Learn what foundational software every business needs to set themselves up for success.
Thoreau has a good point for business owners, deeper philosophical interpretation aside: You’ve already got a great business, but you need a support structure to keep it standing.
A solid foundation—especially when you’re just starting out—consists of a basic software stack: finance and accounting software, data and information security software, and customer relationship management software.
But don’t take our word for it … take the word of more than 700 survey respondents (businesses with fewer than 250 employees) that identified these three software types (out of 19 software categories) as most critical for doing business.
Businesses that prioritize finance and accounting software, data and information security software, and customer relationship management software will increase their internal efficiency, improve their customer trust, and significantly expand their leads capture rate.
Read on to find out what foundational software you need to build your stack and how much you should plan to spend.
What do businesses need? A foundational software stack
When you start a business, or even when you’ve been in business for a few years, it’s difficult to know what you should do to maintain and grow your business.
Some common challenges that new businesses face are:
- Keeping track of finances as revenue grows
- Protecting the business and clients from potential security problems
- Effectively managing an increasing customer base
There’s software that addresses all of those challenges. Businesses that adopt these technologies are realizing that they have a significant impact on their business.
Our survey found that finance and accounting software is already having a significant impact across many industries. Regardless of your business size, it’s important to know how your money is coming and going. Investing in finance and accounting is the first step to get yourself out of spreadsheets and into a more competitive position in your field.
Second, we found that data and information security software is fast becoming one of the more necessary investments for small businesses to succeed. Seventy-five percent of respondents report that they already see a significant benefit on their business from this technology.
Finally, customer relationship management software, or CRM, is on track to overtake data management software as the largest software market in the world (full report available to Gartner clients). Adopting a CRM helps businesses to move past seeing their customers as data points and toward nurturing their relationships.
How to start building your software stack
If I told you, “Buy all of these software solutions now,” I would sound like a car salesman and I would be wrong.
The correct answer is that investing in technology is a highly individualized process, but these three systems are a good bet to start your software stack if you want to remain competitive.
Per our survey, you can keep up with other businesses if you invest in each of these software options as follows:
According to our data, to maintain the same level of technology investment as your peers, you should invest in finance and accounting software first, data and information security second, and a CRM solution third.
Some businesses, however, are investing more of their money in a CRM in the next one to two years as the number of employees they have increases, others are investing in data and information security software.
This indicates that, depending on your business size, you should invest in finance and accounting software first if you have less than 50 employees, and you should invest in a CRM first if you have more than 100 employees (probably because you already have finance and accounting software if you have 100 employees or more).
The 3 software types your business needs
Your ‘know your bottom line’ purchase:
Finance and accounting software
What is finance and accounting software?
Finance and accounting software helps businesses keep track of financial records and manage accounts in a faster and more efficient way by automating redundant processes and reducing the number of manual calculations, which can introduce human error.
Who uses finance and accounting software?
Surprise! It’s not just accountants who are using accounting software.
While the healthcare and banking industries are understandably at the forefront of finance and accounting software adoption, businesses in the construction and service industries that have yet to adopt this software are on pace to adopt in the next 24 months.
Our research shows that businesses with fewer than 10 employees are lagging behind larger businesses in their plans to evaluate finance and accounting software. Seven percent of these smaller businesses have no plans to evaluate, compared with 2% among businesses with 11 to 49 employees.
That means that once you hit a modest amount of employees and hit revenue over $5 million, you should probably start investigating what finance and accounting options are available beyond QuickBooks or Excel.
How much should I plan to spend?
On average, businesses can expect to spend around $31,000 on finance and accounting software.
To break that down by business size, businesses with fewer than 10 employees should plan to spend around $11,000, while businesses with 50 to 99 employees should expect to spend approximately $34,000. Finally, if you’re a midsize business with 100 to 249 employees, expect to spend $37,000 on finance and accounting software.
Your ‘stay in business’ purchase:
Data and information security software
What is data and information security?
Did you know that suffering a data breach can gut your small business?
Data and information security software is a solution that can help authenticate, manage, and detect internal and external security threats. Businesses without data and information security are open to attack by external actors, such as hackers, and can lose upwards of $120,000 after a data breach.
Who uses data and information security software?
Every industry we included in our survey is adopting data and information security solutions on some level in order to protect themselves from data breaches, increase customer trust, and comply with new data management regulations such as GDPR.
Our survey shows that members of the banking and financial services industries are planning to adopt data and information security technology more in the next 24 months than other industry segments, followed closely by the construction industry.
Our recommendation is that you invest some time and resources in protecting your intellectual property and your customers’ data, regardless of your industry. However, if you’re in construction, banking, or healthcare, you should highly prioritize data security.
How much should I plan to spend?
The average planned spend on data and information security technologies is approximately $34,000.
That’s a lot of money, but when juxtaposed with the potential hundreds of thousands you stand to lose with data breaches, the cost is worth the peace of mind.
Businesses with fewer than 10 employees should plan to spend a little over $13,000, whereas businesses with 100 to 249 employees should plan to spend upwards of $39,000. Larger companies mean more data and more employees, and every employee is a potential point of failure in a data risk management plan. As you grow, plan for your data and information security measures expense to grow in kind.
Your ‘delight your clients’ purchase:
Customer relationship software
What is CRM?
Customer relationship management software (CRM) helps companies streamline their sales and outreach processes by managing their customer database, tracking communications, and forecasting sales.
CRM software can help you keep track of your current customers and help you move new leads through your funnel. Find out more about the basics of CRM here.
According to Gartner, “the CRM application software market will overtake the data management market, thus becoming the largest of all software markets.” (Full report available to Gartner clients)
Who uses CRM?
Would it surprise you to know that the retail industry uses customer relationship management software a lot? No, I didn’t think it would.
But, what you should find interesting is that in the next one to two years, the construction industry is increasingly investing in CRM software to manage relationships with clients. Manufacturing and natural resource providers and healthcare providers are following that trend as well.
If you own a business, your competitors either already have a CRM or are looking to invest in one in the next one to two years. It would behoove you to invest in one as well to provide your clients with the communication and engagement they expect from other providers.
How much should I plan to spend?
We’ve found that the average planned spend for customer relationship management software in the next one to two years is a little over $31,000.
If you’re just starting out, don’t freak out. Many businesses with less than 10 employees are planning to spend less than $10,000 on a CRM. The point here is that they’re planning on spending money on a CRM over say, virtual or augmented reality (10%.)
According to our survey, SMBs spend or plan to spend about $31,000 on average for CRM technologies, but budget varies by company size. The smallest organizations (those with two to 10 employees) budget about $9,000 for CRM, while larger SMBs (those with 100-249 employees) budget about $37,000.
Now I know what I need, so where do I go next?
Information on Capterra’s Top Technology Trends survey
Capterra conducted this survey in June and July 2018 among 715 U.S.-based small and midsize businesses with more than one employee and annual revenue of less than $100 million. The survey excluded nonprofit organizations. The qualified respondents are decision-makers or have significant influence on the decisions related to purchasing technologies for their organization.
Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.