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- ERP Software
While SAP has established itself as the household name in the market for about five decades, it's mainly known for its enterprise-level ERP software products such as SAP ERP and SAP S/4HANA.
However, SAP has also had a longstanding presence in the small- and medium-sized enterprise (SME) segment of the ERP market with SAP Business One.
Designed for SMEs which have grown beyond entry-level accounting software such as QuickBooks and Xero, SAP Business One gives you complete visibility and control over the entirety of your business operations.
Business One has also been a household brand name in the SME-level ERP software market for almost 20 years.
Because SAP Business ONe easily integrates and shares data with other SAP products, it's favoured by subsidiaries of larger enterprises that are already using enterprise-level SAP products such as S/4 HANA.
This has led to SAP Business One being one of the best-selling ERP software for SMEs of all time, with many businesses relying on it to drive their business growth over the years.
But you’re not here to learn whether SAP Business One is a popular product. You’re here to find out whether it’s a good ERP software.
What are the features and functionalities that SAP Business One brings to the table? What are its strengths compared to its closest competitors? And can it cater to the unique business needs of your SME?
In this guide to SAP Business One, we’ll be giving you an in-depth look into SAP’s flagship ERP for the SME market, and provide answers for the most common questions you might have about the ERP software.
While we're at it, if you'd like to download the solution brief for SAP Business One for later reading as well, you can do so by clicking on the image below.
Although SAP has long been known in the industry for developing robust ERP solutions in-house, you might be surprised to find out that SAP Business One is an exception to this rule.
In fact, the original version of the ERP software was developed by the Israeli software company QuickSoft, and it was first launched in 1996 under the name “Menahel” (or “TopManage”).
TopManage was an innovative software product based on the then-new Windows OS, and was created with the goal of penetrating a market that was dominated by MS DOS-based accounting software at the time.
To market and sell the new ERP software, QuickSoft spun off TopManage Financial Systems in the same year the product was launched. The company initially sold its ERP software only in Israel, but began expanding into markets in Europe and Latin America in 2000.
SAP’s involvement with the ERP software began in 2002, when the German multinational software company acquired TopManage Financial Systems.
Although SAP was already well-known at the time as a developer of robust ERP solutions for global enterprises, the company did not have a suitable product for SMEs at the time.
The acquisition of TopManage thus gave SAP a lean, easy-to-use integrated business solution designed for the specific needs of SMEs, which was what the subsidiaries of their SAP R/3 (now SAP ERP) customers needed to manage their smaller-scale business operations.
It also gave SAP a foothold into the SME market, which had been a missed opportunity for the company for years.
TopManage was subsequently rebranded as SAP Business One in 2004, and SAP invested significant resources in upgrading the capabilities of the ERP software over the years.
These include the integration of SAP Crystal Reports in 2010 with SAP Business One Version 8.8, and the introduction of support for the SAP HANA relational database management system in 2012 with Version 8.82.
In recent years, SAP have gradually transitioned the originally on-premise Business One software towards the cloud.
The latest example of this was the Version 10 product update released in 2020, which introduced a native Web Client exclusive to the SAP Business One version for SAP HANA.
Apart from these, if you'd like to learn what else was introduced with the Version 10 update, click the image below to download a resource which'll give you the full list of new features.
As an integrated business management solution, SAP Business One offers a full set of key features to help you maintain visibility and control over your business.
By streamlining key operational processes and using raw data generated from them to provide you with real-time insights into your business, these key features inform your business decisions so that it effectively drives the profit margins and growth of your SME.
Here are the key features of SAP Business One which are applicable to the operations of most SMEs like yours.
Image: SAP Business One Financials
SAP Business One provides a complete set of tools that manages and streamlines your business's financial operations. With these tools, you can automate your everyday accounting tasks, and conduct all of your banking activities.
It also integrates your financial processes in real-time with other processes across your business - such as purchasing and sales - to improve cash flow visibility and speed up your transactions.
These are some of the ways SAP Business One optimises the financial management of your SME:
Image: SAP Business One - Sales and Service Management
SAP Business One provides CRM tools to help you manage the entire sales process and customer lifecycle from end-to-end, and provides a complete view of your leads and customers to help you better meet their needs.
