Do you really know what’s going on in your business? Are you able to take its temperature whenever you wish; see where the money is coming in and going out, how your customers and suppliers are faring? Can you tell at a glance what you’ve got in stock (either not enough or too much)?
Time was, you’d expect to be regularly paying people good money to collate and supply such information. Today, you can get software that does these sorts of tasks for you, in real time, automatically. It used to be made just for large-scale enterprises, but not anymore. Smaller businesses can now take advantage of the latest developments in business management software, for a relatively modest investment which can recoup significant costs and help them grow. All they have to do is be prepared to try something new, and ask the right questions in order to get what they need.
FEELING THE PAIN
Unless you have specific expansion plans, and know that to implement them you need to work smarter, you may only realise that you require something to assist in managing your business when things start to go wrong. If you’re spending too much and not making enough, then that’s a "pain point”, according to Peter Dickinson, Executive Director of Greentree (www.greentree.com), producer of financial and business management software. "If you’ve got a headache, you want something to make it disappear,” he says. "Our customers may not understand what all the potential solution ideas are, but they generally have a good idea of what their headache feels like.”
Relieving that headache can be tricky (and costly) if you’re not sure about the cause. A software vendor will only be able to help so much, if the customer can’t specify just what they want the software to do. Jane Mattsen, Business Manager for software developer Abel (www.abelsoftware.com), says the best software installations they’ve done have been for companies that already know their processes inside and out. "We’ve found if they know their processes, we’re able to match our solution with them,” she says. "If they don’t, you’ve got the big mess.”
To understand your business processes, and where they might be needing improvement, you need to ask yourself a few searching questions. Write down what you want your business to achieve, then if you’re sure of your objectives, ask whether your current processes are actually working towards attaining them. If those processes are inefficient or expensive, management software could help by automating the tedious and time-consuming but necessary steps – particularly in documentation. Think also about your longer-term goals: will this software (whatever it is) just take away the headache now, or will it adapt to growing needs later? Conversely, will it shrink if things get tougher? Is it just entering data and doing transactions, or does it have the ability to really help you manage your business? Does it allow you to easily connect in other stakeholders to your system – whether that’s staff, customers or suppliers? And finally, can it supply the data you need, wherever and whenever you need it?
Those are the sort of questions you need to put to a software vendor or developer, and don’t let yourself be blinded by science. "The client needs to know enough to understand what they are getting what they should be getting, and to a large degree that’s part of commercial trust,” says Matthew Roscoe, a director of Foundation Business Software (www.fbsl.co.nz). "You should be going right back to basics when you deal with a vendor in IT and saying ‘give me a list of verbal referrals, let me talk to other people like me who are satisfied with what you do’.”
One of the most off-putting factors when shopping for computer solutions is the jargon that gets thrown at you. If a software vendor or developer starts throwing a bunch of acronyms at you, tell them: "Speak English or I’ll go elsewhere”.
"We have to be able to talk to you in your terms, and if we can’t, you shouldn’t be dealing with us,” says Roscoe.
For a basic guide to common business technology acronyms, see the boxout on page 24. Remember: it’s what the software does for you that counts, and for most businesses, that comes down to automating and integrating processes. Let’s take a look at some of the solutions now on offer.
Software as a service (SaaS), also known as ‘software on demand’, is software that is deployed over the internet and/or run behind a firewall on a local area network or personal computer. It is generally supplied under licence; ie: the user pays a flat or regular fee to use it (although increasingly, SaaS is also being made available free via open source or Creative Commons licensing). Ideally it should be scalable in its features according to the customer’s needs. Any updates should be done automatically, and required changes should not be a major, expensive undertaking. However, some of the developers we spoke to think that the SaaS model is somewhat limited.
"I think the SaaS model has got some great legs to it in particular situations,” says Greentree’s Peter Dickinson. "The one thing I’m very cautious about is, if you change your mind, you have no options. You buy another product and then go through that whole rip-and-replace cost.”
While some of Greentree’s customers run its software in a SaaS environment – deploying specific functions, often via hosted or cloud-based services – it habitually promotes itself as fully-featured business process management, or BPM, software (see jargon boxout). Its product suites include financial management, supply chain & distribution, job cost management, customer relationship management (CRM – see jargon boxout) and business intelligence.
"We scale dramatically,” says Dickinson. "We’ve got customers that are relatively small, through to billion-dollar revenue companies. We’ve looked to put in a pricing model which is equally scalable, so people can actually start small and build. We tend to get smaller companies coming onto Greentree where they’ve got really clear growth ambitions, and they see Greentree as a vehicle where they can start off with the one system and continue to grow it, rather than having to change systems along the way, which is always an invasive process.”
