Business software company Erply is winning worldwide competitions and attracting venture capitalists

Erply Retail Software CEO Kris Hiiemaa

Erply breaks out of Estonia through Internet

No one anticipated the new Estonian IT success story that is happening right now. Business software company Erply is winning worldwide competitions and attracting venture capitalists.

Erply could recently be called a startup but looking at it now you can’t even tell they’ve just started up. The company has 700 paying customers and together with the free version users over 3000 businesses have trusted Erply’s servers for data storage.

Erply is a large-scale undertaking – the London-based CEO Kristjan Hiiemaa could only be reached a few days after arriving in San Francisco. They’re currently undergoing preparations to expand the business into the US. That means finding a suitable server center since US law requires collected data to be stored locally.

What is Erply?

In the light of that, it is quite embarrassing that most people have no idea what Erply is. Erply is a web-based business solution that offers purchasing, marketing, and inventory management.

ERP aka Enterprise Resource Planning should say everything to our readers. ERP is important for business planning and accounting records. The purpose of the software is to help optimize how a business operates and to avoid so-called ‘work mishaps’.

For example, Kristjan tells us, a furniture store finds a bunch of unsold chairs in the warehouse and puts them on sale with the lowest possible discount price. This info, therefore, has to reach the purchasing manager or he might accidentally think the chairs are selling successfully and order more. Because the chairs were sold almost at the buying price the selling of the new shipment with a price to cover all the costs would be impossible. Good internal communication and the right management software for that purpose will make these kinds of mishaps a thing of the past.

They’re not only web-based. Erply also makes applications, like the iPad version, which enable the sales for businesses with a smaller assortment, street vendors for example. And it also enables a quick inventory inspection.
Similar iPhone and Android applications have been considered too. Erply is a specialized company whose goal is to provide suitable software to a lot of businesses not offer unique solutions to every single client. This allows saving money – the packages are thoroughly tested. Because add-ons (e.g., plug-ins), which would serve only a few specific clients, are not used the system updates and information exchange are fast and controlled.

We went to a local shopping center with the Estonian CEO Martti Paju and stepped into four stores. A hobby shop’s point of sale system was updated in a few minutes to show the new user interface suitable for touchscreens. After taking photos of the working system the downgrading to the old version took only a few more minutes.

Therefore an advantage for a web-based solution is centralized and quick managing. The same system can be used for one small store or for a whole chain. You can sell anything from model airplanes in a hobby shop, clothes in a retail store to wines in bottle shops. The software can be integrated with widespread freeware e-commerce solutions but also includes their own simple online shop solution.

Everything is easy with centralized inventory control – online shops have no need for a separate warehouse. At the same time, bigger chains would need warehouses for every shop and that too is covered. Urmo Aava sells car equipment using Erply’s software. All products have unique properties so the spare parts page shows also possible counterparts.

The software was written in a year

Erply is more suitable for small or medium businesses since it doesn’t offer custom solutions for all clients. An Estonian clothes retailer Marat recently switched from Axapta to Erply and their monthly software bill of 50 000 kroons ($4300) went down to 15 000 kroons ($1300). The company’s systems operating in three countries took two weeks to switch. Overproduction lasts only for a couple of hours per store and software reduces closing times – Erply promises inventory taking without closing the store, you’ll need a barcode scanner and a few quiet moments when there are fewer customers. Also, the online shop and the brick-and-mortar shop can operate with the same staff and together – employees offer their services to customers in the shop and if there aren’t any they can survey online orders and prepare shipments.

ERP software’s purpose should be a complete overview of the state of a business which Erply promises to achieve. According to them, a lot of solutions like the Axapta process don’t show the final conclusion from the business’s current overview.

Erply’s software was written in a year, and their first customer relations are as old as that. During that time the main parts were completed and integrated, some components are older. The people have a long experience in this field: Martti Paju has been doing similar work for a long time but not for web-based solutions.

Both Martti and Kristjan have worked for Intral before, Kristjan initially studied political science and only later economics.

Erply is a winner of 2009 Seedcamp (TechCrunch’s European competition for internet start-ups) receiving a $50 000 investment (in exchange for a 5-10% share of the company). Tech-Crunch wrote in March about Erply getting a $2 million investment, highlighting their Estonian origin and hoping that Erply does the same for business software what Skype did for telecom – affordability, and accessibility. The company’s headquarters is a house situated in a beautiful part of Tallinn under the pine trees of Nõmme. But Kristjan Hiiemaa doesn’t rule out moving into an air-conditioned office building for the little house has become too small for the business – the yard is full of cars. They also have an office in the center.

