Back in 1999, when Larry Ellison joined the Apple board, skeptics were suggesting that Larry’s involvement would disrupt the steady growth of his own company, Oracle Corporation. Actually, the opposite proved true and in the following years Oracle, the largest software company and champion of database management systems, grew at an unprecedented rate: Sales eclipsing $6.2 billion and a 44.6% a market share by 2004. Since business software such as ERP – enterprise resource planning and CRM – customer relationship management provided a major boost to productivity, many large companies spent many months, and many millions, focused on development — making Larry a billionaire.
The Internet received substantial publicity as the biggest IT story of the 1990s, but arguably, the second most important trend was the growth in ERP systems. ERP basically means the integration of high end applications, usually based around manufacturing or accounting systems. As these systems grew more sophisticated and complex, they started to interact with data from purchasing feeding straight into the manufacturing system, and sales information flowing directly to the general ledger. The rise of packaged ERP solutions put an end to companies writing their own application software, and every large organization capitalized on companies such as Oracle and SAP. While the growth of the ERP vendors in the 1990s was phenomenal, the basis for this history lesson forms the background for what is transpiring today.
ERP and application software were the buzzwords for large corporations handling millions of dollars of goods and a seven-figure annual tech budget. But, like technology itself, this changed dramatically in the past decade.
Fifteen years ago, Customer Relationship Management meant absolutely nothing to the average Joe. Today, it is on the mind of every small and medium sized business. CRM is the tool by which companies track, manage and increase relationships with their customers and it as crucial today as accouting and inventory software. The ability to effectively track and engage an audience allows companies to close leads and increase recurring customer sales. Web-based CRM tools are now a dime a dozen, with prices starting at a measly $10 a month, that allows connectivity to Google Apps, accounting and inventory software, and company websites. The revolution is not limited to CRM systems and includes many business operations such as email and project management, social media tracking, invoicing software, phone management, file management, design and programming software, and every component vital to running a successful business in 2012. There are even online stores where you can shop for applications such as Google Apps Marketplace and Intuit Marketplace.
Jean-Pierre Côté, founder and managing director of digitalMontreal Inc., uses three cloud-based programs: Google for e-mail management and collaboration, FreshBooks for invoicing and accounting, and Dropbox to share files among his eight staff members and 40 freelancers. These three programs are essential for running his company, he says, and he’s spending only about $600 a year.
“That’s nothing,” he says. “For that much I can run my entire company.”
He can’t put a dollar amount on increased productivity, but he does say that his operation is now seamless, collaborative, and more organized. Now that his operatioin is mostly web-based and easily monitored, Jean-Pierre is relying more on outside contractors at a much reduced hourly rate.
“The amount of money you save is incredible,” he says. “I’d have to pay thousands a year to operate my company, but now I can do it for under $1,000.”
Aside from the pre-packaged software solutions, small and medium sized companies are now turning to software development firms to customize an online solution for them. Although software developers are in high demand, technology has so advanced that developing a custom application that can integrate with existing operational software and websites is easier and cheaper than ever. Coffeeforless.com, for example, is in the midst of developing a system designed to manage coffee products it sells from its magento e-commerce site.
“Almost every feature we’re putting in is a customization for us,” says Gary Durbach, the e-commerce guru Coffeforless hired from LeviaIT, an boutique software development firm that has been consulting Ben Kirshner, CEO at Coffeeforless, for almost a decade. Among the features being designed for Coffeeforless by software developer LeviaIT are processing orders for multiple warehouses based on product availability and customer location which enable products to be shipped from the appropriate warehouse, shipping tracking information per warehouse, and robust inventory reporting per warehouse.
It is becoming daunting to locate the appropriate software for your operation — which is why software firms such as LeviaIT are now offering consulting to startups and SME’s. Rebekah Price, a rising fashion superstar whose designs have been featured in Flare Magazine, the New York Post and Vogue U.K., lacked the basic resources to conduct her business online. As developer of her new site, rebekahprice.com, LeviaIT helped consolidate her business operations by migrating her to Google Apps and implementing a new inventory management system. These systems have allowed the incredibly talented designer to focus on what she does best: Focusing on her world-renowned creative talents.
Aside from shareholders of Oracle Corp., no one should get too worried about Larry Ellison and his billions. What everyone should do instead is figure out what software they could implement in their own business and strive to replicate in 2012 what Larry did in the 90′s.
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