As we mentioned before, automation that software can provide will make a huge difference to businesses, performing repetitive but necessary tasks that humans dislike and require paying to do. Dickinson cites the story of an Australian company that services air conditioning systems in large buildings. Health regulations require regular testing of these systems, and keeping track of those tests used to require long hours for a manager filling out spreadsheets. Greentree runs the whole process, sending reminders of when tests need to be carried out, notifying when the job is done, and issuing reports of the tests. It also advises the owner of the building by email that their air-con has been tested. This can be especially useful when doing accounts for services rendered, and setting it up took about five minutes. This kind of customer service is what people expect today, and there’s plenty of competition for the business of those who lag behind.
"I think particularly in the service industries these days, you’ve got to have great attitude combined with slick systems,” Dickinson says. "Then in a SME you’re asking people to do a whole variety of things. And the market expectation today is so high – people don’t expect cracks, they don’t expect stuff-ups.”
Saving time spent poring over bits of paper is a boon for any business. FBSL’s Matthew Roscoe has a customer who every week has to analyse replicated data from a spreadsheet supplied by a client. Being able to import and analyse this data on one screen has saved the business about 10 man hours a week.
FBSL is a vendor of FileMaker, a cross-platform relational database application. This means it works on both Windows and Mac platforms, and enables the user to match up particular data sets, eg: types of transactions can be grouped for such statistics as where and when they were made, providing valuable business intelligence.
FLEXING TO GROW
Growing SMEs want flexibility in any computer system, given the capital expenditure it may require and the limits of their resources. Developers who want SME business will likely take this need into account. Roscoe says ‘switches’ can be built into a computer system to turn functions on and off if required, but other developers are opting for a modular approach – a ‘plug and play’ concept where extra functions can be tacked onto the central system like accessories. Another option is to develop a business system in stages, according to budget.
Abel ERP software (see jargon boxout) is designed for SMEs with growth in mind. "As we take on clients we’ve found that as they grow, we grow,” says Jane Mattsen. "We can turn more functionality on – there’s nothing worse than getting a big system and trying to cram it into a small SME. It just does not work because the fact is, you need so many people to drive it.”
Abel has quite a few users in the manufacturing sector, where various processes need to be tracked, especially with multiple suppliers of materials. It offers financial, jobbing and distribution management, as well as CRM tools. It also serves as a central repository for information, so everything is traceable.
Abel charges a monthly fee per user of its software, and that fee is the same regardless of how many features are enabled. It’s installed on-premise and runs by itself; the user doesn’t have to touch it, removing the need to employ an IT specialist.
Companies using software that automates financial processes also often don’t need book-keepers, and accountants usually don’t have to be brought in except for auditing or specific consultancy work. But intelligent ERP software can do more than just process the invoices and receipts.
"Most SMEs that are not running good software don’t know which bit is making the profit and which is making the loss,” says Abel’s Managing Director, Allan Baird. "And that is the one thing we offer very clearly – not only in your small part of the business, but if there’s a group of SMEs it’ll do the same thing.”
Of course, the biggest impact being made by software in businesses is in the field of communications. More businesses are switching to VoIP telephony, not only to save on call costs, but because it can integrate mobile and desk devices, and even run on a PC.
Asterisk (www.asterisk.org) is free, open-source PABX software that includes many features available in proprietary PBX systems, including voice mail, conference calling, interactive voice response (phone menus) and automatic call distribution. Conversant (www.conversant.co.nz) is one company that offers a full installation package, including phone hardware, as a hosted service. But the company’s Managing Director, Cameron Beattie, is also an evangelist for open source software.
"Usually the implementation costs of any complex software far outweigh the licensing costs,” he says. "Open source software gives you a degree of freedom because you have access to the source code. It means you are not tied in to a particular vendor – you’re able to escape if you wish.”
The magic word ‘free’, in the case of software like Asterisk, is music to any manager’s ears, and there is open source software available to do many tasks that branded proprietary software can do, eg: Open Office (www.openoffice.org.nz), an alternative to Microsoft Office. There’s also an extensive range of commercial open source software that in most cases is cheaper than the mainstream product. Many of these products will run happily on Windows, so there’s no need to bone up on the Linux system. For cash-strapped businesses that find mainstream brands of software too costly, an open source alternative may be just a Google search away.
