Advanced, fully loaded ERP systems have long been seen as tools reserved for giant corporations with big budgets and IT teams. High costs and complexity historically kept smaller firms away.
For one in three organizations, expensive implementation was the top reason for not adopting an ERP. Other common barriers included having different priorities, implementation challenges, and an insufficient need for such a system.
However, the landscape is shifting. The business environment — both technologically and organizationally — is becoming more sophisticated and demanding. This drives SMEs to recognize that the software offerings with limited functionality that are targeted at small businesses, let alone spreadsheets or basic apps, will only take them so far.
That’s why GROW with SAP, a solution package designed for midmarket companies, brings the capabilities of SAP’s flagship S/4HANA ERP within their reach. SAP’s competitors (Oracle with their Fusion Cloud ERP for mid-market, Microsoft with Dynamics 365 Finance, a scaled-down offering for SMEs) follow the same trail, saying their product lines now include various types of SME-adapted versions of their ERPs.
It’s a definitive change: previously, SAP’s approach was different, as they offered a separate product for SMEs, SAP Business One, and now they're expanding their flagship ERP offerings to the new audience.
But how exactly does this approach now emerge?
How Enterprise-Grade Functionality Is Changing the Landscape for SMEs
The pivotal aspect of an offering such as GROW is the enterprise-grade functionality once thought to be the exclusive domain of large corporations. It offers a rich suite of features — from core financial and accounting management to real-time analytics and automation — scaled for mid-market businesses. Hence, a growing company with 50, 100, or 500 employees can access the same capabilities that Fortune 500 firms rely on to manage their operations and strategy.
Moreover, GROW with SAP provides prepackaged best practices and pre-configured business processes tailored to a wide range of industries. These have been refined through years of experience from both SAP and its clients. This level of guidance presents a unique opportunity for SMEs to establish their processes correctly and efficiently.
Last but not least, these capabilities are multiplied by AI features added throughout the offerings. For example, SAP has deeply integrated AI into GROW, which will help customers simplify their everyday work and grow their business.
Crucially, these advanced features directly support business growth and efficiency, as well as the idea of a cloud-based offering.
Cloud Has Become the Power Move, Not a Vulnerability for ERPs
After years of working with on-premise SAP solutions, many clients — and even some of our consultants — initially viewed the shift to the cloud with skepticism. As my colleague Pavel Zhylko, Senior Partner at ACBaltica, often recalls from those early days: "Seeing them shift to the cloud felt like a step too far at first. Would the cloud provide the same level of reliability? Could it handle large-scale operations without compromising performance? Wouldn’t our clients pay even more in the long run due to subscription fees or unexpected challenges during migration?".
He explored this shift in more detail in his article on ERP cloud transformation. Now, he’s confident that the cloud has become one of the biggest enablers of ERP accessibility, eliminating traditional barriers to entry.
First, the client is entirely relieved of all tasks related to building and maintaining the infrastructure, along with the associated costs. With a cloud solution, the vendor manages these responsibilities, which are included in the price.
Second, in a cloud ERP model, there’s no need for an upfront purchase of expensive licenses and hardware. This means a small company starts with lower costs. This pay-as-you-go flexibility transforms a heavy investment into a manageable operating expense.
And then, with SAP’s GROW cloud ERP, companies can quickly scale (up or down) and adapt as needed. You can request additional features or users from your SAP provider without worrying about servers, updates, or infrastructure – a typical B2B SaaS product, in fact. The flexibility of controlling your budget via the number of users is also a factor.
Another key advantage of cloud ERP is that the provider handles improvements, security patches, and compliance updates with minimal disruption to business.
But does an SME-focused cloud ERP provide capabilities that are 100% identical to those of traditional on-premise ERPs? Yes and no.
Balancing Flexibility and Standardization
Traditionally, large on-premise ERP projects often involved customizing the software extensively to fit a company’s existing processes. But now, there is another strong approach in the philosophy of implementing B2B tools: a move away from heavy customization.
