Why Working with Smaller Vendors Yields Big ROI

Tuesday, March 6, 2018

Selection criteria for your business management software is an important “hot topic” — review sites and resources abound. Selecting your next — or your first — Enterprise Resource Planning (ERP) is literally betting the success of their business on which software you use. Gathering functional requirements is the usual place to start. But be sure to add Vendor selection benchmarks to your list. Why?

ERP is a mature, multibillion-dollar industry, overrun by large, legacy — and proprietary — vendors who've retired more products than you can conceivably imagine. While the products have been around since the 70s, the TLA (three-letter acronym) wasn’t coined until the 90s. I’ve worked with those larger companies over the years, and that experience has me now firmly entrenched toward smaller software vendors.

While large vendors come with name recognition (thanks to all those marketing — not product development — dollars spent) and the security of knowing that you’re a part of something bigger, they also come with a large price tag. Smaller vendors offer more affordability with flexible payment and licensing models. And although every company is unique, because you’re a “little fish in a big pond,” there is no opportunity to be heard or to influence the application that runs your business.

What if you want your software vendor to be a real partner, someone who is invested in the success of you as a customer and helping your business grow?

Fortunately, the enterprise software space is no longer dominated by a handful of large players. Companies today have lots of options, and more are choosing to partner with software providers who are approachable, flexible, customizable and affordable. Companies can set their own course, and based on their priorities, invest in a solution to help them achieve their specific goals. The reasons for choosing a small ERP software vendor are numerous, here are 5 important factors to consider.

Working with Smaller Vendors: The Pros

  1. Relationships matter.

Small vendors take YOU personally. They want to get to know you and your business, and just as refreshing, you get to know them. Your calls and emails aren’t routed to someone, somewhere, who only knows as much about your company as someone else bothered to type up in some notes. Small vendors are accessible — your sales person doesn’t vanish; your software implementer is available; and should the need ever arise, you can talk to the CEO directly with fewer corporate layers to wade through. Smaller vendors tend to have deep, specialized industry-specific expertise — such as Metalforming manufacturing. And if you’re dealing with an open source software vendor, their team embraces the entire community of contributors, including paying customers.

  1. Product development matters.

While the product roadmap is laid out well into the future, small vendors consider a wide range of needs across their entire customer base to determine what goes into each release. You, as an active customer, help set the course. Because small vendors have more frequent releases, it’s far more likely that each release can — and will — benefit your company. Large vendors develop their roadmaps privately and consider only the needs of their most important, most deeply-pocketed customers.

  1. Nimble and responsive matters.

Speaking of product roadmaps, software development at large vendors is rigidly structured, and changes are nearly impossible. Think of it as trying to turn around a 5000-passenger cruise ship in your driveway. Small vendors can course-correct much more easily; solutions to problems are swift and creative. They’re not hemmed in by bureaucracy and red-tape. Small vendors identify issues quickly and have the freedom to address them, including development of new industry-specific functionality.

  1. Innovation matters.

Of course, every company wants to be nimble, every company wants to be responsive and agile, but it becomes extremely impractical when you are the size of SAP or Oracle. You must stay the course, regardless of what issues arise, unless the issue affects the top .001% of your customer base. Turning that ship is impossible — so you, as a customer, are left modifying your process to accommodate the limitations in the software. Small vendors innovate to stay relevant with a focus on in-house development of the core application while integrations are offered with third-party tools and add-ons.

  1. Flexibility matters.

Small vendors are flexible in ways that can really impact how you run your business. In the case of xTuple, open source plus small vendor equals flexibility that saves our customers time and money. xTuple customers can choose to run on-premise or in the cloud. They can choose their own operating system, Windows, Mac or Linux (or any combination thereof), and often they can run their ERP on existing hardware. This, combined with the momentum of a global community of users, and the benefits really start to add up.

“There’s a way to do it better — find it.”

— Thomas Edison (and xTuple!)

Attendees at ERP Boot Camp: Setup and Configuration in Canada — courtesy of xTuple customer Athena Automation Ltd.

For my next post — to be fair and balanced — I’ll tackle “Working with Smaller Vendors: The Cons.”

Stay tuned.

Danielle Kerner

Director Partner Channel Development

With xTuple since 2009, Danielle has managed the growth and development of xTuple's Partner channel expanding the overall reach into more than a dozen countries across six continents. Danielle is responsible for the cultivation of Partner relationships and the development of new markets around the world. Danielle provides sales and technical support to the growing global community of xTuple Partners. She works directly with the xTuple Marketing Department to secure best-in-class services for xTuple Partners. Prior to xTuple, Danielle held several leadership positions at Dominion Enterprises where she directed the development of their Web-based businesses. She holds a B.A. in Historic Studies from Virginia Wesleyan College and worked as an archeologist for the James River Institute for Archaeology.