Coming soon ‘On Demand Service’ to small to mid sized business firms.

IBM Korea‘s GTS (Global Technical Service) announced SAP Business One based ERP On demand Service and Workplace On Demand Service on the 22nd.

ERP(Enterprise Resource Planning) On Demand Service is a business management system that integrates SAP solutions; Business One based geared to small to mid size business with IBM’s formation and management skills all into one. This service is different from existing services provided by communication businessman with fixed tool service.

It’s a service system that converted from actual ERP constructed model customized to fit each individual business operation environment. In other words, it provides usage to all aspects of modules SAP Business One supports and ability to construct a custom tailored solution to any business firm request, IBM explained.

IBM GTS dept. manager Jeung-Sun Yoon said, “This isn’t a service that just came out of blue! We were devising to come up with a service that can provide solution to a businesses that are small but have a high potentials by market research and analysis.” to explain how the ERP On Demand Service came about.

Workplace On Demand Service that also came out is a model that can provide groupware solutions like e-mail, electronic sales transactions, designing company website.

Destined for change but what about the choices?
Will the IBM’s ERP On Demand Service and Workplace On Demand Service bring much changes? It’s kind of out of date to debate with SaaS (Software as a Service) and realistically it’s just too early to tell how much influence it can make.

The benefit from best price offer claimed by IBM Korea just isn’t so. Based on three-year user expenses, initial setup fee around $270, can be reduced by 30% discount to around $200 only with On Demand Service sign ups.

Of course, after initial 3 years, the service fee will be reduced and converting from service client status to actual system setup client can enjoy benefit of licensing services as a part of royal customer service.

However, whether or not small to mid sized business that only produce sales figure of $10 million to $100 million can really consider to covert to ERP system is still questionable.

Consider the case of KT Bizmeka for example, they provide ERP solution service by Oracle to small businesses but the ERP system setup isn’t that simple. A monthly service fee of $1,800 to $3,000 is drawing zero memberships currently.

A KT Bizmeka’s affiliate said, “The initial business problems made the inadequate preparation too but small businesses probably will consider much longer time before committing to switch over to ERP system. We are considering for full-scale service promotions as soon as the vacation season is over.”

On this note IBM Korea’s department head Soyoung Jang said, “This is not a business model that can bring overnight miracles. Rather bringing up the IBM’s image in the rapidly growing SMB market and gaining more trust and developing relationship is much more important than short-term success. Therefore, we will focus more with long-term service in our mind.

Competing with Oracle is in close reach
The service offer from IBM Korea is first of its kind in domestic Korea that is custom tailored for the Korean needs. Precisely, even small to mid size businesses are prepared to come up with a special solution to cope with any situations it may face.

As a service model, it stands out by offering 8 week consulting and initial setup training courses to meet individual circumstances and business environments. The training will be provided free of charge.

The service was introduced from SAP 2006 Leadership Forum last month and it’s generated a lot of interests and consultations form the customers already said IBM. IBM said it plans to add more applications to the existing infrastructure for the SMB and working on further service expansions.

As the SMB market is being considered as next hot place, IT business firms are competing fiercely into this market. The service model offered to the SMB market will be the center of focus for all the competitors involved.

Oracle Korea’s affiliate said, “I can not describe the specific terms yet but service will be provided either solely by us or maybe even by partnership with others soon.”.”

With more players in the market will generate more competitions and that is always a good news for the consumers and service users. The users will soon enjoy benefit arising from side effects in the market. @