SMBs: Negotiate for Integration Help When Big Vendors Come Calling


Integration is frustrating for everyone, but small and mid-size businesses face particular challenges when it comes to integrating data from ERP and CRM systems, according to a recent survey by Time Inc. Research & Insights.


Time conducted online interviews of 306 small and mid-size business owners and decision-makers on the Fortune Business Leader Council. TMC.net recently ran a brief article on the results, which, to be honest, were actually published first in a white paper sponsored by and touting the benefits of Sage's Extended Enterprise Suite.


But despite the obvious sales pitch, I thought the survey still shed some light on an under-examined issue: How integration impacts small and mid-size companies who don't have the staff to devote to handcoding integration-which, you may recall, remains the most popular data integration solution.


Of those surveyed, 66 percent said they had "no fully dedicated IT staff." And they certainly pay a price for not having a dedicated IT staff. According to the TMC.net article, fewer than one in 10 SMBs believe their front-office, CRM solutions and "seamlessly integrated" with the back-office accounting and inventory data in the ERP systems. In fact, 41 percent said their CRM and ERP systems were "not at all integrated."


The consequences for this lack of integration are problems with accurate record keeping and lost sales opportunities, as the article notes. But the respondents cited other problems caused by the lack of integration, including:

  • Multiple user interfaces (44 percent).
  • Data integration difficulties (36 percent).
  • The need for separate support services (30 percent).
  • The inability for sales to quickly answer customer questions (17 percent).


So it makes sense that integrating this software would be a priority for SMBs. The survey found that 36 percent plan to move to an integrated software within 1-2 years, and an additional 34 percent will do so within 2-3 years. What surprised me was their rationale: A majority, 60 percent, said it was so they could manage the business cycle from a single user interface. Improved data sharing between customer-facing departments and operations was a distance second, with 33 percent.


Then again, it's important to note that the majority don't of SMBs surveyed do not even have CRM systems to integrate. The survey found that 38 percent used CRM, compared to the 79 percent using ERP.


That could change if AMI-Partners' is correct in predicting SMB spending on application software will grow at a 6 percent per-year compound annual growth rate over the next five years. That would mean a $35 billion spending opportunity for application software and services, according to the firm.


The AMI report also revealed that SMBs invest "with an eye towards delivering cost-effectiveness, business efficiencies and also 'customer intimacy,' according to IT Business Edge's Paul Mah.

Certainly, the integration issues cited by respondents to the Time Inc. Research & Insights echo this.


What this means in the real world is software vendors-including the emerging SaaS players -- will be clamoring for a piece of that $35 billion SMB pie. As a result, SMBs are in a good position to shop around before they buy. Don't forget integration when you talk to vendors. You may find you can negotiate for help with your integration problems; and hey, it certainly never hurts to ask. This is particularly true with SaaS vendors, who already are trying to resolve customer grumblings about integration problems.


You should also be mindful of Mah's advice:

"This is good news for small and medium-sized businesses indeed, since they can expect to see a proliferation of offerings specially tailored and priced towards them in the near future. ... In the meantime, SMBs should simply keep their options open, and spend the money where it makes sense. Do not splurge without considering the ROI, but don't fall into the trap of being penny wise but pound foolish, either."

All I can add is: Ditto.