Microsoft, naturally, owes a large part of its global success to its familiarity, its comprehensive range of packages, and its reputation for reliability (those monthly Patch Tuesdays notwithstanding). Coming later this year (release date unspecified) is Windows Small Business Server 2011, designed and priced for small businesses with up to 75 users and promising "enterprise-class server technology in an affordable, all-in-one solution”. Microsoft is also promising a hosted/cloud version of its new Lync unified communications offering, suitable for SMEs, in the third quarter of 2011.
But developers warn that big-name, proprietary-brand products do have their drawbacks, even though they come out of the box ready to use. "You come back to basics,” says Matthew Roscoe. "Is it going to do what I want it to do and if it’s a packaged product, do I understand that modifying it will either be impossible, difficult or extremely expensive?”
We’ve already discussed mobile devices (see October Start-Up), and ready access to data, remotely and on the move, is driving major developments in business software. While the recession has forced most businesses to sit on their wallets, the need to keep pace is forcing a return to development strategies. "We’re seeing a certain number of businesses who are getting to the stage where they’re saying ’we have to change, we just can’t wait any longer’,” says Roscoe. "Part of that is that they’re seeing their competitors are starting to move, and we know that part of that is this mobile style of computing.”
Ubiquity, he says, is being re-defined in the business marketplace. The evolution of ubiquity, which started with the Yellow Pages then shifted to Google, is now focused on where the user is at any given time. Most mobile devices now have a built-in GPS unit, and the user is increasingly asked "What is your location?”. Social media like Foursquare and Facebook Places are squarely aimed at the mobile user. Advertising that reacts to a person’s mobile device, pointing them towards shops stocking items they’re known to be interested in, will soon be commonplace. Gartner research predicts that media tablets like the iPad will have penetrated 80% of businesses by 2013. Business applications for tablets and mobile phones are already available in their thousands, but the software is still catching up with demand, especially in the field of data entry. This creates problems because entering data still usually requires a keyboard. The ‘virtual keyboard’ that can be enabled on a tablet not only takes up half the screen; it’s clumsy and frustrating to use. One possible answer is a simple interface with built-in templates for basic data entry. In fact, FBSL has already designed such an interface. It works on an iPod touch, allowing the user to transmit data wirelessly back to the office server. "That ability to update data easily and instantly is key,” Roscoe says.
UP IN THE CLOUD
Coupled with this new mobility is the maturity of cloud-based software applications, which offer the sort of resources previously available only to large-scale enterprises, for a fraction of the cost.
One such ERP system, still in its beta testing stage but due for release very soon, is Letstrade (www.letstrade.com). It was developed by businesspeople who were frustrated at not being able to find software specifically aimed at trading for SMEs – their buying and selling, and their collaboration with their customers and suppliers and their supply chain. Accounting software can crunch the numbers, but it can’t tell you not to use a particular supplier because they already owe money. It can’t assess your financial performance (backwards and forwards). Letstrade does this, and also lets you communicate in real time with customers and suppliers using electronic data interchange (EDI – see jargon boxout). It connects and sends transactions to the Xero accounting application, monitors profitability, and manages quotations, sales orders, shipping and invoices. In short, Letstrade director Peter Montgomery says, it keeps you in touch with "the day-to-day critical information that tells you if you’re going to succeed or fail”.
Dozens of firms are involved in the beta testing of Letstrade, which will be signed off before any pricing is announced. Still under wraps is another feature called Commercial Networking, which Montgomery will only say "will allow people to work in a different way with their customers and suppliers”. Expect an announcement in a month or so.
"It drives information to the user,” Montgomery says. "They don’t have to drill for it. We designed it so it would tell you, and it’s interactive in a way. It’s not customisable in terms of the interface, but you’ve got options you can select which will help you do different things differently. What we’ve tried to do is capture, for trading entities, most of the things they really need first off, so it would suit a broad swath of businesses.”
DARE TO BE DIFFERENT
For small businesses wanting to grow (or in some cases, wanting to survive), working smarter will mean looking to technology that not only reduces costs, but delivers a competitive edge by supplying vital information as and when it’s required. To just tick along and say "But we’ve always done it this way” is to go downhill.
"Unless we work differently, think differently and adopt some of these new tools that are coming through, I think we’ll be lagging a lot behind the rest of the world,” says Peter Montgomery. "New Zealand businesses need to look at the sort of stuff that’s coming through now and say ‘can we be more effective, can we collaborate better, can we be more in control, or do we just keep driving towards that wall one day?’. We just don’t know how to use the internet here and we’d better start learning real fast, because everyone off our shores is using it a lot better than we are.”