Erply is focused on selling a whole product. If questions can be answered within the limits of the software then there’s no need to create anything in addition for a client. The system is developed continuously – if many customers ask for a feature it is written and made available to everyone for no extra fee. This is a different approach from traditional software providers who ask for money to develop extra features. In contrast, Erply is a standard solution which is expanding rapidly. Most development requests are solved thanks to good customer support since the business processes are usually similar.

Often, thorough explanations, guides or adding a few column fields are enough to ensure customer satisfaction. To integrate outside applications you can use Erply’s API. A longer description of its possibilities is available at

Doing tricks for different countries

Erply provides the customer with a report generator that makes it easy to produce reports from entered data. Usually, the clients don’t even want to create reports themselves but have Erply’s customer support do it. “Imagine you are calling Erply’s customer support because you want a new report. By the end of the call the report is done and usable,” describes Martti the process.

Besides the straightforward software side, Erply also provides consultations. Being as close as possible to clients they can offer good advice on how to manage a business better. Business Intelligence package helps clients to better organize their business procedures, e.g. how to take inventory more efficiently, manage and analyze purchasing, manage inventory, maintain price matrix, etc.

“CEOs often wonder how to be more efficient, how to get most from IT-solutions to save on the cost of labor. We can answer these questions adequately on the basis of Erply’s product and share our good experiences,” tells Martti. A large-scale operation has its tricks. Some countries (Latvia, Sweden, Greece, etc.) use a tax office managed fiscal printer which needs an extra module. Different countries can have special demands for receipt printers, scales, and other equipment.

The first thing Erply did after breaking out of the Estonian market was hiring a top law firm in London. In some countries, this is the only way to get things done. It’s not cheap but makes business considerably easier.

Business software is a product in which you do business with, legal systems are different and that has to be taken into consideration. Economy and business operate much the same way in different countries but laws are different. Usually, foreign markets are entered with a partner who feels comfortable there. The software has already been translated into eight languages.

Design of a planned product is very important for a startup company. Oliver Reitalu’s collaboration with that is proudly mentioned by Kristjan. Reitalu has years of experience with Skype’s interface design. Developments have to be made in very different systems: Java runs on the servers’ lower levels, the separate XML-based solution is created for business logic. Percona Server (branched out from MySQL) is used as a database since suits solutions which require speediness. Support for Oracle databases also exists, some bigger clients have requested that. FreeBSD has been used as the server OS but lately, they’re more orientated on Linux.

Erply’s server centers are in Linxtelecom and Switzerland – they duplicate each other. Dell servers are used and they are bought in threes or fours every month or so. Besides duplicating server centers, customers have an alternative access to backups. The company promises contractually 96,7% SLA for their clients.

Security is the main concern for business software

Erply uses HTTPS protocol for their services and also 256bit encryption that creates a secure information channel between the user’s computer and the server. According to Martti, a client isn’t identified by their company name when providing helpdesk services but by a special code. That code is also needed to log in, besides a username and a password. But what happens when something goes wrong with the service provider? Martti says that Erply’s client has an option to always export entered data into Excel’s supported formats (XLS, CSV, TXT). Customer support helps every client to export data or get an export report summaries. Therefore, fearful clients can make an extra archive of their files.

Businesses with one office always live with a fear of losing important information in a fire or burglary. At the same time, modern solutions like Google Gears and corresponding HTML5 help sales happen offline.

Google is important to Erply – the company uses their email service (same as Gmail but the Gmail logo is replaced with Erply’s). And Google’s web-based office software proves to be sufficient. Kristjan himself has only used a Mac for a few weeks, though most jobs are done on Windows of course.

Martti complains that despite Microsoft’s tries to not repeat the same mistakes in Windows 7 as in Vista, a lot of point of sale software doesn’t work as expected with Windows 7. On the other hand, Linux has a lot of potential as an OS for points of sale. Erply’s offices have sample points of sales up and running, including a touch screen cash register which hasn’t reached our shores yet. As is the norm for point of sale providers, Erply too sells different checkout hardware and suitable checkout computers.

All software has to be tested on hardware and it’s good to offer compatible products.

Author: Madis Veskimeister
Translated by Ingrid Algma


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