This helps you convert your leads into customers, increase their level of satisfaction with your service, and thus maximise the sales and profitability of your SME.
The CRM functions of SAP Business One are labelled as “Sales Opportunities”, and can be found in the Sales Order section of the ERP software. This helps your sales team:
Image: SAP Business One Inventory and Purchasing Control
Your SME will need a systematic approach to managing the procurement process from end-to-end. This includes requesting vendor quotes, to creating purchase requests and making payment to vendors.
SAP comes with robust stock control and purchasing tools designed to manage the complete order-to-pay cycle - including receipts, invoices, returns and payments.
With these tools, you can:
Image: SAP Business One - Business Intelligence
SAP Business One comes with a complimentary and integrated version of SAP Crystal Reports, which provides built-in analytics and reporting tools that generate accurate, timely reports using data drawn from across your business, and gives you actionable insights into your business.
If powered by SAP HANA, Business One exploits in-memory computing capabilities to give you real-time access to pre-defined dashboards and reports, as well as tools to support your decision-making.
These tools allow you to:
Of all the ERP software products available in the market for SMEs like yours today, why would you want to implement and deploy SAP Business One for your business?
It’s because SAP Business One brings certain strengths to the table, which gives it an advantage over its competitors in the same market space. Here are some of the most well-known of them.
Within the market space of ERP software for SMEs, SAP Business One is particularly well-known for the robustness and depth of its inventory management features and functionalities.
This is thanks to its Materials Resource Planning (MRP) module, which makes Business One suitable for businesses with manufacturing and inventory management requirements.
It’s an advantage that’s not available with entry-level accounting software, and even some of its peer ERP software products.
Because of this, SAP Business One is particularly suitable for SMEs which operate in the following sectors:
For businesses in these sectors which are planning to embark on a digital transformation effort, this makes the ERP software an ideal first step to take.
For example, if your business is a wholesaler, click the image below to learn how you can leverage a digital solution like SAP Business One to drive business performance.
SAP Business One began life as an on-premise solution, and many customers of the ERP software are still using it as such, implemented on physical servers within their own office premises.
Therefore, if you’re not interested in a cloud implementation and would rather house your ERP software within your own offices, Business One is certainly a viable choice for you.
That said, you might have come across opinions that SAP solutions like Business One are not suited for being hosted on a cloud environment. Allow us to assure you that is, in fact, not true.
In fact, SAP has invested significantly in making SAP Business One not just viable, but also powerful as a cloud-based ERP.
This is especially true with SAP Business One Version 10 – the latest update for the ERP software – with the introduction of the native Web Client, as well as the SAP Fiori layout.
This means that if you require a cloud-hosted ERP software, it’s perfectly viable to deploy and use Business One as such a solution.
While this would require hosting it on SAP HANA to make that possible, this means you can enjoy the robust features and functionalities of an SAP solution on the cloud.
If you'd like a solution brief for the cloud-hosted version of SAP Business One, you can download it by clicking on the image below.
If your business has unique, industry-specific needs that aren’t addressed by the core features of an ERP software, you’ll be glad to know that SAP Business One has long had a reputation as a highly adaptable and flexible ERP software.
Thanks to the fact that it’s always had strong application programme interfaces (APIs), it’s easy for developers to build extensions and add-ons that integrates with Business One, and enhances its capabilities.
SAP has also developed a vast partner ecosystem of system integrators and value-added resellers (VARs) for Business One over the years.
As a result, these partners have developed more than 400 add-ons that extends the capabilities of Business One with functionalities that address these industry-specific needs.
As such, if the extensibility of a solution is a major requirement for your business, it’s hard to find a competing product that beats SAP Business One in that regard.
Image: SAP Business One - Hana
With SAP Business One, you get to choose between hosting the ERP software on a Microsoft SQL (or MSSQL) server, or alternatively on SAP’s proprietary HANA in-memory relational database.
While Business One is a reliable solution when running on MSSQL, its true potential is truly unleashed should you choose to run it on SAP HANA instead.
With SAP Business One on SAP HANA. you’ll unlock bonus features and advantages such as:
If you want to know more about just how much more powerful SAP Business One is on SAP HANA, click on the image below to download the free solution brief.
Although SAP Business One has a lot of strengths as an ERP software for SMEs, it’s not without its limitations.
