Are We at the End of Point Solutions in Small Business?

By: Andrea Lotz Monday April 20, 2015 comments Tags: small business

Even if you don’t know “point solutions” by that name, they are a part of your life.  It’s the mentality that says, “There’s an app for that.”  It’s the cute little productivity tool that reminds you to walk the dog, the alarm clock that could wake Rip van Winkle, the app that gets you to run by threatening you with rapidly-pursuing virtual zombies.  Each of these is a solution to one specific problem, or perhaps a couple of closely-related problems – a point solution. 

Buying apps is fun, and they work well for simple problems like waking up.  But more and more small business owners find themselves extending this mindset to their business management.  Solving one problem at a time, they cobble together a sort of patchwork quilt of apps to get things done. 

It’s possible to run a business this way.  But it takes a lot of time and energy that could be used elsewhere.  Small business owners need a scalable, affordable ERP solution, designed with the needs of small businesses in mind. 

Here are a couple of reasons I think point solutions, trendy as they are, actually hinder the growth and potential of small businesses.  This year, consider looking for a more integrated solution – you’ll save yourself a lot of time and money.  Here’s why:

1. Problems Rarely Occur in a Vacuum

Problems have a tendency to be social creatures.  Fixing one problem has a tendency to reveal another, and another after that.  Point solutions are good for targeting very specific problems.  But they just don’t have enough data to solve broader problems, such as, “Why isn’t my marketing strategy working?” or “Why don’t I have customers?”

So What?  Unfortunately, most of the problems that are worth solving for small business owners are systemic in nature.  They require access to more data than a single point solution can access.  It’s easy to get to a place where you’re saying, “I’ve tried every app, and nothing is working,” when really all you’ve tried is a dozen different-colored band aids.

2. Problems are Masters of Disguise

My first job was working as a receptionist.  When there was a problem, blame and accusations circulated around the office.  They thought the problem was that they were hiring lazy employees.  The real problem was that they needed small business ERP.  They were giving all instructions verbally, had no CRM whatsoever, and stored all information in spreadsheets.

Identifying the true nature of problems has plagued every small business I’ve been a part of.  You can spend a lot of time trying new point solutions, trying to find the perfect combination of apps to solve a problem you don’t fully understand.

So What?  Say you have one big problem, which causes a lot of smaller problems.  Would you rather solve each small problem, one at a time?  Or would you rather knock out that big problem, with one big solution?  I know for sure which one is faster.

3. Integration is a Pain

The good and bad news about point solutions is, they’re tailor-fitted to perform a specific need.  If each of your tools creates its own uniquely-structured database, integrating them is a logistical nightmare.  Most small business owners don’t have the time, knowledge, or resources to make this happen.

 Another consideration: You’ve patched together a number of apps.  Something stops working.  How do you track down the cause?  Which app company should you call for support?  Does your web developer answer his phone every time your website breaks?

So What?  How many emails, sent by your email software, are resulting in actual sales in your separate ecommerce software?  How many are being entered into your separate CRM software from telephone orders?  If your apps aren’t talking to each other, it’s almost impossible to figure out which solutions drive change and which aren’t pulling their weight.

4. Point Solutions are Reactive

Here’s the biggest problem I see with point solutions.  They encourage a whack-a-mole kind of approach to business management.  See a problem, hit it with a hammer.  You can see why this is tempting – it’s exciting, you feel like a lot is getting done, you’re trying out the newest, best, most colorful app to fix it.  But when you’re being reactive, it’s difficult to be proactive.

So What?  Struggling for survival and planning for the future are mutually exclusive, because they both take a lot of time and energy.  Are you patching when you could be moving forward?

 

So, what’s the solution?  Buying enterprise-level ERP software is ridiculously expensive.  A lot of the ERP giants, like Oracle and Microsoft, are creating “Tier 3” software for smaller businesses.  But they tend to be stiff, un-intuitive, expensive glorified accounting tools.  We need a way to combine the customizability and best-of-breed mentality of point solutions with the stability and integration of a platform.  And we need all this without the bulk and expense of a suite.  Small business ERP is in demand, and the only people who can decide what it’s going to look like are small business owners. 

Is an integrated solution appealing to you?  Let us know in the comments!