When shopping for software, businesses are faced with a myriad of options with respect to both capabilities and cost. Navigating these options can be a daunting task, and making the right decision can be difficult.

Unfortunately, many small businesses do not have their own IT staff to assist in the software decision-making process, and ownership and/or management are left to fend for themselves. Often, these individuals do not have the experience or skills that are required to make informed decisions regarding software purchases. Therefore, they must count on the impartiality and honesty of outside vendors to recommend the most appropriate software.

Enterprise Resource Planning, or ERP, software is basically a fancy name for business management software for large companies. Some examples include SAP, JD Edwards, Oracle and Microsoft Great Plains. ERP software has traditionally been targeted at big corporations and therefore includes a very extensive set of features and functionality.

As more and more large companies have adopted ERP software and this part of the market has begun to dry up, ERP software vendors have started to target smaller and smaller businesses.

But ERP software was not designed for small businesses and is usually a poor fit for their needs. ERP software vendors, in an effort to meet sales targets, are very often trying to fit a square peg in a round hole.

The bigger the software vendor, the greater the chance that you are dealing with salespeople as opposed to technical people. Therefore, the greater the odds you are being ‘sold’ as opposed to being given objective advice. How often do salespeople tell you not to buy what they are selling?

Many ERP software vendors have reduced their pricing in order to attract more small business customers. (They can do this because the software has already been developed and there is virtually no incremental cost associated with each additional customer.) However, ERP software is still quite a bit more expensive than more traditional small business software options. Software solutions that were initially created for small businesses are cheaper and far easier to implement.

ERP software vendors will try to sell their solutions based on the wide breadth of features, as well as their ability to integrate with other software packages they may have to offer. But most small businesses do not require the majority of the features in ERP software and they do not have the time, money or resources to implement or benefit from these other software packages. Furthermore, the additional unused features in larger software packages can often actually hinder the effectiveness of the features that are actually used.

When small companies are considering ERP software, they often forget to consider the high after-sale costs. The hourly support and programming rates charged by ERP vendors tend to be significantly higher than those of software vendors selling more traditional small business software. And the general rule is, the bigger the software, the greater the overall price tag for programming customizations. So, small companies who are sold on an ERP software package are often stung later on when the software needs to be modified to meet changing business needs.

The bottom line is that all businesses should carefully and objectively evaluate all options when deciding which software to purchase. Companies without internal IT resources should first approach an impartial 3rd party like its accounting firm or an IT consultant, instead of approaching software vendors directly. This will arm the business with the information required to make the most informed and objective software purchasing decisions.


Datapro Technology Solutions is an IT consulting firm that helps small and medium-sized businesses get the most from their investments in technology.

To find out more about the services we provide and how we might be able to help your business, visit our web site at dataproforbusiness.com or give us a call at 416-977-1991.