Business software is software that is used for business purposes. The term is often used more specifically for software that helps a business to accomplish specific goals through the applied principles that the software supports. Some experts also define business software by what it excludes. Gaming applications and similar software would not be considered business software unless used in a customer service or demo environment. The definition of business software has changed along with a proliferation of useful software tools for business; today’s vibrant market, including DSS and CRM tools and much more, contrasts with the early days of business software, when many business software applications were simply generic end-user programs labeled as "business use" programs, such as basic spreadsheets or other tools.
Brief History of Business Software
The essential motivation for business software is to increase profits by cutting costs or speeding the productive cycle. In the earliest days of white-collar business automation, large mainframe computers were used to tackle the most tedious jobs, like bank cheque clearing and factory accounting.
Factory accounting software was among the most popular of early business software tools, and included the automation of general ledgers, fixed assets inventory ledgers, cost accounting ledgers, accounts receivable ledgers, and accounts payable ledgers (including payroll, life insurance, health insurance, federal and state insurance and retirement).
The early use of software to replace manual white-collar labor was extremely profitable, and caused a radical shift in white-collar labor. One computer might easily replace 100 white-collar 'pencil pushers', and the computer would not require any health or retirement benefits.
Building on these early successes with IBM, Hewlett-Packard and other early suppliers of business software solutions, corporate consumers demanded business software to replace the old-fashioned drafting board. CAD-CAM software (or computer-aided drafting for computer-aided manufacturing) arrived in the early 1980s. Also, project management software was so valued in the early 1980s that it might cost as much as $500,000 per copy (although such software typically had far fewer capabilities than modern project management software such as Microsoft Project, which one might purchase today for under $500 per copy.)
In the early days, perhaps the most noticeable, widespread change in business software was the word processor. Because of its rapid rise, the ubiquitous IBM typewriter suddenly vanished in the 1980s as millions of companies worldwide shifted to the use of Word Perfect business software, and later, Microsoft Word software. Another vastly popular computer program for business were mathematical spreadsheet programs such as Lotus 1-2-3, and later Microsoft Excel.
In the 1990s business shifted massively towards globalism with the appearance of SAP software which coordinates a supply-chain of vendors, potentially worldwide, for the most efficient, streamlined operation of factory manufacture.
Yet nothing in the history of business software has had the global impact of the Internet, with its email and websites that now serve commercial interests worldwide. Globalism in business fully arrived when the Internet became a household word.
The next phase in the evolution of business software is being led by the emergance of Robotic Process Automation (RPA), which involves identifying and automating highly repetitive tasks and processes, with an aim to drive operational efficiency, reduce costs and limit human error. Industries that have been in the forefront of RPA adoption include the Insurance industry, Banking and Financial Services, the Legal industry and the Healthcare industry.
Types of Business Software
There are many different types of business software. Deciding which one is best for your business is not always easy and will often depend on:
- the size of your business
- the particular needs of your business
- the tasks that need to be automated
Common types of software used in business are:
- word processing programs
- accounts software
- billing software
- payroll software
- database software
- asset management software
- desktop publishing programs
Packaged software is standardized and generally low priced in comparison to customized software. The functionality may not be exactly what you need, but it could make sense to change your business practices to suit the software rather than having software specially written. The high volume of sales of such software usually means that you will be able to get support and training from a number of different sources. Standard software packages are usually the best choice for small businesses. In some cases, you can modify the software to meet your requirements if it doesn't include all the functions you need. Keep in mind that you will typically need a licence to use a commercial software
Advantages of Integrated Business Software System
To keep your business growing at the dramatic rates you plan for, it is essential to have your business software applications integrated around a single codebase, database and business process. The advantages of designing your systems in this manner yield tremendous cost savings and improved business productivity, including:
- Process Efficiency Across Your Organization: There are several key processes that you may encounter in your daily operations, such as order management, fulfillment, invoicing, cash collection, expense approvals, and financial consolidation, to name a few. Automating such processes enables you to avoid new hires that would otherwise be required to manage these processes, and redeploy staff to higher-value activities to help your business innovate and grow. In an ROI study by independent analyst firm Nucleus Research, Nucleus found that, by using an integrated suite, companies accelerated their financial close times by up to 50%, increase sales productivity by 12.5%, and increase inventory turns by 50%, amongst other efficiencies. In the same study, another customer, Advantage Sign Supply, cut its order processing time by 66%.
- Dramatically Improved Visibility: Real-time visibility is important in making timely informed decisions. When information can be accessed instantly from almost anywhere, without wasting resources on data extraction and tying data from different sources together, employees are better informed and can make more accurate, faster decisions. For example, by having all their business data available in real-time, König Wheels was able to monitor their suppliers' workloads in real-time and doubled their business in four years while saving $120,000 annually.
- Significant IT Time and Cost Savings: With IT no longer having to procure, install, and maintain multiple systems as well as the various integrations between them, a significant reduction in operational costs can be realized while IT time can be spent improving the business operations.
- Accelerated growth: With an integrated software system, expansion to multiple locations and additional sales channels can be accomplished a lot faster because of unified order and accounting management processes and data. Companies can also upsell and cross-sell more efficiently to their existing customer base because of the improved visibility they obtain. Beyond the Rack, a company that was started as recently as 2009, was able to rapidly grow to serve 4 million customers by deploying an integrated system.
- User-Driven Innovation: Because process changes can be implemented quickly, everyday business users are able to apply their functional expertise to tailor processes and applications in a way that improves performance. Meanwhile, IT is liberated to focus on strategic initiatives that can add value to the bottom line by building innovative value-added solutions.
Today, companies in virtually every industry are using sophisticated business software to fuel their growth but many are still struggling to keep up with their growth and manage costs effectively because of a hodge-podge of disconnected functional systems causing process bottlenecks and employee productivity issues. Integrated business software suites are transforming how companies run, and enabling them to transcend growing pains that previously were holding them back from taking their business to the next level of profitable growth.
- Business Application
- Business Architecture
- Enterprise Architecture
- Software Architecture