Software Applications for Small Business
August 30th, 2008 by Republican By DefaultHere’s a little insight for small businesses into the world of software applications for their business. It’s a brief overview of how small businesses meet their specialized computing needs, from off-the-shelf packages to custom development.
Many small to medium sized businesses have information processing needs that go beyond the capabilities of off-the-shelf software packages such as QuickBooks or Act!. Some augment the packaged application with small custom databases or spreadsheets in general purpose applications like Microsoft’s Access and Excel. Some find industry specific applications that meet their needs or can be modified to reach a level of adequacy. But beyond that a company enters the world of software development and suddenly it’s a whole new ball game.
Most software packages have been developed with a certain set of needs in mind. In some cases a package is designed around the general needs of many different businesses and industries, such as accounting (QuickBooks) or sales and customer information management (Act!). This type of package will generally have a robust feature list and built-in flexibility that allows it to meet the basic needs of as many businesses as possible. That’s how the manufacturer (software developer) sells their product.
In other cases a package was developed based on the needs of a small number of businesses in a specific industry or that employ a specific business model. These packages tend to be more expensive than the generalized packages because the manufacturer has to recoup their investment and make a profit from fewer customers. Still, this route is much less expensive than custom software development even though such a package can cost anywhere from a few thousand to millions of dollars.
Most of these packages are in a constant state of improvement as the manufacturer tries to meet the demands of their (limited) customer base. If a business is lucky, somehow influential or willing to pay for changes, upgrades to the package will meet more of their needs as time goes on. However, caution is necessary when upgrading because this type of package is not tested as fully as an off-the-shelf package and the manufacturer’s changes may conflict with their own. These can also affect how the system behaves, such as changing a freeform text field to require that only certain entries be allowed.
Beyond those are the high-end customizable packages such as PeopleSoft and Oracle Applications (which merged in 2005) and SAP. These solutions provide a robust package that goes beyond the general needs of most businesses, such as accounting and customer tracking, and provide a starting platform for many more specific needs. That platform can then be customized to meet most any business requirement that can be met by current technology. The drawbacks are that this is a very expensive route to take and it is not guaranteed to succeed. Failures in this approach have taken many companies into bankruptcy or reorganization.
The alternative to these packages is custom development. This requires a lot of planning, development and testing but can result in meeting most, if not nearly all, of a company’s requirement. The drawbacks are many. Too many to go into here. This is a route that is not for the faint of heart or those on a tight budget. The rewards are big, but so are the risks.
There are thousands of details that need to considered in developing custom software. Every date, amount, name, description and many other details of every person, place or thing involved in their business, what each of them does and what happens to them has to be examined and accounted for in the design of the software. A failure to be complete in that examination results in after-the-fact changes that can, and usually do, hinder the effectiveness not only of the custom software but also of the company relying on that software.
The problem comes in the fact that if something is missed in planning it usually won’t show up until most of the software development work is done. At that point the software enters a ‘testing’ phase. Usually, however, there’s little real testing. More often than not it’s in the beginning of this phase that failures in design and planning come to the surface. In some cases businesses have to look everything over, usually by hiring someone who knows what they’re doing, and decide if what they’ve done so far is salvagable and if it’s worth continuing with the project.
Over the years I have seen multi-million dollar projects fail because of the lack of planning. On a smaller scale, in smaller businesses and organizations, it usually results in work-around solutions that take employees’ time and keep them from doing what they were hired to do. In short, it lowers the Return On Investment of the software, whether it was a purchased package or custom development.
There have always been safeguards available to prevent those surprises and losses in obtaining and implementing software. However, those safeguards are usually ignored in the interest of supposed cost savings or expediency.
Conversely, we’re all aware of the projects that get planned to death. There is such a thing as too much planning, but there are ways to prevent that from happening. In most cases, simply creating clear and concise goals for each step of planning can prevent both runaway planning as well as a lack of planning. Planning is both art and science so having someone with experience on hand is vital to it’s success.
Here’s an article on one of those safeguards that is gaining support in corporate management in Fortune 500 companies.
If this blog post is interesting to you or you have questions about anything discussed here, please drop me a note or comment below (note that your first comment won’t appear until I approve it.) I won’t try to sell you anything. I just want to see how much interest there is in articles like this one.
