Cloud technology and SME success
AUTHOR | Colin Timmis, Head of Accounting South Africa, Xero
In South Africa, small businesses employ the most workers and contribute the most to GDP. Their prosperity directly corresponds to the country’s. But they are only as good as their tools – and cloud technology is an increasingly important tool. Here’s why
Chances are the rise of cloud computing probably hasn’t escaped your notice. Software as a Service application allows you to sign in from any connected device with no data loss and superior scalability; Platform as a Service tools enable you to develop applications easily; Infrastructure as a Service removes the need to invest in hardware – freeing up resources and space for the business. We’re entering an age where cloud technology is no longer optional, but essential.
Xero’s 2018 Technology Adoption Report highlights this. It reveals that 44% are already using cloud tools and enjoying a great number of benefits. Some 70% say they’re using this technology to save time – claiming that overall, they claw back more than 10 hours a week. When you have 10 hours a week more than your competitors, you have more time to prepare, focus on important tasks, and develop your strategy across crucial areas.
A further 52% go even further, claiming that cloud technology helps them save money. This obviously makes a serious difference to businesses in terms of having a deeper pool of resources, but it also puts a company in a better position when it comes to scaling up – and allows it to demonstrate a healthier cash flow to investors, partners, and shareholders.
Indeed, cloud technology has a prominent part to play in the future of South African small business economy: overall, 58% of businesses say it features in their business plans for 2018.
Small businesses are particularly attracted by the opportunity to improve or eliminate time-consuming administrative tasks and processes. Overall, 49% have said that cloud automation has boosted their overall efficiency – particularly when it comes to tasks such as pursuing invoices and getting paid on time. The advent of apps such as GoCardless, eWay and Stripe has brought concepts such as ‘smart payments’ (triggered when money arrives in your customer’s account) to the fore. These tools require far less involvement from the business, and facilitate faster transactions, greater security, and healthy, reliable cash flow.
But the availability of real-time data has been especially important for these respondents. Being able to access business-critical information from anywhere, and on any device, has made collaborating with colleagues and extracting insights much easier: some 38% have even suggested that it improves business continuity.
Democratising data in the worldwide workplace
In 2018, you don’t have to be big to benefit from big data. The information that was once the exclusive domain of larger providers are now available to a much wider corporate audience. Thanks to cloud technology, quality, breadth, depth, and availability of data are improving quickly, and costs are falling at the same time – democratising insights in an affordable, easy-to-consume way.
For instance, Spotlight Reporting allows CFOs and accountants to supply truly globalised reports, forecasts, and more to business owners in whatever regions an organisation operates in. This means that wherever your team is, it’s singing from the same hymn book.
Indeed, a crucial benefit of cloud technology is the way it transcends geographical borders. The early days of a business – where finding office space to lease or buy – can be the most challenging. Every penny you spend is a penny that could be spent elsewhere, but it’s equally important that your office is in a location that’s accessible to your employees, attractive to your clientele, and conducive to effective collaboration.
While you’re searching for your perfect workplace, many employees will prefer to work remotely – and indeed, consultants such as accountants (who work across multiple clients) may prefer to do so long after you’ve settled into your new space. Some 33% of survey respondents are especially pleased that cloud technology has facilitated remote working – allowing anyone, from anywhere, to access the information they need to discharge their job duties.
That said, the onward march of cloud technology is not quite as fast as it could be. Many small businesses concede that their existing setup isn’t quite up to scratch. Overall, 63% believe that reviewing their IT infrastructure is a high or medium priority, and 45% acknowledge that they could be doing more in terms of tech adoption. Of our respondents, 52% claim they’re just keeping up.
Though many have made great efforts to integrate cloud tools into their everyday working experience, there is clearly still work to do. Certainly, there are barriers that they can’t overcome on their own: the lack of connectivity is a problem for 41% of South African businesses, and if you’re outside a major city, poor Internet service can hamper even the most determined attempts to introduce new technology to your company. The Government needs to provide incentives to drive adoption in 2018 to improve economic performance.
Nonetheless, one of the principal advantages of the cloud is that it extends connectivity beyond the workplace. The faster you adopt, the faster you’ll benefit.
Reluctance to embrace new technologies is understandable. Upgrading processes, software, and infrastructure can take time, effort, and money – and in a struggling economy, all three are precious resources. But clinging on to the systems and tools of yesteryear is worse. The longer it takes to make technology a priority, the wider the competitive gap between you and your nearest rivals. To embrace the cloud is to embrace profit, productivity, and growth.
SOURCE | https://www.accountancysa.org.za