SMBs typically buy off-the-shelf software for operations because custom development costs more than small businesses can sustain long-term. But what happens when operations grow and develop characteristics the software wasn’t designed to handle?
All business outgrow “standard software”
Businesses typically start with inventory management tools that match their initial operational scale. More often than not, though, software that handles operations well at the start becomes limiting when the business grows in complexity. As businesses add more products and SKUs, additional sales channels or fulfillment locations, the standard features that worked for simple processes don’t accommodate the specific requirements that develop as operations mature.
Traditionally, when software stopped fitting operations well, businesses accepted the inefficiency or moved to enterprise platforms. While enterprise software can handle more demanding ops, it requires implementation budgets that most SMBs can’t justify.
Big companies can negotiate special terms or fund internal development, but smaller businesses lack both negotiating leverage and development budgets.
AI has opened the door to a new way to solve this constraint. Rather than forcing businesses to choose between limited standard software and expensive enterprise platforms, we’re now building systems that can extend as operations require it.
Extensible software is the new model
The future of ops systems separates what software does out of the box from what it can do when you need it to. Most businesses share common workflows, but every business develops operational specifics as it grows. Extensible software accommodates both without forcing you to choose between standard limitations and custom rebuilds.
For SMBs, this change is extraordinarily important. Operational capabilities that once required enterprise budgets and dedicated development teams are becoming accessible to businesses at any scale. Software can be something businesses shape to match their operations rather than a fixed constraint they work around.
At Katana, we’ve had an open API since the very start – and we have real examples of the impact this flexibility can have. One of our customers connected Katana to Prospect CRM through API integration, automating customer data and sales history transfers between platforms. The business doubled sales and improved customer service following implementation. This kind of results can now become achievable to any business.
Current developments accelerating the change
AI agents accessing operational data have increased pressure on software vendors regarding API policies. Agents need standardized data access to execute tasks like inventory verification or automated reordering.
Some vendors are responding by restricting access. SAP restricted third-party AI from their platform earlier this year, requiring customers to use SAP’s AI assistant exclusively. For SMBs running SAP Business One or Business ByDesign, this removed the option to use AI tools they’d already selected.
The decision protects SAP’s AI product but reveals something important about platform economics. Large legacy platforms built their value on feature breadth – doing everything so you don’t need other tools. Opening APIs to let customers choose their own AI systems undermines that model. It’s a rational business decision that creates an asymmetric opportunity for everyone they’ve locked in.
The alternative approach maintains open API access and lets customers determine which AI tools work with their data. As AI becomes more central to operations, businesses increasingly evaluate whether their software allows them to build what they need or restricts them to what the vendor permits.
How we’re building for this future
At Katana, we’re building beyond API access. We’re working toward becoming a platform where solution engineers, implementation partners, and customers themselves can extend the system to build the capabilities their operations need.
The goal is developing an extensibility layer with custom fields, community-built solutions, and the ability for businesses to shape their operational software as requirements evolve. The platform grows beyond what we build ourselves. Companies build on Katana rather than just using it, adding what their specific operations require as they scale.
What’s ahead for SMBs
Your ability to build custom workflows, integrate new tools, and adapt to market changes becomes independent of how many people you employ or what your software budget allows. The companies that capitalize on this early gain advantages that become harder to match as their operations and software evolve together. A brand that can adapt its software in days rather than quarters can test new fulfillment models, enter new markets, and respond to supply chain changes faster and better than competitors.
The gap between businesses with extensible software and those locked into fixed platforms will widen as AI development accelerates. What you can build is no longer determined by your budget or team size – it’s determined by whether your software lets you build it.