If you’re seriously considering implementing SAP Business One for your business, here's what you need to consider before you do so:
SAP Business One is designed as an ERP software that can serve the needs of SMEs in a wide range of sectors. As such, its built-in analytics and reporting tools are based on standard best practices, and are more than sufficient for your business needs in most cases.
On the other hand, if your SME has more complex reporting needs due to the industry it’s operating in, Business One does not come with the industry-specific reporting capabilities required to meet them out-of-the-box.
If you want access to such advanced reporting capabilities within Business One, you’d have to integrate 3rd-party add-ons that specifically extend such features to the ERP software.
Luckily, as we covered earlier, the large partner ecosystem of SAP Business One means you’d almost certainly be able to find what you need from the more than 400 add-ons available to the ERP software.
As an ERP software, SAP Business One is primarily intended to support your SME in the areas of financial management, as well as inventory management.
While it excels at both of these key features, it also means that when it comes to features beyond the core value proposition of Business One offer only basic functionality.
These features include:
To gain access to more advanced functionality for these features within Business One, you'll need to integrate it with 3rd party solutions that incorporate them into the ERP software.
This can be done by using APIs to do so, which will extend the capabilities of these non-core features in SAP Business One accordingly.
SAP Business One is well-known in the ERP software market for SMEs as a solution with a robust set of features.
While this is a strong advantage for the ERP software, it also makes Business One a much more complex solution when compared to entry-level accounting software such as QuickBooks.
Thus, SMEs which are making the transition from accounting software to ERP software might find themselves overwhelmed with the complexity of SAP Business One, especially when it comes to implementation and end user training.
To ensure a successful implementation and deployment of Business One, you’ll therefore need the services of an experienced SAP partner to set up the ERP software such that it best fits your SME’s particular set of business needs.
The robust features of SAP Business One will also offer limited value for your business, unless you already have the necessary accounting and IT expertise within your SME to make full, productive use of them.
Therefore, you’d also have to ensure that your end users have the right skillsets to use Business One to its full potential, and produce the maximum value of the ERP software for your SME.
If you’re interested in acquiring SAP Business One for your SME at this point, here’s what you need to know about the software licenses available for the ERP software.
Perpetual licenses can be purchased to give a user access to the features of the on-premise version of Business One. They’re priced according to a named-user basis, and there are several types of these licenses. They are as follows:
On the other hand, if you’ve chosen to use Business One as a cloud-based solution, you’ll have to pay for the use of the ERP software on a monthly or annual subscription basis instead.
You should be prepared to commit to the use of SAP Business One on the cloud for a minimum of 12 months’ service. However, since longer commitments result in lower per-month costs, 3-year contracts are the most common commitments amongst Business One cloud users.
Apart from developing third-party add-ons, SAP relies on the partner network it has built for SAP Business One to sell the ERP software to customers.
These partners are also responsible for providing implementation services, as well as IT support for Business One after the implementation.
The cost of implementing SAP Business One is not published anywhere, and if you want to know how much it will cost to implement the ERP software for your business, you should consult with a certified SAP partner to get an estimate.
That said, we’d advise that you set aside a budget of S$10,000 at the very least for a base implementation of SAP Business One, including third-party add-ons and provision of training in the user of the ERP software for your employees.
If your available budget is less than the aforementioned amount, you may want to consider more affordable entry-level software instead, such as QuickBooks or Xero.
Alternatively, you might like to know that SAP Business One qualifies for funding support under the Productivity Solutions Grant (PSG).
To summarise, if you’d like to embark on an SAP Business One implementation project for your SME, you’d need an SAP partner to assist you with the implementation, and you might also want to apply for the PSG as well.
At this point, you may like to know that not only is AFON the only 7-time SAP Business One Partner Award winner in Singapore to date, we’re also a pre-approved PSG vendor for the ERP software.
Over the years, many of our customers have been greatly satisfied with the performance of SAP Business One, and the positive impact the ERP software has had on their business operations.
Here are five customer testimonials of their experiences with Business One, and what it’s done for their businesses:
After implementing SAP Business One, Huber’s Butchery – the premier producer, retailer, and supplier of meat products and services in Singapore – experienced improvements in their stock control and traceability processes thanks to the ERP software’s batch inventory capabilities.
