This article first appeared on the Eagle Waves Radio website following my guest appearance on their Eagle Business Show. The article was also featured in another blog by Clayton Moulynox who has coined the term #Accloudants to describe “Cloud Accountants” !
Every day of the week many of us use technology in our personal routines to make our lives easier. Smart phones, Smart TVs, internet banking, Facebook, GPS and parking sensors in our cars…the list goes on and on. So why should the way we run our businesses be any different?
It shouldn’t, but having been advising businesses now for almost 15 years I still see owners of SMEs going about their daily affairs using technology and/or manual systems that are either costly to run, hard to use or simply don’t do what they were intended to do.
And why? There are many reasons but I find the overriding factors to be firstly a lack of knowledge of the new business technology available and secondly the fear of change.
A recent study commissioned by PayPal Australia found that “Three in five SMEs claim that they could run their business more efficiently if they knew more about the digital tools and technology innovation available”. So 60% of SME owners ‘get’ that technology will help them but often don’t know where to go to find this information. If you are one of these SME owners, this blog will tell you what you need to know!
Part of what I find exciting about this new era of technology available for SMEs is that you don’t have to be an IT expert to understand them. They have been built to be user friendly at all levels and to integrate with other programs easily and seamlessly. But don’t be fooled, just because these programs are simple to use doesn’t mean their functionality is lacking. These tools are best of breed in many circumstances and put traditional programs to shame.
Where do you find most, if not all of this technology? Quite simply, in a web browser. Or as has come to be the catchphrase, in “The Cloud”. Accounting programs (my favourite is Xero), POS, Inventory, CRM, Job Management, E-Commerce, Payroll, Budgeting, Reporting, all talking to one another via the web because they are built using an open API (Application Programming Interface).
And the beauty of this cloud architecture is as you grow these applications are scalable and will grow with you in terms of their functionality and cost.
So how will using this technology help you to run a ‘smarter business’? What does a ‘smarter business’ look like?
Having transitioned my own business to use web based applications I can say with complete confidence that a smarter business is one which:-
- Connects with its clients and customers easily and efficiently
- Allows its owners and team members to focus on delivering its goods and/or services efficiently and in a valued way
- Has streamlined processes, much of which are automated or require very little thinking to carry out and their cost to administer is minimised
- Has a better allocation of the business’ resources
- Captures valuable data automatically
- Its owners use this real time information to make effective business decisions
And when you run a ‘smarter business’ what does this all translate into? Quite simply, more profit for less effort. And more profit means (usually) more money in the bank. More money in the bank and less effort means SME owners will enjoy a higher standard of living AND/OR they will reinvest this time and money back into their business to grow it further which benefits not only themselves in the long run but also benefits the economy J It’s a win/win for all of society !
But what is the cost of not embracing this technology in your business? Whilst you may save some money initially, think about this scenario:-
- You employ just half a staff member more than required to carry out purely back end admin work at a cost of say $25,000 per annum (because you have them still doing manual bank reconciliations and data entry)
- Combine this with under pricing your best selling widget (of which you sell 10,000 units each year) by 10% with a sale price of $40 as opposed $44 because your operating system doesn’t easily record the costs relating to the provision of this widget nor does it record accurately that it’s your best seller.
Result? You have thrown away $65,000 in one year alone.
Scary isn’t it.
Even scarier when you consider that modern accountants like me and my team at EFS Strategic are advising your competitors on a daily basis on how to implement this technology and run their business smarter. Then advising them on how to invest this saved $65,000 back into their business to be able to sell the same widget you sell with a greater profit margin. And then because they are smart business operators they use some of this $65,000 saving on advertising to promote this widget better to your customers so maybe you won’t even sell 10,000 widgets next year.
Now that I have painted the grim reality of remaining complacent, let me say that the fear of change is easily overcome when business owners see not only how easy it is to operate these systems, but also how easy it is to transition to them. For a relatively small investment compared to what you may spend on implementing a “bells and whistles” enterprise grade solution you get a full service implementation and training process, coupled with a real time support system, which is delivered in most cases by an adviser that already uses this same technology in their own business and understands the importance of making the transition as smooth as possible.
Could you go it alone and implement it yourself? Yes, you probably could but is this running a smarter business? No its not given that for an investment which is guaranteed to pay itself back in year one you can literally be up and running with a new cutting edge system in less than a week and it will work the way it is designed to first time.
Finally, what we see today is just the tip of the iceberg. The next wave of technology that is coming makes today’s offerings look like a Sony Walkman compared to an iPod. Why does all of this get me excited? The core purpose of my business is to make my client’s lives easier. All of this technology that is available allows me to deliver on this purpose and ensure my clients run their businesses smarter.