ERP Selection: Why Working with Smaller Vendors Yields Big ROI

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 your business on which software you use. Gathering functional requirements is the usual place to start. 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 smaller 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 five (5) important factors to consider in your ERP selection.

Why you should consider working with Smaller Vendors

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; the people who helped implement your software and get you on-boarded are 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 their team embraces the concerns of and contributions made by customers, after the sale.

2. 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.

3. 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 can identify issues quickly and have the freedom to address them, including development of new industry-specific functionality.

4. 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.

5. Flexibility matters.

Small vendors are flexible in ways that can really impact how you run your business. Small vendors equal flexibility, options that saves their customers time and money. The benefits really start to add up.