Thursday, November 26, 2009

"ERP for SMB"? Or "Accounting on Steroids"

Since the recent rise in popularity of SaaS and the entrance of tier one vendors into the SMB market, the ERP acronym has extended its definition to include accounting and financial software vendors that have serviced this market segment since the eighties. Leading vendors such as Sage, Intuit, and Microsoft have taken advantage of ERP's expanded definition. These vendors have branded their accounting solutions as ERP for SMBs by delivering an integrated offering through a SaaS business model. Microsoft has its Service Provider License Agreement (SPLA) partner program to deliver its SaaS offering, whereas Sage and Intuit have online subscription models for a number of their products. The SaaS business model has enabled vendors to deliver affordable, integrated ERP solutions to SMBs simply by providing add-on components to their accounting packages. Hence, SMB service organizations are presented with a variety of options offered from basic accounting solutions that can quickly deliver ERP solutions by leveraging the Internet as the platform of choice. QuickBooks' Online Edition exemplifies this point by allowing the smallest of service organizations to subscribe to its service. Quickbooks provides SMBs the option to include online add-ons that can integrate salesforce.com for CRM and Projector PSA for their project time and billing requirements, thereby delivering a seamless ERP offering. Although by no means will QuickBooks identify itself as an ERP solution, nevertheless, QuickBooks' SaaS model empowers small organizations to build a solution that can meet most of their business needs.

The ubiquity of the Internet has opened the ERP door to many vendors that have not had access to this market before. By leveraging the Internet, the SaaS model has allowed software vendors that specialize in back-office systems to embrace the ERP acronym. The definition of ERP has broadened to include all integrated systems that automate and streamline an organizations operations. Formerly, ERP systems focused specifically on delivering enterprise-wide solutions to large manufacturing organizations; today, users are faced with the challenge of sifting through the ever growing pool of solutions branded ERP. As a result, this has left user organizations with a wide range of systems that pitch ERP solutions, but these systems may or may not provide fully integrated functionality to support users' business requirements. In the SMB world, systems range from full-blown ERP systems (like NetSuite) to basic accounting systems (like Quickbooks). Although labels can be misleading, at the end of the day, users need to be diligent in determining their business requirements to find the solution that fits best.

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