When it comes to small business software, the silo approach has ruled the roost for years – a testament not to its effectiveness, but to the difficulty of SMB ownership.
The small and mid-sized business market is fast-paced and volatile; growth is often explosive. While this growth is critical to realizing your business vision, it's also chaotic, leaving something of a shockwave in its wake.
Companies that have experienced such swift expansion find themselves scrambling to play catchup, trying to quickly adjust to their new standing without letting performance suffer. Unfortunately, the impending need to fill a gap or complete a task puts pressure on decision-makers, who must prioritize immediacy over efficacy when choosing any new small business software applications.
It's the very nature of small business growth (rapid and explosive) that makes software silos so popular. SMBs, in their infancy, struggle to carve out a niche, establish themselves, generate revenue and become productive. Each investment decision is cautiously enacted, because budgets are simply unequipped to accommodate superfluous spending. As such, disparate business tools are implemented individually along the way, in response to the changing needs and capabilities of the enterprise. In short, business software silos are popular because they've traditionally been the only viable option available to young companies.
In order to be effective, your small business software needs to provide a complete picture of all the key aspects of your enterprise, such as customer relations, financial accounting, HR solutions, payroll reports, marketing, sales and business insights. In the typical silo approach, SMBs must cobble that complete picture by pulling data from all of their silos. Since each silo is responsible for a separate function, the overall business management system is fragmented – the company is responsible for manually unifying the data, analyzing it and ultimately using it to build meaningful reports.
How Does It All Start?
There's a wide range of small business software on the market, and it's not usually feasible for a fledgling company to invest in all of them at once. As a result, many businesses need to assess their priorities and determine which solutions have the most wide-ranging, immediate and powerful benefits.
When your doors open, you need basic accounting solutions: payroll processing to compensate your employees and finance management to keep track of your money. QuickBooks is typically the first software investment you make, because it's a reasonably effective tool with a fairly low cost. Unfortunately, it's not an effective solution for the long term: Many businesses quickly find that QuickBooks is ill-equipped to handle their growth. As a temporary solution, though, QuickBooks is an adequate starter tool for young businesses – and it's certainly less error-prone and time-consuming than manual accounting and payroll processing.
You have accounting solutions in place, but you need customers in order to generate revenue and keep your business afloat. A basic customer relationship management (CRM) system is your logical next step. Simple CRM stores your important customer information in a single silo, and is later used to develop consumer profiles featuring demographics and buying behavior. More enhanced functionalities, like those offered by Microsoft Dynamics CRM, include lead development, relationship-building and opportunity management.
As you find your footing and get comfortable in your business space, your needs begin to change. Your focus shifts from just staying afloat to actively optimizing your performance, and rapid growth makes this optimization increasingly difficult.
This is the point when most small and mid-sized businesses must make a choice: Should we abandon the siloed system we've begun to build, or should we augment the capabilities of our existing small business software by adding more silos? Stay tuned for Part 2, where we discuss the next step most businesses take when pursuing the path of siloed business software.
Let the experts at SMB Suite help you optimize the performance of your software silos. Our comprehensive small business software suite is specially designed to help you overcome the complicated challenges of young business ownership, providing solutions that are simple and scalable. Call 888.525.6398 or click the link below for a free quote.