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Enterprise Resource Planning (ERP) for Small and Medium Businesses (SMB)

03/01/2010

Enterprise Resource Planning (ERP) for Small and Medium Businesses (SMB)

David Sugarman דיויד שוגרמן

A new way to manage your company`s data

The Need

¥     An ERP software allows businesses to improve their margins and competitiveness by automating internal processes and improving visibility into business operations

¥     Most common ERP solutions are not cost-effective for SMB. Even the latest Oracle-easy application aims at target markets of $15-30M annual revenue at a sale cost of more than $130K per system

¥     Many SMBs are deprived of an ERP solution due to cost and complexity of installation and use.

The Solution

¥     An ERP-CRM-BI solution based on MS Excel

¥     Computerize, link and manage business activities and processes such as customer service, logistics, sales and finance

¥     Integration and standardization of data (single source)

¥     Standardization of work flow and processes

¥     Reports (management, operations, sales, finance)

¥     Fully mirrored data scheme

Market Background

¥     Worldwide ERP market is estimated at $20-25B.

¥     Israeli market is estimated at $400M.

¥     SMB segment is under focus by ERP providers as market of substantial growth with respect to ERP market demand (5-10% annually)

¥     ERP for SMB in Europe is currently estimated at $4-6B

Target Market

¥     SMB in Israel (later international). Business of up to $10M annual revenue

¥     Non-manufacturing retail and services market segments

¥     Hebrew, Arabic, English and French oriented

¥     Accounting firms

Business Models

Business Model Type /
Particulars

Direct Sales

Subscription

Value Added Resellers (VARs)

Services

organizations

Target customers

High end of SMB

Small and Medium businesses

Business partners and distributors

Service providers

Revenue stream

Transaction based

Ongoing

Transaction based

Transaction based

What is to provide

Unlimited time licenses

Duration based licenses

Unlimited time licenses

Unlimited time licenses

Business relationship with customer

Tight, transaction based

Tight and ongoing

Tight and ongoing

Tight and ongoing

Payment method

Regular

Internet

Regular

Regular

Unit price ($)

20K

800 per month

5K

10K

Technology

¥     ERP system based on MS Excel. Incorporates algorithms, and frequently used business processes of various business types.

¥     Main Modules:

¥     Warehouse

¥     Customer Service

¥     Technical Support

¥     Sales

¥     Management

¥     Finance

Competition – Giants

SAP

Oracle

Microsoft

Description

The leader in SMB ERP with an all-in-one ERP solution

Based on Oracle’s Accelerate, offers more than 20,000 possible solutions

The leader in SMB Middleware

Business Model

Strong solutions-centric ecosystem through its PartnerEdge program

New pricing models, solutions catalogs, collaborative campaigns, referral fees, and partner loyalty program

Relies on partners to deliver sales, implementations, and additional micro-industry functionality

Recent Investments

Acquisition of TopManage Financial Systems

Acquisition of PeopleSoft, JD Edwards

Acquisition of Great Plains and Navision

Weakest Vertical Market

Healthcare

Healthcare

No information was available

Total SMB revenues for 2006 (US$ in millions)

$2,563

$2,328

$989

Competition – Smaller Vendors
Excluding SAP, Oracle, Microsoft

Company

SMB Revenues (US$ millions) in 2006

Intuit

$2,198

Infor

$2,075

The Sage Group

$1,873

Lawson

$664

Epicor

$384

IFS

$327

Exact Software

$304

Agresso

$298

Others (total)

$1,327

Differentiation

¥     Cost effective ERP solution for the SMB market

¥     Entry barriers – built-in comprehensive framework with many ready-to-use designated functions for the SMB market

¥     Intellectual property registration in process

¥     Main advantages

¥     Built on top of MS Excel. No need for heavy-weight HW/SW infrastructure and tools

¥     No need for dedicated IT personnel support

¥     Easy to integrate into the company’s IT processes

¥     Ease of use – leveraging the simplification of MS Excel

¥     Solution simplification enables diverse revenue streams

¥     Significantly lower total cost of ownership – starting at 5K$ per installation plus 800$ per seat

Financials

TBD

Status

¥     First system in production since 2006 in a virtual private operator cellular company in Mali

¥     Two pilot systems are planned to be implemented in a medical device sales company and a media publishing company

¥     Plan penetration to Israeli market in 2009

¥     Plan to raise seed money of $1.5M

מערכות erp לארגונים קטנים בינוניים בארץ

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