Professional services firm SBI and Co. Inc. announced Monday its plan to acquire WebFlow Inc., a business process optimization software and services company.
As both companies are privately held, the terms of the deal were not disclosed.
WebFlow, of Scottsdale, Ariz., will operate as a wholly owned subsidiary of SBI. The acquisition will enable SBI to expand its SAP practice from straight services to software development and services.
WebFlow markets to European software giant SAP AGs customer base. SAP represents about 35 percent of the ERP (enterprise resource planning) market.
SBI is on the lookout for additional software acquisitions that, like WebFlow, offer inroads to significant e-business platforms such as the likes of i2 Technologies and Oracle Corp., according to officials.
SBI currently focuses services in three areas: supply chain planning, enterprise applications and customer collaboration.
Because SBI takes a vertical approach to the marketplace, WebFlows ERP-focused applications fit into SBIs core strategy.
WebFlows applications focus on specific pain points encountered by companies implementing SAPs R3 ERP system. The companys six applications focus on specific areas including accounts payable, accounts receivable, materials, and sales and distribution. A fifth application addressing human resources is under development, according to officials.
WebFlows applications are built natively on SAPs Business Workflow technology (packaged with R3) and provide flexibility to business processes.
"Typically a company goes through a two-year implementation cycle with R3. And in that time business processes may have changed," said Ty Mattingly, senior vice president of corporate development at SBI. "How do you take that and implement it back into the SAP system? WebFlow gives you that flexible nature to implement back into SAP."
Gary Knopp, president of WebFlow, said that while his company had many purchase offers--WebFlow boasts some of SAPs largest customers including Nestle S.A., Eastman Chemical Co. and WorldCom Inc.--he went with SBI because WebFlow will remain an independent software company.
The next area of development for WebFlow is CRM (customer relationship management), where SAP customers have expressed a need for business process optimization solutions, according to Knopp.
Ned Stringham, president and CEO of SBI, said WebFlow presents a unique opportunity for SBI because customers are looking to optimize and get a return from their ERP investments.
To back that up, Stringham cited a recent Morgan Stanley CIO survey that that said about 34 percent of IT budgets in 2002 will be spent on ERP. The money will not be allocated to new systems; rather it will be used to gain more value from existing ERP systems. Budgets in 2002 will also be used to extend ERP systems as a platform to create employee, customer and supplier portals, according to the study.
SBI, of Salt Lake City, expects to complete its acquisition of WebFlow this month.