When it comes to enterprise resource planning (ERP) software adoption in Canada, the SMB market is the fastest growing market by far. These smaller customers are seeing the need to buy for a multitude of reasons, not least of which is to improve their business planning. Also, they are growing, not only across Canada but offshore and to the US, and, more than ever, they have to comply with regulations around personal privacy and financial transparency – especially if they’re looking to go public.
As a result, smaller organizations are often looking for more substantial systems, and, according to Joel Martin, vice-president, enterprise software at IDC Canada, while the demand is there, the enterprise vendors behind these systems are just now starting to “really crack that nut” and gain the partner channel and industry expertise they require to go in get the sale.
Here are four strategies, provided by Martin, that larger enterprise ERP vendors are using to sell to small and medium-sized businesses, highlighting some of the needs of fast-growing SMBs:
- Build a channel: For larger companies such as SAP and Oracle, the key to gaining ground from established small ERP vendors in the SMB market is all around building up good partners that will be able to speak to that market. “First and foremost, the way of addressing that market is by building out partners and partner competencies around products that [vendors] are scaling to meet that particular business side,” says Martin.
- Expertise counts: The second thing that will convince SMBs to buy from vendors typically associated with larger customers is the superiority of their industry knowledge, or focus. More and more, larger vendors are trying to use their marketing skills to help them go after customers in specific industries such as manufacturing, the public sector (municipalities and even provincial governments) and retail. As well, the area of energy and utilities clearly represents an opportunity, says Martin, especially among the multitude of medium-sized companies growing rapidly in Alberta, “or the utility companies in Ontario that are having to comply with the Ontario Energy Board’s regulations around smart metering.” These smaller companies often want to buy something that will help them integrate customer relationship management (CRM) applications, back office functionality and other important applications.
- Focus on roles: The third component vendors are trying to succeed at is gaining a good understanding of the roles people play in their particular businesses. So, what are the critical things a CFO at an SMB will want to get out of a back office application? “What about a VP of sales or a CEO? What about the COO? What are their business needs with regards to competing locally or globally, better integrating their own partnerships with larger or smaller suppliers and the customer experience?” asks Martin. And, to be clear, he says these role players are not necessarily even thinking about technology per se, they’re simply focused on how they might enable good customer experiences for their clients, or gain consistent access to the kind of information they need in order to capture, distribute and collaborate with their peers to “drive operational efficiencies, increase worker productivity and succeed financially.”
- Get together: Finally, vendors are trying to pull together a suite of applications that will allow partners to help users adopt them quickly and inexpensively. “Suites aren’t dead, they’ve just changed to be more industry and role-specific,” explains Martin. And they’re being designed to help customers realize the rewards of better financial transparency from their back office systems, better inventory and supplier management from supply chain management systems, better customer loyalty, better integration to inventory, and better integration from the accounts payable department to the back office.
