What are your associations with the word “business”? What names come to mind with this word? Probably, you will name Google, Amazon or Facebook – the biggest market players with annual revenue of hundreds of billions. Surely, they are businesses. However, the leading role belongs to SMBs – small and medium-sized businesses. These teams exist in every industry and are responsible for insane cumulative revenue. Similar to large corporations, these brands also can benefit from dedicated software, e.g. ERP for midsize companies. We are to look at key points about this enterprise-grade apps’ type in detail.
Initially, it’s important to understand how SMBs and medium companies work. The majority of economic departments and analytical agencies consider the main difference between all SMBs and big enterprises. However, we want to go deeper and look at features of midsized teams that are different both from small businesses and large brands. It’s hard to overestimate the role of SMBs and mid-teams. For instance, they represented 99% of all enterprises in the EU in 2015! Similarly, the US market featured 99.9% of small teams in 2018! Regardless of the industry, SMBs are vital players so let’s explore them more carefully.
First things first, you may be interested in the idea of midsized companies. They are placed right between small local teams and worldwide multinational corporations. In other words, midsized brands represent the main development stage for almost any company. Looking at numbers, Gartner experts define medium business as a corporation with 100 to 999 employees and/or $50 million to $1 billion in annual revenue.
In the USA, the local Department of Commerce uses formal standards to define the size for each specific industry. These standards are based on the number of employees and annual revenue. For example, if you are an owner in a towing firm, then you should look for rules in the Motor Vehicle Towing category. It specifies that a business must have $7.5 million to $1 billion in revenue to be considered as a midsized team. This sector doesn’t have rules for employees. Simultaneously, a record company requires at least 250 employees to become a medium-sized team, while magazine publishers must hire at least 1000 workers.
You may be wondered how ERP in finance work. Check the related article to figure it out.
But what about the distinctive features of these teams? They are essential to know as you can select, order and deploy the best ERP for midsize company based on this knowledge. Here are the key characteristics:
You can see that mid brands have several unique features. With this knowledge, it should be easier to get the idea of an ERP system for midsize company. Thus, let’s discover how enterprise-grade apps work, particularly, in the sector of SMBs.
Well, the main definition of an ERP app is pretty simple. It’s a product focused on management and optimization of core business processes, collecting and standardizing data, and automating basic tasks. This principle can be applied to any industry and any business size. Still, different companies come with different requirements that define major functions of ERP. For mid companies, the number of modules is usually lower than the same for big teams. However, they also list unique needs.
We will unveil the main difference between custom and ready-made ERP solutions, plus functional areas for midsized software.
Custom and out-of-the-box products are the two main types of enterprise apps as they represent two basic development strategies. Let’s look at the terms and features:
Talking about the best ERP for midsize company, we should mention unique needs. This idea is based on the current and planned goals of your business that define the type you need. Say, a medium distributor of various gadgets rarely needs exotic tools. Instead, it relies on proper interaction with customers and suppliers, solid tracking of orders, and good quality control. Instead, even midsize bank has to pay extremely high attention to security, business rules, taxes, and dozens of other financial aspects, not to mention traditional tools like HR or CRM. Thus, you should choose one or another type according to your team’s requirements.
Work in a bank and want to know more about the software? Then the article “ERP for banking industry” is for you.
Modern apps for enterprise management are built on the same principle. Webopedia defines ERP modules as separate parts of the program focused on certain business processes, i.e. one module covers only one area. Thus, clients can choose the most suitable modules, combine them, and purchase the final program with required features only, for example, accounting + SCM tools or HR management + WMS + CRM. As you know, prepackaged solutions rarely offer this level of customization so mid businesses are more interested in custom products.
Average ERP for midsize company should focus on a few key areas instead of all-in-one services that are useful for larger firms. Medium teams often want to manage only a couple of core processes such as warehouse management, fleet tracking, CRM, etc. In this case, you can consider ordering dedicated applications for each functional area. Nonetheless, an ERP system is efficient because it unites all the essential data and gathers in one place so your employees can speed up in-house processes greatly.
Hence, let’s look at the functional modules. The list includes only those elements, which are useful for midsized companies:
Apart from these managerial approaches, ERP solutions for midsize companies provide handy tools for reporting and analyzing, creating dashboards and tracking workflows, integration with other in-house or external systems, etc. Finally, there are dedicated modules for certain industries, e.g. government, healthcare, transportation, and so on.
Are you involved in the logistics industry? Be sure to read about ERP for transport company to reveal the specific stuff.
Midsized companies are likely to use legacy software, particularly, in the IT department. Respectively, customers are unsatisfied with inefficient resource planning, long delivery time, poor quality, low level of personalization, and more. Lack of quick data access causes various problems from leads’ loss to performance dips. These issues are easy to solve with a dedicated ERP for midsize company. A single database with real-time access to all core information packages boosts key business processes and improves customer experience.
Let’s look at how ERP apps can benefit mid brands in detail:
This list isn’t exhaustive. For each company, the exact benefits will be slightly different, especially, if you use custom ERP apps tailored to the specific requirements.
If you’re looking for apps for builders, check out the info on ERP for construction company.
Summarizing the info, we want to list five key questions and answers to them. They will be useful not only for owners of midsize companies but for everybody interested in the idea of ERP and proper resource management.
It means enterprise resource planning. Generally, ERP is a strategy for corporations focused on optimization of processes. Plus, we know ERP as software applications designed to meet the goals of this strategy.
Among all ERP products, you can choose between custom and ready-made apps. The first type includes unique software with all the modules you want to add. The second one features packages that are similar for different users and are based on popular modules.
For more types, be sure to look at the guide dedicated to ERP for services company.
This software category can enhance business processes greatly and cut costs. Mid businesses that use ERP apps usually improve their collaboration with partners, get high scalability for future expansion and enhance customer experience.
Choosing among famous vendors of ready-made applications, you should consider Microsoft, NetSuite, SAP, and Sage. If you want to get a good custom product, our team of keen developers is ready to work! Here’s another hint: opt for cloud solutions.
When it comes to pricing, be sure that you include all elements of the total ownership cost. Typically, 5-10% go for system management and maintenance, 10-20% are for infrastructure, 15-30% relate to the software itself, and 40-60% are all about HR, including training and operating expenses. For midsize teams, average ERP app will cost from $150,000 to $500,000.
Is it time to purchase the software? Don’t forget to educate yourself about ERP system cost.
At the end of the day, the best software product is based on your unique requirements. Regardless of the company’s size, it’s recommended to choose custom apps that can be tailored to your business goals, including current and future ones. In DICEUS, we’re happy to deliver unique ERP systems for different industries: insurance, finance, construction, healthcare, travel, sports, e-commerce, and so on. We guarantee to consider all your requirements and develop the most suitable product without hidden costs. Consultations are totally free!