It emphasizes out-of-the-box best practices and configurations that work for most businesses, with minimal tweaks. It significantly reduces costs and speeds up implementation. Instead of spending months setting up your ERP environment, the new tools help businesses adopt the preconfigured processes mentioned above. SAP has been refining these processes for over 50 years, drawing from its worldwide experience working with businesses across various industries. This also ensures the system aligns with industry standards and compliance requirements from day one.
Of course, every business is unique, and a balance between flexibility and standardization is important. The goal of modern ERP isn’t to force a one-size-fits-all process on every company but to provide a strong, efficient template as a starting point. And sometimes it works backwards just fine: we at ACBaltica can recommend adjusting real business processes to those pre-built in S/4HANA – to make them more standardized.
If truly unique needs arise, today’s cloud ERPs often allow extensions, integrations, or even customizations. This way, adaptability is maintained for exceptional cases, often with additional costs, though. And vice versa: avoiding customization improves the speed of implementation and makes the total price of the solution more attractive.
For some companies, implementation speed plays a big role in their growth — along with scalability. But are there even more ways an SME-adapted ERP can help tackle those challenges?
Why Fast-Growing Businesses Need Scalable ERP Solutions
A startup that doubles or triples in size can quickly find that the simple tools it used early on can’t keep up with the complexity of a more extensive operation. As a business expands, it may need to comply with stricter financial regulations, undergo audits, or handle multi-currency accounting if it enters new markets. What worked for a 5-person company no longer works for a 100-person company.
An overwhelming 93% of businesses have outgrown some of their digital tools since launching — 23% report outgrowing all of them.
This dilemma highlights the need for right-sized, scalable systems. Fast-growing SMEs need ERP systems that they won’t outgrow. A modern ERP solves these issues by having scalability at the heart of its feature architecture. Moreover, a scalable ERP is designed to handle more transactions, users, and complexity without a decline in performance or reliability.
GROW with SAP, for example, is essentially the same powerful S/4HANA cloud technology used by large enterprises but packaged for smaller teams, meaning there is plenty of headroom as the business expands. If an SME doubles in size, it can simply activate more capacity or additional modules in the ERP; there’s no need to switch to a whole new system.
This scalability also covers new functional needs. A company might start out just needing financials and sales in the ERP but later find that it requires an entire manufacturing or advanced analytics product — a scalable ERP lets them seamlessly add these products to the company’s software landscape when the time is right.
And there’s the implementation speed question we’re coming back to. SMEs can go live on GROW with SAP within a few months. This means a small or mid-sized company can start reaping the benefits of a world-class ERP in under six months from kickoff to go-live.
As a result, a fast-growing retailer can seamlessly go from 50 to 5,000 orders a day, or a manufacturer can ramp up production volume, a warehouse can hire 100 more people, and the software will scale to match that demand.
The Future of ERP for Businesses of All Sizes
The convergence of cloud technology, automation, and industry best practices has dramatically lowered the cost and complexity of implementing an ERP. At the end of the day, this whole shift is about empowering smaller companies.
For a startup or an SME in a tough spot regarding its budget or profit margin, the ability to receive ERP functionality without adding to their bills can be crucial. For those companies that feel more comfortable, adopting an ERP can be a way to stay on track with the competition or outgrow them.
The market now lets you use the same system to manage operations that a larger competitor uses, which may transform SMEs' business opportunities.
Looking ahead, we believe ERP providers will keep doubling down on user-friendly, scalable systems enriched with smart features that grow alongside the business. The line between tools for enterprises and those for SMEs is becoming increasingly blurred. Solutions like GROW with SAP are making advanced ERP capabilities available to companies of any size.
This direction is fully aligned with what we observe: modern ERP is no longer a privilege of large enterprises — it's a practical tool for fast-growing companies of any size.
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