We work with dozens of clients, big and small, every month. Sometimes – say once a year – there’s a client whose situation perfectly encapsulates all the tensions involved with cloud computing. We just had that client. Here’s their story.
Small company, big needs
The company – lets call them Fisher’s Piers – is a small B2B distribution firm, with 10 office staff and a handful of traveling sales reps. Their central workflow consists of receiving 5,000+ product types at warehouses, selling it via sales and CSR reps, then sending it out. Simple enough, sure, but for a business that size, the logistics, accounting, and CRM demands are enormous.
Until recently, Fisher’s Piers met those demands with Sage ERP, an archaic on-site solution. Sage worked well enough – product was sold, customers were happy(ish) – but the system had real limitations. Usability, support, price, and the lack of eCommerce were all growing issues. Fisher’s Piers needed something new.
Thus it was that Fisher’s Piers approached us for help. As with all our clients, we analyzed their situation and produced a report and recommendations: specifically, we recommended Brightpearl, a hybrid inventory management, CRM and accounting tool aimed at small businesses. It was (and is) perfect for them.
Unfortunately, Fisher’s Piers hasn’t adopted a new system yet, Brightpearl or otherwise. Their struggle to make a decision illustrates a few crucial tensions around ERP, cloud, and IT consulting. Here goes.
ERP is misaligned with small business
To start with, Fisher’s Piers asked us for ERP recommendations, but they didn’t really want an ERP. ERP solutions are (historically) built for middle-managers at large (150+) firms with disposable operating incomes, not 15 person companies. ERP is misaligned with small business.
The problems Fisher’s Piers had with Sage illustrate this point perfectly. Sage’s user interface is aimed at middle-management, making it shitty for everyone else (sure, I have a list of reports available right here, but how the f*** do I add call notes?). Support sucks because it’s assumed that Sage customers have dedicated IT staff (like most small businesses, Fisher’s Piers doesn’t). The price sucks too – what 15 person company wants to pay $40k/year for software? That’s enough money for a new hire, more office space, real Christmas bonuses (!). To top it off, there’s no eCommerce options because the bulk of Sage customers can afford to build their own portal. ERP is misaligned with small business.
Thus we recommended Brightpearl – it provides all the functionality Fisher’s Piers needed in a slick user-centric package, at an affordable cost. It’s perfect for them. Predictably, Brightpearl doesn’t call themselves ERP, nor should they: they’re aligned with businesses under 50 employees. They’re not “Enterprise” Resource Planning. They’re smart software for small businesses.
Cloud computing is still scary (especially for ERP)
Although Brightpearl is an obvious win from our angle, it was (and remains) less obviously so for Fisher’s Piers. The problem? It’s entirely cloud based. Fisher’s Piers’s position is a bit paradoxical, because one year prior to this engagement we set them up with a cloud based CRM, which they love. Somehow, ERP crossed an invisible line of trust: the data it represents is so immense, so mission critical, and so, well, important, that keeping it on someone else’s servers is cringe inducing for them.
That’s understandable, despite Brightpearl’s outstanding uptime record. Some businesses just aren’t ready for the cloud: it’s scary. The irony, of course, is that their on-site system’s track record is fairly poor, while Solve360, the cloud based CRM we set them up with, has never failed. Oh well.
The reseller model sucks
Part of the difficulty here is that Fisher’s Piers is in a contractual relationship with a reseller. For those who don’t know, resellers are IT consultants who receive kickbacks from the vendors they recommend. The consultant’s incentive is to implement their pet solutions for every client, regardless of the client’s unique processes or needs.
We’ve long discussed the reseller/vendor/client triangle on this blog: suffice it to say that we’re not big fans. This particular reseller, who originally implemented Sage for Fisher’s Piers, has recently been selling them on Microsoft Dynamics NAV, a shittastic ERP geared at (what else) big companies. It is objectively wrong for them.
There’s a host of issues here, but the central point is that the reseller model of consultancy sucks. Like ERP, it’s misaligned with the client’s needs, failing to deliver true business value. This is self-serving, but we think consultants should objectively identify their client’s unique business needs and map those needs to appropriate solutions. Tailored expert experience (and the time and money it saves) is the core value of IT consultants, not a reseller license.
Fisher’s Piers isn’t alone. Scores of small businesses face similar issues – how do we manage product? What’s an integrated accounting solution? How do we stay close to clients? Solutions will vary, but newer cloud based offerings like Brightpearl and Solve360 offer small businesses a compelling alternative to industry heavyweights like Sage, Microsoft, or even Netsuite. The market is changing: powerful new vendors are aligning with small businesses, with increasingly obvious benefits.
Likewise, the role of consultants is changing, we think for the better (the bulk of resellers might disagree). Small businesses can look forward to consultants who take their unique business needs seriously, without selling unsuitable software for the reseller’s fee.
What do you think? What does ERP mean for small businesses? What’s the appropriate role for consultants? What should Fisher’s Piers do?