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Small and midsize companies have more enterprise-grade application choices than ever that can be run productively and economically, according to experts who spoke Wednesday at the Ziff Davis Internet SMB Solutions Virtual Tradeshow.
This creates a problem for SMBs, however, because it means these businesses must sort through the confusing array of market choices, according to the experts, who spoke on a panel about how to “Improve Productivity with the Right Enterprise Application Strategy.”
“The number of options is truly overwhelming, especially when you consider that SMBs are very different from larger enterprise customers in that they dont have a large IT department with a chief information officer involved in strategy,” said Ann Westerheim, CEO of Ekaru LLC, an IT technology services company for SMBs based in Westford, Mass.
Virtually every category of enterprise applications, such as financial, human resources, supply chain management, financials, sales automaton, CRM (customer relationship management), time and billing, are within reach of SMBs, she said.
Major enterprise application vendors are reaching out to SMBs because they have recognized it is still a largely untapped market that represents about 50 percent of the U.S. economy, she said.
Established enterprise software companies are reconfiguring their products to make them more affordable and accessible to SMBs, Westerheim noted. Furthermore, an entire generation of application service provider is using the Internet to deliver enterprise applications as an online service at a per-user cost that is attractive to SMBs, she said.
Westerheim said her company has seen a lot of interest in Salesforce.coms on-demand CRM application and Intacct Corp.s on-demand ERP (enterprise resource planning) software. These two companies are of particular interest to SMBs, Westerheim said, because their products are integrated through the Web.
Microsoft Corp. CRM, accounting and financial applications are also of interest to SMBs because they are integrated with the rest of Microsoft desktop productivity applications, she said.
However, there are challenges for both SMB customers and the vendors trying to sell software to them. For SMBs, the problem is selecting the right product and vendor without having a lot of expertise in-house to do so.
There is also the question of whether the SMB should work directly with vendors or with a value-added reseller or a system integrator. Finally, there is the issue of employee training.
“You can go through a successful implementation,” Westerheim said. “But if people arent effectively using the applications, then its not going to get you to where you need to be.”
SMBs can benefit from using enterprise applications because they can serve as “force multipliers” that can make a companys work force more productive beyond their sheer numbers, said Sourabh Hajela, president of StartSmart, a management consulting firm.
If properly implemented, enterprise applications can help SMBs “enter new markets [with] a relatively low investment. It can help you lower cost of operations, improve employee productivity, lower time to market and improve quality,” he said.
Instead of acquiring an enterprise application, SMBs should consider whether it would make sense to build it internally, Hajela said. That might appear to be beyond the reach of most SMBs, he noted, but the option should not be rejected out of hand.
Hajela cited the case of an SMB that he worked with that decided to build its own enterprise-class applications because it was essential for the company to create competitive advantage and it could not find a similar application in the commercial software market.
The application has been so successful for the company that it is now thinking about selling it on the open market, Hajela said.
However, an SMB needs to carefully weigh the risks in terms of time to market, costs, available development capabilities and many other factors before deciding to build an application, Hajela said.
Editors Note: The Ziff Davis Internet SMB Solutions Virtual Tradeshow is run by eSeminars, a division of Ziff Davis Media, parent company of Ziff Davis Internet.