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Enterprise Resource Planning for Small and Medium Businesses


Enterprise Resource Planning (ERP) for Small and Medium Businesses (SMB)

By David Sugarman, 2008

A new way to manage your company`s data


The Need

1.         An ERP software allows businesses to improve their margins and competitiveness by automating internal processes and improving visibility into business operations

2.         Most common ERP solutions are not cost-effective for SMB. Even the latest Oracle-easy application aims at target markets of $15-30M annual revenue at a sale cost of more than $130K per system

3.         Many SMBs are deprived of an ERP solution due to cost and complexity of installation and use.

The Solution

1.         An ERP-CRM-BI solution based on MS Excel

2.         Computerize, link and manage business activities and processes such as customer service, logistics, sales and finance

3.         Integration and standardization of data (single source)

4.         Standardization of work flow and processes

5.         Reports (management, operations, sales, finance)

6.         Fully mirrored data scheme



Market Background

1.         Worldwide ERP market is estimated at $20-25B.

2.         Israeli market is estimated at $400M.

3.         SMB segment is under focus by ERP providers as market of substantial growth with respect to ERP market demand (5-10% annually)

4.         ERP for SMB in Europe is currently estimated at $4-6B



Target Market

1.         SMB in Israel (later international). Business of up to $10M annual revenue

2.         Non-manufacturing retail and services market segments

3.         Hebrew, Arabic, English and French oriented

4.         Accounting firms

Business Models


Business Model Type /
Direct Sales Subscription Value Added Resellers (VARs)



Target customers High end of SMB Small and Medium businesses Business partners and distributors Service providers
Revenue stream Transaction based Ongoing Transaction based Transaction based
What is to provide Unlimited time licenses Duration based licenses Unlimited time licenses Unlimited time licenses
Business relationship with customer Tight, transaction based Tight and ongoing Tight and ongoing Tight and ongoing
Payment method Regular Internet Regular Regular
Unit price ($) 20K 800 per month 5K 10K


1.           ERP system based on MS Excel. Incorporates algorithms, and frequently used business processes of various business types.

2.           Main Modules:

3.           Warehouse

4.           Customer Service

5.           Technical Support

6.           Sales

7.           Management

8.           Finance

Competition – Giants

  SAP Oracle Microsoft
Description The leader in SMB ERP with an all-in-one ERP solution Based on Oracle’s Accelerate, offers more than 20,000 possible solutions The leader in SMB Middleware
Business Model Strong solutions-centric ecosystem through its PartnerEdge program New pricing models, solutions catalogs, collaborative campaigns, referral fees, and partner loyalty program Relies on partners to deliver sales, implementations, and additional micro-industry functionality
Recent Investments Acquisition of TopManage Financial Systems Acquisition of PeopleSoft, JD Edwards Acquisition of Great Plains and Navision
Weakest Vertical Market Healthcare Healthcare No information was available
Total SMB revenues for 2006 (US$ in millions) $2,563 $2,328 $989

Competition – Smaller Vendors

Excluding SAP, Oracle, Microsoft

Company SMB Revenues (US$ millions) in 2006
Intuit $2,198
Infor $2,075
The Sage Group $1,873
Lawson $664
Epicor $384
IFS $327
Exact Software $304
Agresso $298
Others (total) $1,327



1.            Cost effective ERP solution for the SMB market

2.            Entry barriers – built-in comprehensive framework with many ready-to-use designated functions for the SMB market

3.            Intellectual property registration in process

4.            Main advantages

5.            Built on top of MS Excel. No need for heavy-weight HW/SW infrastructure and tools

6.            No need for dedicated IT personnel support

7.            Easy to integrate into the company’s IT processes

8.            Ease of use – leveraging the simplification of MS Excel

9.            Solution simplification enables diverse revenue streams

10.          Significantly lower total cost of ownership – starting at 5K$ per installation plus 800$ per seat


1.            First system in production since 2006 in a virtual private operator cellular company in Mali

2.            Two pilot systems are planned to be implemented in a medical device sales company and a media publishing company

3.           Plan to raise seed money of $1.5M


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