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Selecting a Small Business ERP Solution: Small Business Software Should Not Be “Small” In Functionality

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When small businesses decide to migrate from their existing software to a more sophisticated ERP solution, they are doing so for two primary reasons: 1) the business has outgrown the software it is currently using, and as a result, what were formerly simple tasks to complete take an excessive amount of time and have resulted in the development of impractical, inefficient internal business processes; and 2) the small business’ leadership team has recognized the need to purchase a new software system that will allow the business to grow in gross revenue, net profit, and customer base without a proportional increase in staff. When a small business elects to purchase a new ERP system, it should not settle for anything less than what other larger organizations would find acceptable.

When selecting a small business ERP solution, full integration is key. There is no point in moving forward with an ERP vendor who does not offer a complete solution that includes accounting, inventory management, purchasing, order entry, customer service, e-commerce, business intelligence, and warehouse management. Again, one of the primary reasons why a small business begins to engage in a software selection project in the first place is to eliminate the need for multiple software solutions from a variety of software developers.

From a purely functional standpoint, a small business should be careful not to buy into many ERP vendors’ claims that the business does not need function X, Y, or Z. When developing a list of functional requirements, the small business’ selection team must take into consideration both existing and future software requirements. For example, the selection team should ask vendors to provide a sales quote/proposal that includes a fully-integrated warehouse management system with RF and barcode technology. Similarly, the team should look for an ERP accounting solution that is SOX-compliant and provides full audit trails. While these are just a few examples, there are hundreds of functional and technical requirements that the small business selection team should demand from software vendors. For more information on developing a list of ERP requirements, click here.

In addition to scope of software functionality, the selection team should also look for a software solution that is platform independent. By selecting an ERP solution that is platform independent, the small business does not need to worry about becoming “locked in” to or outgrowing a particular operating platform. The chosen software’s architecture should provide the small business with a variety of operating and database options to choose from for both today, tomorrow, and beyond.

Lastly, and perhaps most importantly, the small business should ask software vendors to describe the scalability of their proposed software solutions. The small business must do everything it can during the selection process to ensure that whatever software it selects, the software will provide the business with an opportunity for growth. The small business’ selection team should require software vendors to disclose the lowest user count for a given business using the proposed software solution and the highest user count for a given business using the proposed software solution. The difference between these two user counts should provide a fairly good indicator of the software’s scalability. The selection team should then request a formal proposal from the software vendor that includes all previously demonstrated functionality and all functionality that was deployed in both the low and high user count business’ software solutions.

By following these simple guidelines, small businesses should be able to obtain the necessary information from software vendors to select a small business software solution that is anything but “small” in functionality and features.

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