ERP for Small Business: The Time is Ripe

By admin • January 8th, 2010

<p class=”dek”>Small and mid-size businesses often have unique requirements for enterprise resource planning software that demand full capabilities without complexity. They also want to see a quick return on investment. Vendors now are stepping up.</p> <p>The time is ripe for small and mid-size businesses to adopt enterprise resource planning (ERP) applications, according to leading industry analysts.</p> <p>There are more options than ever among the crowded ERP-vendor field targeting the small and mid-size business sector. Those options are, in turn, growing more affordable. In addition, many small and mid-size businesses are in desperate need of an upgrade to sophisticated software that was once the purview of only larger corporations.</p> <p>&quot;Many small businesses have not upgraded their infrastructure since the Y2K cycle,&quot; says Albert Pang, research director of enterprise applications research for Framingham-Mass.-based IDC. &quot;Many of their systems need to be replaced.&quot; Companies looking to update their financial, human resources, project management, and procurement applications will find that their needs will be met by ERP offerings, Pang says.</p> <p><b>A field crowded with vendors</b></p> <p>The good news is that there are many new choices among ERP programs available to small and mid-size businesses, Pang says, with over 30 vendors in the field. And those vendors are looking to small and mid-size businesses as their primary growth market. An August 2007 Forrester Research report forecast that the small business sector will be &quot;the most dynamic and innovative growth area&quot; for ERP sales over the next three to five years.</p> <p>If comparison shopping a 30-plus market of vendors seems overwhelming, consider that many vendors offer specialty products to certain sectors or verticals. For example, <a href=””>Activant Solutions</a> specializes in offerings to distributors, <a href=””>Constellation Software Inc.</a> services club-membership-type businesses, and <a href=””>Deltek Inc.&#039;s products</a> target professional services providers.</p> <p>But ERP&#039;s largest players — <a href=””>SAP</a>, <a href=””>Sage Software</a>, <a href=””>Oracle</a>, and <a href=””>Microsoft</a> — have more generic offerings that are increasingly tailored to smaller businesses. For example, Oracle is offering fixed-scope products, such as E-Business Suite and JDEdwards Enterprise One. These can be up and running in days to weeks, not months to years like previous, enterprise-focused ERP applications, says Pang. That timetable is crucial for small businesses, which want and need to see a quick return on their technology investments.</p> <p>And while costs can vary widely according to a company&#039;s specific needs, the costs for more sophisticated software have really come down. &quot;In the past, many of these products would cost seven figures, but now, they are available for under &#036;100,000,&quot; says Pang. Stiff competition and the emergency of on-demand products available over the Web have contributed to this trend, he says.</p> <p><b>Custom, on-demand solutions</b></p> <p>Another option for smaller firms is to purchase generic solutions and customize them with help from a value-added reseller or consultant, explains Gary Chen, senior analyst and small and mid-size business specialist at Boston, Mass-based Yankee Group. A wide range of add-on modules is available to develop the perfect custom application for every company.</p> <p>Still another option is ERP on-demand products for smaller businesses, such as those offered by NetSuite and SAP Business ByDesign. SAP&#039;s product features a unique flat price: &#036;149 per user per month, according to its website.</p> <p>With all these options, it&#039;s a good time for smaller firms to go ERP shopping, says Chen. &quot;There is so much more available now,&quot; he says. &quot;There&#039;s never been a better time.&quot;</p>


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