As the Russian economy goes, so goes the ERP market in Russia. Over ten years ago, the general perception of the Russian IT market was that exceeding sales expectations there was not exactly a walk in the park when compared with Western markets. However, some sizable opportunities were waiting there. Later, in 2015, the Russian IT industry was considered to be one of the fastest growing markets, with 50% of ERP market share belonging to SAP.
SAP Business One vs. S/4HANA
The SAP product portfolio boasts two market-leaders in Russia: Business One and S/4HANA. Both of these solutions can integrate different business functions and provide companies with plenty of advantages, including automation of processes, reduction of transaction costs in the long run and operative optimization.
Nonetheless, there are some significant discrepancies between Business One and S/4HANA which are highlighted below. It can be noted that the solutions are similar in terms of some technicalities. For instance, they both use SAP HANA for in-memory database technology, but their functionalities differ. This is simply because these solutions have been designed to suit the needs of two distinct types of companies.
Business One is, indeed, the preferred alternative when the company is small in size. In particular, it provides many benefits for businesses with limited financial resources but high growth potential. In fact, not only is SAP Business One relatively affordable but it also allows for complete scalability, as the solution can be implemented either as a whole or by picking and choosing selected parts of it modularly, depending on the company’s specific needs. Of course, subsequently integrating new modules to Business One is also no problem. As the business grows, Business One can be up-scaled to grow with it.
Moreover, Business One offers a monthly subscription-based pricing structure, based on the number of users. Finally, it consists of one unique solution that can run both on SAP HANA and Microsoft SQL servers. All in all, this means that each business can personalize its own ERP system, according to its current needs, capabilities, and maturity as a business.
On the other hand, S/4HANA is a cloud-based ERP solution that was ideated for large and stable businesses. When compared to Business One, S/4HANA’s cost is not only higher but it also provides many more functionalities. It is able to integreate each and every business function and to deliver predictive analytics and essential insights through the use of Big Data, IoT, and intelligent applications. Moreover, it comes complete with machine learning technology, which fosters organizational agility and efficiency. It is specifically designed to suit the needs of businesses that have considerable financial resources and a consolidated structure along with high operational complexity.
Business One and S/4HANA both deliver abundant strategic advantages to companies. While S/4HANA is naturally more comprehensive and is the premium choice for medium and large enterprises, it also has a much higher price tag. Business One, on the other hand, has fewer functionalities but it is also much more affordable, scalable and is easier to implement—all of which make it much more suitable for smaller companies.
So which solution should you implement in the Russian market?
Within the Russian market, SAP has worked mainly with large companies even though it has products that can perfectly meet the needs of small and medium enterprises. Nevertheless, since SAP has targeted primarily large enterprises, the suggestion would be to leverage that strength and secure fruitful contracts with organizations that are significant in size. If SAP resellers are approached by a client company whose size does not correspond to the ideal target customer of S/4HANA, Business One could be implemented as a valid alternative.
In the EU, smaller businesses have been targeted by Business ByDesign. In this regard, we had an insightful conversation with Tatiana Shangina, SAP Solution Architect at TeamIdea, which is a UnitedVARS member operating in Russia. In the course of the conversation, it emerged that it is impossible to offer Business ByDesign in the Russian market. In fact, Tatiana explained how local laws require personal data storage to be hosted in Russian datacentres based within the Russian Federation, which is not possible for ByDesign. Tatiana Shangina summarized the available options:
- Business One and S/4HANA Private Cloud for small and medium enterprises, respectively, or
- S/4HANA on Premise for larger enterprises.
Teamidea is an SAP Platinum Partner, a United VARs member operating in Russia. The company has strong expertise in such areas as e-commerce, warehouse management, wholesale and retail trade, production, etc.
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