by Richard Barrett, Analytics Solution Marketing, SAP

It’s a smart move for SAP to start with small and medium enterprises (SMEs) as they embark down the path to encourage finance to move solutions into the cloud. To my way of thinking, it’s not that the business opportunity here is any bigger than with large enterprises, it’s that smaller companies have fewer hang-ups about issues such as 24/7 service provision and security. Items that many large enterprises still get unreasonably concerned about. Furthermore, the people involved in SMEs are less likely to have personal flesh tied up in legacy solutions, unlike a large enterprise.

So how is SAP approaching this? This week at the SAPPHIRE NOW event in Madrid, SAP launched the SAP Financials OnDemand solution, which clearly targets larger midmarket companies or subsidiaries of large enterprises. This offering is based on the tried and tested financials module of SAP’s midmarket solution, SAP Business ByDesign. But what’s exciting is that it’s supported by SAP HANA, the in-memory calculation engine that’s gaining momentum at a terrific pace.

On Tuesday’s keynote stage, SAP’s co-CEO, Jim Hagemann Snabe, announced that SAP has tied the SAP HANA engine to its CRM software and other applications, creating a package, dubbed SAP 360 Customer, that will “allow organizations to revolutionize the way they engage with their customers”.

Human resources, sales, and marketing teams have been the very first to embrace cloud-based solutions. SAP’s recent announcements look to be part of a well thought out strategy; one that  gets all the other lines of business aboard the SAP HANA platform early on. This paves the way for finance to be gently eased up into the cloud at a later date, when the benefits have been clearly demonstrated and remaining reservations have evaporated.

For the moment, small and medium enterprises around the globe can enjoy the benefits of SAP Financials OnDemand  – and these go far beyond simply not having to maintain software on the premises or retain experts on site. Besides delivering the core functionality that finance needs within its own domain, this solution is able to share data with other on-demand solutions  that exist within the enterprise.  These might be human resources solutions from SuccessFactors, an SAP company ; SAP Sales OnDemand; or even the external trading functionality that the Ariba platform provides.

So quite quickly, the open architecture that underpins these on-demand solutions means that companies can benefit from having a loosely coupled suite covering most of their core functions. Now isn’t that something many large enterprise companies still struggle with today?