Drivers of Change...

Back to the basics...

The basic fundamentals which drive all businesses are also driving this change - the search for sustainable growth. The large ERP vendors that have traditionally served the large corporations are seeing a slow down in their revenue streams. It doesnt take much analysis to say that this market segment cannot ensure sustainable growth over the next decade. New markets must be found.

Arguably, two factors are enabling the ERP vendors to offer their products to the SMB sector and thereby helping them define the new markets:

• Service Oriented Architecture (lovingly called SOA), and
• an increasing acceptance of on-demand delivery models.

The together can potentially prove to be the holy grail for the customers and the ERP vendors alike.

The race for market share [of small and medium sized businesses] is on.

For now, the target is midmarket but is small business far behind?

-amit

Watershed decade of the 21st century...

... So many questions and so few (and disparate) answers.

The theme for small business software landscape has been - DIVERSITY. Desktop applications , homegrown software applications, excel and such dot the small business landscape. What this means is that the small business software landscape is NOT as organized or well defined as that for large corporations. For large corporations the theme has (typically) been ERP.

Rarely do small businesses have a "strategy" or even a well thought out plan for their software needs. This is understandable becasue they are busy running their day to day operations and making sure that things run smoothly. They do not have the manpower & other resources to dedicate to such analysis & planning. Forget the classic implementation for the moment. In contrast large organizations have scores of people examining every aspect of its software needs including the CIO and (implicitly) the CFO.

What are the small business people missing that large corporation are gaining upon? What can a small business do? Is this a case of missed opportunities for a small business? You bet it is...and we will show how things are changing to the advantage of a small business...and also what the software vendors must do to help the small business in this first decade of the 21st century...

-amit

Business Fundementals...

Cash generation, growth, margin, velocity, and customers are all key parameters that determine the performance of a business. Dr. Ram Charan discusses these extensively in his book “What does the CEO want you to know” (http://www.ramcharan.com/).

All of the metrics described above are measurable and they provide a ton of information about the health of a company. The question is: Is your small businesses able to measure these accurately and derive inferences that can lead to short term and strategic benefits?

Keeping a close tab on what dollars are coming in and going out is one of key tenets of maintaining a good cash flow. Synchronizing accounts payable and receivable, identifying late paying customer and promoting and retaining profitable customers are some ways in which cash generation can be improved to healthy levels. What is the inventory position, how quickly the inventory is turning-over, are the margins too high or too low. What are the fast moving products. How are we doing with respect to customer retention? Are we acquiring new customers and increasing our market share? Or are we stagnating?

A small business must be able to answer these basic questions for itself. And this is just the tip of the iceberg...

-amit