Most of e27’s coverage has been on consumer-facing products. While a lot of exciting innovation is being covered on this, there are big opportunities in the business-to-business (B2B) sector. Talking to Simon Dale, Head of Technology and Innovation at SAP for Asia Pacific and Japan, he shared more about the opportunities that he sees for startups in the B2B space.
SAP has a large customer base, representing 86 percent of the Global Fortune 500 companies. About 74 percent of the world’s transaction revenues touches a SAP system ,and SAP touches around US$16 trillion of consumer purchases around the world. Other interesting facts about SAP’s customers include the following:
- SAP’s customers produce more than 82 percent of the coffee and tea we drink each day;
- SAP’s customers produce more than 79 percent of the world’s chocolate;
- And also 77 percent of the world’s beer (now that’s a startup related beverage);
- SAP Mobile Platform delivers 1.8 billion text messages worldwide every day; and
- 80 percent of SAP customers are small to mid-size businesses using SAP software to solve business challenges.
And where does SAP see solution demands from these users? Analytics, database and mobile.
According to Simon, “From an operational perspective, many of SAP’s customers optimise and manage their companies with the core SAP ERP solutions, which has allowed them to successfully scale their companies for many years. On top of this, the majority of them have deployed operational analytics systems to further understand and optimise. Increasingly, they are delving into more complex analytics, especially exploring the predictive space, and of course are exploring how mobility can be best incorporated into their business model for both internal operational deployment as well as to support their customer facing activities – on top of other digital channels such as web and messaging. The existing solutions are sufficient for the ‘standard’ needs, but increasingly many of them are looking for increased innovative solutions which help them edge away from their competition, and keep their business growing.”
Seems like an attractive space to be in? How hard is it to get into the business and what are some startups doing well in that space? Simon mentioned that, “Given most enterprises procure mature solutions in general, to meet known and quantified needs, there is a large opportunity for startup companies to identify new ‘edge’ and innovative technology solutions that identify areas of unmet need in these same enterprises. As the startup ideas mature, they will grab the attention of forward-thinking enterprises and demand will come to those with the best ideas that bring real business value.” Some of the startups doing well includes SAP HANA Startup Challenge winners Warwick Analytics (Most Innovative), Nexvisionix (Most Transformative) and SemanticVisions (Most Social Impact).
But what about challenges and failures? To make sure that startups are prepared to enter the space, Simon shared his observations on how best to avoid mistakes in the business-to-business space. “Failures in the B2B space usually rest on a variety of factors, most commonly either due to a bad business plan and/or poor execution. In one case in Singapore, a startup burned through over US$1 million on development and travel costs without even delivering a MVP, a classic case of thinking too hard about a problem and ignoring the lessons of such methods like lean, and failing fast and forward. A common factor in failure is a lack of attention on the end customer, ignoring the value of testing out response and adapting as a result, incrementally. Finally, copycat/herd mentality can create too many of the same products or services that, unless well backed and executed, result in a fragmented market where no one becomes a leader and has a sustainable business,” said Simon.
The SAP Startup Focus Program is helping startups that are interested in the business-to-business opportunity get it right by helping these startups build the right products and also get connected with customers through their networks. Commenting on the opportunities for Asian startups in the business-to-business space, Simon said, “As Asian economies and populations mature, there is a multitude of new business growth at all levels, and with the reduced costs of technology this presents a fantastic opportunity to offer products and services to both established and new, fast growth businesses of all sizes across all sectors. Helping all of these businesses make smarter use of technology across all dimensions of their operations makes it a wide field of opportunity in the B2B space. In particular in Asia, the majority of focus on consumer solutions has left the market for B2B solutions still wide open. Startups that develop offerings that can help ‘real world’ businesses leverage better use of technology would find a ready and willing market, especially in non-English language markets where a US service has not localised.”
Image Credits: B2B / Shutterstock