such gross amounts, I would think the company would be more cautious when setting expectations for a product that has had real problems in acquiring customers.

Guest Denise Johnson
  The SAP review suggests using ByDesign as a tier two system. If trying to achieve company-wide consistency I'm not sure I see advantages of subsidiaries using different erp systems than the parent company.
  Chuck Chuck Schaeffer
    Business ByDesign for smaller subsidiaries of parent companies running SAP ERP or Business Suite may be a good option. While enterprise-wide consistency should certainly be considered, its also important to review the objectives and constraints of each organization. Large companies generally insist on IT and business standards, rules and governance, and employ sufficient IT staff to ensure their objectives. Many times these companies will adapt their business processes to accommodate their business software.

In contrast, smaller organizations (including subsidiaries of large companies) prioritize business agility and flexibility in order to support business growth. In fact, many would say that overarching standards kill speed to innovation and act as impediments to business acceleration. These executives believe the business software should accommodate the business; not the other way around. These organizations have fewer IT resources, and fewer IT specialists, so accelerated deployments (fast time to value) and cloud delivery or otherwise off-loading IT management and maintenance activities are preferred. These organizations often don't need as much integration or business intelligence (BI) as their larger parent companies, but prioritize other capabilities such as the user experience more so than their parent companies. Other factors may also come into play, for example, separate IT among parent and subsidiaries may actually be helpful for companies active in M&A, particularly where divestitures occur regularly. The objectives of each organization must be reviewed in order to figure out the best alternative.

Guest M2M
  My company is a long-time Microsoft Dynamics VAR and we're considering becoming an SAP ByDesign partner. It seems odd that SAPs partner channel remains small after this long. Do you think this is a result of the product?
  Chuck Chuck Schaeffer
    Not really. I'm not well versed on the administrative side of SAP's channel programs, but I speak with SAP partners regularly. With regard to ByDesign partners, I've been told with some consistency that the programs are cumbersome with contractual matters and even expose partners to potential liabilities for customer non-payments or non-renewals. More so, it seems the partner enablement periods are lengthy, often taking 3 to 4 months to ready consultants for implementations. This makes staffing up in advance expensive, and quickly scaling difficult. I suspect SAP is applying an on-premise mentality to a cloud program. Cloud deployments are different. Among other things, they focus on business issues and process automation, not software or technology mechanics - and they must done in shorter periods to achieve customer objectives. These are just my observations and I recommend you speak directly to SAP.

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