Small and medium businesses in Colombia face a dilemma. To operate efficiently, they need a centralized ERP system, but most ERP vendors’ solutions are too expensive and complex to implement.
Siesa has developed a new generation of ERP solutions that run in the IBM Cloud, enabling clients to avoid infrastructure and implementation costs and reduce risk via a monthly pay-as-you-go model.
20:1cost reduction by moving clients from on-premises solutions into the cloud
80%reduction in development resources needed to support 15,000 daily users
40helpdesk calls per client per month avoided by eliminating on-premises infrastructure
Business challenge story
Helping small businesses compete
Siesa attributes its success in becoming Colombia’s largest software company to its deep understanding of the local market. Unlike many countries, where a few large enterprises dominate most business sectors, Colombia’s retail, hospitality and manufacturing markets are highly competitive, with many small and medium-sized businesses competing fiercely for market share.
Cristian Argotti, National Director of IT Solutions at Siesa, comments: “Our competitors are the big international ERP vendors. Their solutions are often designed for very large companies, so they can be expensive for smaller businesses to implement. In a country like Colombia, it’s critical to get the price right, so we compete very aggressively on price and focus on ensuring that our solutions are affordable for businesses of any size.”
Mitigation of risk is also another key factor for smaller businesses in choosing an ERP solution. If a restaurant chain wants to experiment by opening a location in a new city, for example, it is important to keep the investment to a minimum, in case the new location isn’t successful. If opening that new location also involves a large up-front investment in IT infrastructure and ERP software licenses, then the risk may be too high—impacting future business growth potential.
Cristian Argotti comments: “Until recently, the cost and risk of on-premises infrastructure was the biggest roadblock to our growth. Buying, hosting and maintaining servers to run our software was prohibitive for most smaller companies in Colombia. To capitalize on that market opportunity, we had to come up with a better way for clients to use our solutions.”
Becoming a cloud-ready business
Siesa quickly realized that building a cloud-hosted version of its solution would resolve the cost and risk issues, and help new clients adopt its solutions. However, its legacy platforms were not in a cloud-ready state.
Cristian Argotti comments: “We needed a partner that could help us make the transition to cloud. In our experience, most cloud vendors don’t understand the importance of having a face-to-face relationship with their clients, but IBM is the exception. They provided a highly trained engineering team to help us gain the cloud expertise we needed to move our applications into the IBM Cloud. They quickly developed such a good understanding of our business that they helped us see problems and opportunities that we had never noticed before.”
Siesa decided to use a combination of IBM Cloud solutions to support the new software-as-a-service version of its ERP applications. As its main cloud platform, the company selected VMware vSphere on IBM Cloud, and now has 10 IBM Cloud bare metal servers running the VMware ESXi hypervisor.
“The flexibility and scalability of running VMware in IBM Cloud are essential for Siesa,” says Cristian Argotti. “The platform helps us guarantee the quality and performance of our software and satisfy the expectations of our customers.”
One of the main benefits of the IBM Cloud platform is its ease of administration, which helps the company get new products and services into production quickly, and scale up to meet the demands of new clients.
Scalability is also important from a storage perspective. Siesa uses IBM Cloud Block Storage—a flash-backed iSCSI storage system—to store its VMs and snapshots, and provide the high levels of I/O performance necessary to keep its applications online and responsive. The company currently uses around 80 terabytes of storage, and can easily add new capacity as its data volumes increase.
“Our clients see none of the moving parts—they don’t need to worry about whether their workloads are growing or shrinking, and they pay the same simple monthly price per user, regardless of the resources they use,” says Cristian Argotti. “There’s no up-front investment and almost no risk: if they open a new store or restaurant, they can simply plug some extra users into our cloud. And if things don’t work out, they can unplug and move somewhere else.”
Finally, the IBM Cloud infrastructure makes it faster and easier for Siesa to develop new products and services. For example, in Colombia, the government has recently mandated an electronic invoicing system. Siesa has seized the opportunity to become one of the biggest electronic invoice signing providers in the country by developing a new e-invoicing application in the IBM Cloud.
“The last time we developed a major new application, it took more than a year,” says Cristian Argotti. “This time, it was a matter of a few months. Our time-to-market has decreased substantially thanks to the IBM Cloud.”
Getting the price right for Colombian businesses
Today, Siesa and IBM work closely together to serve cloud-based ERP solutions to nearly 350 companies across Colombia. Almost 15,000 users connect to Siesa solutions in the IBM Cloud every day.
“Even multinational companies are adopting our solution when they work with Colombian businesses,” says Cristian Argotti. “For instance, we have 110 companies who are clients of PricewaterhouseCoopers, and they are all using Siesa ERP software via the IBM Cloud.”
Siesa attributes the success of the solution to the stable, affordable, low-risk pricing model that the IBM Cloud infrastructure allows.
“No other vendor in this country is currently offering ERP for a monthly fee per user,” says Cristian Argotti. “It’s a real innovation in the Colombian market. And the cost-efficiency is astonishing: we’re seeing a 20-to-1 saving just by plugging our existing clients into the IBM Cloud.”
A large part of these savings comes from a reduction in support calls to Siesa’s helpdesk. Since clients no longer need to worry about managing their own infrastructure, Siesa has eliminated an entire class of support issues relating to hardware, network, security and operating system problems.
“As soon as you plug into the cloud, many support issues just disappear,” says Cristian Argotti. “We see almost 40 fewer support tickets per month from cloud clients, compared to on-premises clients.”
The company also sees the potential to integrate IBM Watson® services into its cloud offerings, to harness the power of artificial intelligence to further streamline operations and reduce costs. For example, the Siesa team is working with IBM to build a new helpdesk solution that will help its customer service team search technical documentation and identify answers to clients’ problems more quickly.
Cristian Argotti concludes: “IBM Cloud is an enterprise cloud. It’s strong in the core, it’s strong in performance and in security—and with IBM Watson, it’s smart too. In the past, to manage 15,000 users, we would have needed 30 to 50 developers and system administrators. Today, with the IBM Cloud, that team is just five people. That kind of efficiency puts us far ahead of the competition and helps us deliver solutions that make financial sense for Colombian businesses.”
Siesa is the leading provider of ERP solutions in Colombia, and is part of a holding company that has more than 300,000 clients across Latin America. Its business model is based on the quality of its products, its high standards of service, and its flexibility in meeting client requirements.