Oct
16
small business wisdom - ERP software and the art of survival
October 16, 2009 |
Commercial organisations need efficient process, the focus of leadership and structure that can adapt to enable the company to grow safely as a massive 55% of businesses don’t make it to their fifth birthday. The commentators offer banal opinions as to why this occurs. I consistently see three key reasons why this tragedy occurs so often and to so many people with different backgrounds, qualifications and knowledge.
The primary reason is insufficient market understanding.
No foresight. For example People dream up the idea, create the product and then expect the market to come and purchase. In this connected age there is no excuse for lack of research before spending any time and cash on creating a product until you have robust evidence there is a market.
The number two reason is lack of comprehension of fundamental facts about business.
A significant proportion of people starting a business know their trade, how to offer a service or build a product, but not how to run a business. Having the ability to read and follow the numbers in the Income statement or the balance sheet is a vital. The basic knowledge of accounting is not very often imparted well by the business manuals, internet resources and experts in the know such as accountants and bookkeepers. The problem is made worse by greedy and short sighted vendors such as Sage software misleading the market by selling only a portion of the functionality actually needed by small companies.
Small business accounting software isnt a complete answer.
Large corporations years ago figured out that all of their systems should be joined together to give them a comprehensive picture of the business and then along came ERP software solutions and packages. One vendor NetSuite had the vision to see the opening in the market and began selling its small business ERP software. NetSuite pricing has since increased and put their technology out of the financial reach of small businesses.
The final reason companies don’t survive is because of a dirth of process and procedures that put in place the vital disciplines and consistency a business must have to work efficiently.
