Inside One of SAP's Smallest ERP Success Stories

This small company in the US doesn't look like a typical SAP buyer. But its decision to purchase SAP, and its experience so far, illustrates the promise and peril for SAP and rivals Oracle and Microsoft as they go after the small business ERP market in a big way.

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Artisan Hardwood Floors' purchase of SAP's BusinessOne ERP software in late 2007 wasn't anything that triggered a gushing press release from SAP's PR staff. It most likely didn't hit the radar screens of SAP CEO Henning Kagermann or CEO-in-waiting Leo Apotheker over in Walldorf, Germany.

But it's a telling story, nevertheless, that starts with a "de facto" CIO and no IT staff, disparate systems, and almost no customer knowledge of SAP's ERP expertise.

If you've worked in a small business, that scenario doesn't seem so surprising.

But if you work for SAP, that scenario is a radical change from the past.

Located in Texas, Artisan Hardwood Floors is a family owned and operated company with 37 employees and virtually no in-house IT staff. Like most small businesses, it found itself in 2007 running a couple of disconnected software packages for operations and accounting, and relying heavily on manual processes, says Pat Bailey, a general manager and co-owner of the business, as well as a self-described "guy who does everything."

"We didn't have any network [connection] between operations and accounting," Bailey recalls.

So he began looking for a new package that could unite back-office functions of Artisan's three separate business lines: a flooring installation business; a lumber yard that imports wood from South America and sells both at retail and wholesale; and a distribution arm to a network of US dealers.

Even with the modicum of complexity between the separate operations, Bailey (the de facto CIO for big tech decisions) was going to need only a dozen or so seats for a new software package, which has not been an area that SAP (or Oracle, for that matter) has had much interest in selling to in the past. After all, SAP made its bones implementing large, complex and expensive software rollouts almost exclusively to the Fortune 1000 set: the Coca-Colas and Wal-Marts of the world were its signature deals.

So the chances of Artisan Hardwood Floors using SAP software were seemingly as likely as Larry Ellison inviting Hasso Plattner over for a brats and beer BBQ. But today, Artisan Hardwood Floors is running SAP BusinessOne 100 percent. "I was sold the first day they did the demo," Bailey says.

If that's any indication of future SMB success for SAP, then the small potatoes deal should have at least brought a grin to Kagermann's and Apotheker's faces. For it was perfect execution on SAP's newfound strategy to infiltrate the small business space with easy-to-use ERP applications.