These business softwares are non-negotiable for SMEs

Small and medium-sized enterprises (SMEs) are the backbone of the economy – flexible, innovative, and often strong in their niche. But with growing competition and increasing digitalization, one thing is becoming more and more clear: without the right business software, nothing runs smoothly anymore.

But is business software really essential for SMEs – that is, for a company with perhaps 20 to 250 employees, limited IT resources, and a desire for efficiency and growth?

In this article, we provide an overview of the most important categories of business software that every SME should consider – regardless of industry or business model.

ERP System – The circulatory system of a company

The first category of business software is the so-called ERP systems. ERP stands for Enterprise Resource Planning, meaning the strategic deployment of resources. Resources are not just the raw materials that go into your product; they are used in all processes within an SME. Whether it's money in financial planning, warehouse space in purchasing, raw materials in production, or personnel in HR – resources are essential everywhere.

Why is it important?

An ERP system is an integral part of your business software stack for many reasons. Firstly, it helps you eliminate Excel chaos, which is a common issue in SMEs. Instead of a file called 230422_Financial_Planning_Production_March_2024_v84_Final_Final.xlsx, you now have a single business software platform that serves as your single source of truth. Another argument in favor of ERP systems is that they provide on-demand access to key business metrics – like your current inventory. Moreover, many ERP solutions now include artificial intelligence, which supports your daily tasks as a manager through simple analyses or actionable recommendations.

Popular ERP Systems

• SAP Business One
• Weclapp
• Lexware
• Microsoft Dynamics 365 Business Central

CRM System – Keep all your customers in sight

The second essential business software for SMEs is a CRM system (Customer Relationship Management). This system helps store all customer data in one central place. It is not only crucial for key sales aspects like key account management, but also for marketing and support.

Why is it important?

A CRM system is especially important for SMEs because it brings structure to otherwise unstructured processes and enables scalable growth. In SMEs, customer relationships are among the most valuable resources. A CRM system helps strengthen these relationships by ensuring regular follow-ups and reliably providing important customer data. This type of business software also enables automated sales processes that scale with your company. Leads and potential sales opportunities, along with their status, remain well-organized and easy to follow for all employees throughout the entire process.

Popular CRM Tools

• HubSpot
• Pipedrive
• Salesforce
• Zoho CRM

Accounting & Finance – Non-negotiable

When the tax office comes knocking, your finances need to be in order. Even if you have a tax advisor, you should still consider this type of business software. Clean and accessible accounting can save your SME a lot of time and money.

Why is it important?

If your accounting tool is Excel, you should reconsider. Several court rulings have found that Excel is not suitable for financial accounting because the files can easily be manipulated. A proper business software solution is not only important for tax compliance but also brings many advantages to your SME. It automates invoice and receipt processing, saving valuable working time. It also simplifies cash flow planning by providing real-time access to your balance sheet and profit and loss statements. You can also track your current tax liabilities (e.g., VAT). If you work with a tax advisor, they will thank you for using proper software, as it provides structured access to your financial data instead of piles of documents.

Popular Accounting Tools

• DATEV
• Lexoffice
• SevDesk
• FastBill

HR Software – Manage employees digitally

Whether it’s time tracking, payroll, or applicant management – HR is becoming increasingly important for SMEs. This software is closely tied to many other parts of your business, so it’s essential to choose a solution that fits your needs.

Why is it important?

The main reason HR software is important is that it drastically reduces paperwork. In many trades and manufacturing SMEs, time tracking with pen and paper is still common. The downside: hard to analyze, easy to manipulate, and requires manual data entry. HR software solves all of these issues with minimal effort. Hiring has become harder for SMEs, and one reason is that the new generation expects a digital application process – even in century-old companies. HR software can help modernize this process. Lastly, HR systems save time through structured processes for onboarding and employee management.

Popular HR Software

• Personio
• Kenji
• HRworks
• HeavenHR

Project Management Software – Organize teamwork

Many SMEs work in project-based settings – whether in trades, agencies, or mechanical engineering. Project management software ensures that tasks aren’t forgotten and that teams stay focused.

Why is it important?

This software ensures clear task assignments and eliminates confusion over who should be doing what. It also helps with time and resource tracking. Time-critical tasks can be flagged and prioritized. Ultimately, it increases team transparency – everyone knows who is working on what at any given time. If questions arise, the responsible person can be quickly identified and consulted.

Popular Project Management Tools

• Asana
• Trello
• ClickUp
• Jira

Knowledge Management Software – Secure your know-how

In many SMEs, critical knowledge is concentrated in a few people's heads. Knowledge management software helps preserve this know-how and make it accessible – particularly important for onboarding, training, and internal communication.

Why is it important?

Knowledge management ensures that important information doesn’t disappear when individuals leave the company. It enables fast, centralized access to internal processes, workflows, and documentation – saving time, avoiding repeated questions, and increasing everyday efficiency. Additionally, a transparent approach to knowledge sharing supports a collaborative culture, where everyone benefits from shared insights.

Popular Knowledge Management Tools

• Breev
• Notion
• SharePoint
• Confluence

IT Security – A necessity, not a luxury

With increasing digitalization come increasing risks. SMEs are often prime targets for cyberattacks – making strong IT security infrastructure all the more important. Software that detects vulnerabilities and ensures compliance with security policies can be a major asset.

Why is it important?

It protects against data loss and cybercrime, which can disrupt operations and cause severe financial damage. It also ensures compliance with regulations like the General Data Protection Regulation (GDPR). Companies are legally required to protect personal data – violations can lead to hefty fines and long-term reputational damage. Finally, protecting sensitive information like customer data and trade secrets builds trust and boosts your competitive edge. IT security isn’t optional – it’s a prerequisite for sustainable business success, even in SMEs.

Popular Security Tools

• Antivirus & Endpoint Protection (e.g., G DATA, Bitdefender)
• Backup solutions (Veeam, Acronis)
• GDPR-compliant cloud solutions (e.g., Nextcloud)

Conclusion – Fewer tools, but the right ones

For the "average SME," it's not about implementing as many tools as possible – but rather choosing the right business software that fits your workflows and truly adds value.

A solid ERP and CRM system, combined with reliable accounting, secure IT, and clear project and knowledge management processes, create a stable foundation for sustainable growth.