Can We Talk?
A growing company is supposed to be one happy family, but your computers don't always get the message. Incompatible apps. Proprietary data formats. Feuding hardware. There's so much dysfunction that you might think you're in an old Ingmar Bergman movie.
But there's hope on the horizon: Software developers from NetSuite to Microsoft are rushing to the rescue with impressive "enterprise level" solutions that promise to give business owners what they have long craved: Complete integration of financial and operating data. No more relying on two-month-old sales reports with missing numbers. No more re-keyboarding payroll data into a spreadsheet. No more wondering from day to day whether the company is hitting on all cylinders or running out of gas.
Various terms describe these programs, including enterprise resource planning (ERP), enterprise application solutions, business automation, business management systems and business process integration. But they have one thing in common: A penchant for sucking in information like a Hoover upright. Last week's production. Yesterday's sales. Today's payables. If the data exists in a company, they'll find it, slice it, dice it and channel it into accounting software or anywhere else it's needed -- all in near-real time. They can even automate routine activities like ordering, shipping, and billing.
These applications are modeled in part on the million-dollar-and-up ERP systems that large corporations began installing in the mid 1990s. Most commonly identified with vendors like SAP, PeopleSoft, and JD Edwards (since purchased by PeopleSoft), the technology got credit for helping giants like Sears and General Motors shake off years of bureaucratic lethargy and get back in fighting trim.
Unlike big-ticket ERPs, which may require extensive re-programming to work smoothly with existing software, "mini-ERPs" functionally replace other applications. A local reseller may complete an installation in a day or week, instead of months or years. That helps make these solutions affordable and practical for the average business.
Should your company invest in an integrated solution? How should you proceed? What should you consider? The answers aren't simple, and are getting even less so as companies like PeopleSoft and SAP crowd into the small-business enterprise application market. IBM alone markets dozens of solutions, many of them incorporating products from other vendors, which purport to address the integration needs of growing companies.
A little time spent scoping out the alternatives and mentally working through some scenarios will give you a clearer perspective and help you make the right decisions. Here are some things to think about:
Your budget: Price may not be everything, but you have to be realistic. Small company ERPs run from $1,500 to $15,000 or more per seat. At the lower end of that range, Serenade Solutions sells an "all-in-one business management system for small and mid-size companies" that includes inventory management, order management, purchasing, customer/vendor management, and system administration. For about $2,500, iCode's Everest delivers a more robust solution with more than a dozen application-type functions, including a full-fledged accounting system.
Your accounting requirements: General ledger, accounts payable, and accounts receivable are at the nerve center of your business and thus central to your integration strategy. In fact, most ERPs are built around robust accounting systems, and the two are inseparable. A few solutions are designed to use popular applications like ACCPAC's Simply Accounting or Intuit's QuickBooks as a financial front-end, but these tend to be specialized manufacturing applications. Mid-tier accounting programs are starting to add ERP-like features: Best Software's Mas 90 and Mas 200 boasts business intelligence, customer relationship management, and manufacturing functions. But true enterprise integration is most easily achieved when applications and functions are designed from the get-go to work as a single unit.
Microsoft Business Solutions' Axapta, Great Plains, Navision and Solomon products meld core financial functions with customer relationship management, e-commerce, business analytics, human resources, manufacturing, project management, retail management and supply chain management. These products are mostly intended for companies with 25 or more employees. However another product in that family, Microsoft Business Solutions for Financial Management-Small Business Manager provides the same level of integration to smaller businesses.
Your work patterns: If you and key members of your management team travel frequently, Internet-based integration might be just the ticket. Many accounting-based ERP applications are designed to be run on a Web server, either in-house or at a third-party application service provider. But NetSuite, founded by Oracle's Larry Ellison, goes further by renting a turnkey Web solution to business for $4,800 a year. The system, which links remotely to your company's network, includes customer relationship management, order management and fulfillment, inventory management, finance, and e-commerce components. With a browser and a fast Internet connection, you use a "real-time dashboard" to exercise control and monitor business metrics.
Your unique needs: Many systems can do much of what you need, but you're not looking for a partial fix. IBM, Microsoft, and other vendors meet the requirements of vertical markets by making customizable solutions. Manufacturers, in particular, have specialized needs -- master production scheduling, job and parts tracking, and purchase order management to name a few -- that are not addressed by systems with a more general orientation. Ascent and Winman are among a dozen or more companies that have developed end-to-end solutions specifically for small to mid-size manufacturers.
Growing companies must be fast and agile to survive, let alone survive. That requires getting the information you need when you need it, which is in most cases right now. Technology that will integrate your company's myriad business functions is now available and affordable. It's only a matter of identifying the right solution.