This has led to a significant reduction in product wastage, and led to an increase in revenue for the wholesale distributor.
With a mobile solution for Business One integrated with the ERP software, Huber’s employees could also create sales orders on the go, and retrieve the sales data of customers as necessary.
This eliminated operational efficiencies and improved the quality of their customer service, leading to greater customer satisfaction and an increase of 40% in revenue.
"SAP Business One HANA is able to provide the scalability to match our requirements for increased customer satisfaction, reduction in waste and continuous growth for the future," said Ryan Huber, the Managing Director of Huber's Butchery.
Originally reliant on QuickBooks, Pasture Pharma was finding that the inability to integrate their entry-level accounting software with their POS system and PharmacyWire dispensing delivery system.
This led to a lot of time wasted tracking customer orders manually, and the pharmaceutical company sought a solution that could make their accounting and order tracking more efficient.
With SAP Business One deployed, Pasture Pharma had a solution that could be integrated with PharmacyWire, greatly improving the productivity and efficiency of their business operations across the board, and boosting turnover by 100%.
"When AFON approached us to offer their services, their Consultants' knowledge and commitment made the difference," said Lloyd Soong, the CEO of Pasture Pharma. "It is not just SAP systems, it is SAP + AFON = Pasture satisfaction!"
Seeking ways to improve their competitiveness in the challenging marine engineering industry, Advanced Marine identified their old financial system as well as their Excel-based PO tracking process as the key inefficiencies holding them back.
Thus, they needed a solution that could replace their old system and Excel-based PO tracking, and seamlessly integrate their functions to improve their financial and inventory efficiencies.
With the deployment of SAP Business One, Advanced Marine achieved more than 99% accuracy in their inventory management, and eliminated all inefficiencies in their processes.
"SAP Business One has helped us tremendously. Now with all the data in our system, we can tell how much spare inventory we have and which is in demand," said John Zwiers, the Commercial Manager of Advanced Marine.
Originally reliant on a legacy software that was not sufficient to eliminate the need for manual input and processing, Hikari Automation needed a new business management software that would be easily scalable with the growth of their business.
The automation devices and components supplier also needed a partner which understood their unique business needs, and could provide reliable technical support for any solution they chose to implement.
They found answers to both of their requirements with SAP Business One and AFON.
"We looked in-depth at a range of systems, and SAP Business One stood out as it was an affordable yet comprehensive business tool that covered most of out needs straight out of the box," said Cheong Tien Chin, the Sales Director of Hikari Automation.
"AFON took the time to truly understand and solve our business challenges - they deliver very responsive service."
After the implementation, Hikari successfully automated their processes, and saw a 100% increase in their transactions and revenue.
Mecpec Co. Pte Ltd had previously implemented SAP Business One with another partner, but the implementation project was not carried out in a satisfactory manner.
As a result, its other systems were not fully integrated with the ERP software, which meant their invoicing and inventory management were not sufficiently automated as should have been the case.
The distributor needed a partner with the expertise to customise Business One according to their business needs, and found that partner in AFON.
With our assistance in integrating Business One with their systems, Mecpec completed their monthly financial closing 75% faster than before, and achieved significant time savings across the board.
"Closing the monthly accounts previously took 2 weeks," said Dawn Oh, the Director of Administration and Finance in Mecpec Co. Pte Ltd. "But with SAP Business One, it's all finalised in a few days."
SAP Business One has been the first and last word in ERP software for SMEs for almost two decades, with countless small businesses having obtained a competitive advantage with the solution over the years.
And SAP is continuing to invest in upgrading and updating Business One to best fit evolving business needs, with a 20-year road map of continuous innovation for the ERP software in place.
With this comprehensive guide to SAP Business One, we hope that you’ve learned everything you need to know about SAP’s flagship ERP software for SMEs to better inform your eventual decision as to which ERP software to implement for your business.
Now that you have a better understanding of its feature sets, unique strengths and licensing, we’re sure you’ll have a better idea as to whether SAP Business One is the right ERP software for your SME.
If you’d like to know more about what SAP Business One has in store for your business now, and in the near future, get your free copy of SAP Business One: The Next 20 Years by clicking on the image below.