Kraves Candy wanted to taste some of the advantages big businesses gain from enterprise-grade accounting software. So the Winnipeg-based manufacturer of Chris & Larry’s Clodhoppers chocolates decided to eschew its AccPac accounting solution in favour of SAP’s Business One.
The result, thus
far, says president Larry Finnson, has been sweet.
Much of the number crunching Kraves was doing was outside its accounting system, making it difficult to get a clear picture and solidify procedures. As a result of the switch to SAP, the small candy manufacturer, whose biggest customer is Wal-Mart and who competes with giants such as Nestle and Hershey’s, has changed its procedures.
Kraves changed its procedures to fit Business One’s solution, Finnson says.
The system gives Kraves micro-traceability of batch numbers as opposed to the macro-traceability it used to have, he says.
“”I took a gamble and found it was the right gamble. I was a little nervous at first, being a smaller business,”” Finnson says. “”We’re a mid-cap small, small company, but we’re thinking like the big folk.””
The software has made the ISO’s manufacturing process more transparent, he says.
“”If someone’s making an error in a certain department, it comes screaming out at you.””
The suite sits on a Citrix server at third-party hosting company Epic Information Solutions and is maintained by ProjectLine Solutions Inc.
“”We don’t have our own IT guy in-house because it doesn’t pay to do that,”” Finnson says.
The company implemented Business One more than seven months ago, and is just beginning to see an ROI on it, Finnson says. The software has helped it cut down on the number of errors. Kraves is currently in the process of upgrading to the latest version of the software so it can take advantage of its materials requirements planning capability.
“”We’re plugging in exactly what we need for purchase requirements. It’s like killing 10 birds with one stone. When you’re plugging information into it for production, you’re gaining on the business planning side of it as well.””
Not for everyone
Some SMBs have much to gain by moving to enterprise-level accounting software, says Michelle Warren, a Toronto-based IT industry analyst with Evans Research Corp.
“”The benefits of moving is that it’s in place when you grow,”” Warren says. “”IT’s a forward-looking move.””
If enterprise accounting software is already in place, then companies don’t have to spend energy on it when they are in the process of growing.
“”When they’re extremely busy, their accounting system is already in place,”” she says.
Such packages can help companies gain efficiency and provide them with a better snapshot of their business, Warren says.
But there dangers, and enterprise accounting packages aren’t for everyone, she says.
“”If they’re spending a lot of money, and they don’t need it, it can be a detriment. If they’re looking into the future, and aren’t grounded in the present, then it can be a detriment.””
It’s usually a specific business pain point that drives SMBs to consider adopting enterprise software, says Michael Hyjek, a senior analyst for customer segments at Toronto-based IDC Canada.
“”Enterprise software provides advantages that can be used to gain a competitive edge, especially within sectors that have been slow to adopt that specific technology,”” he says. “”As vendors have rolled out SMB-specific software that is more compatible with the unique requirements of smaller businesses, SMBs have realized better value from their investments.””
But reaching the SMB market isn’t an easy task for enterprise software providers, he says.
“”Vendors face challenges cost-effectively selling to the SMB market, which has over a million firms, and trying to effectively utilize the indirect channels where SMBs often buy.””
Jeff Watts, the senior vice-president of channels and marketing at SAP admits it’s difficult.
“”I think creating awareness in the SMB market is a challenge these days,”” he says.
There’s a lot of noise out there, and getting a share of the attention isn’t easy, he says. “”In the SMB market, there’s a real need for technology that provides end-to-end process transparency.””