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8/4/2011
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SAP Brings Your Subsidiaries, HQ Closer

Your headquarters wants to run SAP on-premises software, but subsidiaries want Business ByDesign SaaS suite? No problem, says SAP.

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SAP launched version 3.0 of its Business ByDesign software-as-a-service (SaaS) suite Thursday, adding yet another option to integrate subsidiaries running on the platform with headquarters operations running SAP on-premises software.

To better support so-called two-tier deployments, with subsidiaries and satellite operations using the simpler, lower-cost SaaS suite, ByDesign version 3.0 integrates procurement processes with headquarters operations running SAP's Business Suite software.

As customer orders come into a subsidiary running on ByDesign, purchase orders can automatically be sent electronically from the subsidiary to the enterprise resource planning (ERP) system at headquarters. This gives managers in both locations a single, real-time view of available stock for more accurate inventory and demand planning.

SAP says ByDesign will support at least 14 subsidiary-to-headquarters integration "scenarios" by next year. The SaaS suite is on a six-month update cycle, making version 3.0 the second major upgrade this year. Version 2.6, which was released in February, included integrations for financial consolidation, chart of accounts, material master data, and procure-to-pay processes.

ByDesign was originally envisioned as a suite for small to midsize businesses (SMBs), but enterprises running SAP's on-premises software have pushed for subsidiary-integration options. Other integrations planned for future releases will support human resources functionality (such as employee self-service and reporting), corporate analytics, sourcing of supply, contract sourcing, and sales pricing. SAP has not said which upgrades will be included in which of next year's two planned releases.

Within the SMB segment, SAP is hoping to gain market share among professional services organizations with ByDesign, as that's a market that's currently dominated by aging on-premises PeopleSoft and Lawson deployments (software now owned by Oracle and Infor, respectively). With this in mind, version 3.0 includes improved professional services-oriented functionality including customer contract management and revenue recognition. The latter helps consultants and contractors appropriately split out revenues for areas such as hardware, services, and subscriptions.

In other 3.0 improvements, ByDesign mobile support has been extended to Windows Phone 7. In addition, the suite's online community, which has been active in German-speaking countries through the first half of 2011, has been extended to English-speaking customers. This online customer-feedback channel is used to gather ideas and suggestions for new features and improvements. A Chinese version of the online community is planned for later this year.

In an expansion of ByDesign's global footprint, the service is now available in Australia, and a Spanish-language version of the service is making its debut in Mexico.

SAP reported last month that at least 550 customers are now using ByDesign, and more than 1,000 are expected by year end. It's a cautious, controlled release for SAP in terms of scale, but with the expansion of subsidiary-integration options, customers are clearly making their mark on the direction of service development.

ERP is old news, but enhancing legacy software with mobile, analytics, and social apps can deliver substantial new value. Also in the new, all-digital issue of InformationWeek: SaaS can create new data silos unless companies follow best practices to make those apps work with on-premises systems and data sources. Download the issue now. (Free registration required.)

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