AutoCount or Cloud?
We wrote about the cloud before http://www.isme.com.sg/so-what-is-the-cloud-about/ and about ERP systems as well http://www.isme.com.sg/accounting-software-vs-erp-solution/. So let’s talk a bit about what we see in the market but before that we’ll pay some attention to the terminology
Public cloud – basically means both data and application are on the world wide web, hosted somewhere but you don’t need a server in your office. Moreover, the software can be accessed using the internet browser that you normally use (Chrome, Firefox, IE you name it). We all know these applications: Facebook is in the cloud and so is your gmail or yahoo email account.
ERP – Enterprise Resource Planning – the idea is that you monitor and manage all your operational processes through 1 system. That means you’re not only computerizing your accounting processes, but also your logistic, human resource and commercial processes. Everything that happens in your company is represented and managed in your ERP system.
Without going into too much detail, a key reason for cloud solutions is the ease of deployment; not that the software is necessarily more simple, you just assume that hardware, network and other infrastructure components are there to be used and that there’s no need for additional machines or cables to be implemented.
A key driver behind the implementation of an ERP system is of course to manage all your processes while realizing that these processes can be ‘off-the-shelf’.
Let’s elaborate on that last point a bit: many SMEs think that an ERP system can do magic and will do everything the boss has ever wanted. That’s a myth. An ERP system brings all your (non-core) processes under control in a standard way. How you handle your invoices will not set you apart from the competition, your inventory control is important but will not give you any unique selling point. On the contrary, your products and services will lead commercial success, your internal processes should just run smoothly, without much hassle and preferably with as little effort as possible.
That’s why an ERP implementation is often painful. Senior management understands the above summarized logic, but the users have to change their daily routines. It makes no sense to implement an ERP system and customize it completely to accommodate the processes and anomalies that the company has built for maybe as long as 20 years… That’s like buying the latest car model and immediately start amending it; changing the automatic gear box for a manual one, changing the seats, taking out the upholstery… An ERP implementation should follow industry-best-practice as much as possible to make it a success and to get the best out of the software purchased.
So back to our opening: what do we see happening in many SMEs.
On one hand: ERP systems are big and comprehensive and require a massive change in any organization. If your SME is not willing or able to make such a drastic shift an ERP implementation is not for you.
On the other hand we see very versatile smaller software solutions (AutoCount for instance) that can do a lot more than a handful of years ago.
Our advice to many SMEs is therefore: think twice before you decide on an ERP implementation and explore the possibilities of smaller solutions. You’ll probably be able to gain 60% - 80% of the benefits that you’re looking for at less than half the cost compared to an ERP implementation. Moreover, the implementation of for instance AutoCount Accounting is faster, cheaper and less drastic for your organization.