With rapidly expanding access to ERP software, small businesses are better poised to survive and thrive during difficult market climates. ERP software small business are in the  middle of a series of ongoing innovation and evolutionary advancements that making them increasingly cost effective for smaller enterprises while they simultaneously expand in capabilities and become more and more reliable. With the right solutions and applications of ERP software, small business enterprises and startups may gain the competitive edge they need to stay afloat and even leap forward while waiting for business conditions to improve. These recent changes in the ERP software small business landscape have come about through a connected series of events that have taken place since the first arrival of ERP systems on the market about two decades ago.

ERP Software

ERP Software Small Business

In the late 1980s and early 1990s, the first early enterprise resource planning business solutions appeared and were installed in the manufacturing sector. These new systems were developed in response to demand from manufacturing operations managers who were struggling to coordinate complex scheduling and other activities on factory shop floors. These tasks, like ordering, assembly, receiving and distribution, often required the input of multiple departments. But prior to system integration, companies typically ran each of their separate departments on separate software platforms. This meant that departments and business teams could not run the same applications and they also couldn’t share access to relevant databases without complex data conversion software. This caused significant productivity slowdowns and frustrations. But once the first ERP integrated systems were installed, all employees in the company could share access to the same databases and other documents that could be updated in real time. Employees could also run standardized applications from a central single or multi tier server architecture, which meant better coordination and easier employee training.  

These systems were very expensive, and the implementation process could be cumbersome and risky, but nevertheless, ERP systems brought high returns to the large fortune five hundred level firms that could afford them. Implementations became very popular throughout the manufacturing sector and among other business models as well, including university systems and government offices. Just prior to the arrival of the new millennium, demand for integrated ERP systems reached a fever pitch as large businesses rushed to replace their isolated legacy systems before the year 2000.

Soon after the transition, however, market saturation took effect and demand at the high budget level began to cool. At that point, established developers and providers like Microsoft, SAP and Oracle began to turn their attention downstream and explore new market share opportunities among smaller business enterprises. To compete for business at this level, large firms have had to scale and customize their product offerings in order to appeal to the smaller clients they were once able to ignore. They also needed to compete with a rising landscape of alternatives to traditional ERP infrastructures. Freeware, open source software solutions, hosting solutions and software service providers, for example, allowed small businesses to run applications while sidestepping the cost of server ownership and maintenance.