For small and medium businesses, one of the biggest challenges that exists today is to leverage the resources that you have available as you operate your business. Whether it’s your people going above and beyond to get the job done, or the much too common practice of pushing your software beyond its means, you are doing exceptional work to extract value. However, there comes a point where the strain on these resources becomes too great—your people are overworked, your processes aren’t designed to keep up with the current or future needs of your business, and your technology has become more of a hindrance than a help.
Are You Losing Your “Agile Advantage”?
If you know the feeling, it’s only a matter of time before you lose the “agile advantage” and start to notice that your people are wasting more and more time on the necessities and less and less time on positioning your business for growth. Add on top of this the risks that come from overworking people and relying on manual processes, and you are building a growth ceiling when you should be building your business.
It’s at this point that you should begin to take a look at your people, processes, and technologies to identify where you can find ways to work smarter, not harder.
A recent study by Oxford Economics discussed the advantages in agility and innovation that Small and Midsized companies have and can maintain their competitive advantage as they continue to grow by finding smarter ways to leverage the finance department and the technologies they use.
Boosting Performance: How Leading SMBs Operate
In the study, the team surveyed 1,500 executives at companies making less than €1 billion in annual revenue to discover best practices and to learn what leaders (top 11.5% of respondents) did differently:
“By emulating an elite group we call Finance Leaders, finance executives at smaller companies can leverage their size and position to boost performance. This becomes especially important as smaller companies directly compete with larger companies in today’s flattened, global economy. And as they grow, their finance operation will need to run effectively and efficiently at scale.”
What Separates Leaders from the Rest of the Pack
According to the study, researchers found that leaders did six specific things that kept them ahead of the pack:
- Have strong influence beyond the finance function
- Drive strategic growth initiatives
- Improve efficiency with automation
- Are very effective at core finance processes
- Collaborate regularly with business units across the entire company
- Work closely with governance, risk, and compliance (GRC) and are well equipped to handle regulatory changes
Leveraging People, Processes, and Technologies for Smarter Growth
For growing companies that hope to continue their momentum, one of the biggest hurdles that stands between them and their goals is their current technology stack (or lack thereof). Too often, finance has the potential to be more agile, but either fails to use technology effectively or fails to embrace the value that it poses to their company. According to the survey, leaders are much more likely to see technology investments as important compared with their average peers; when asked which of the following technologies were very important or critically important, they responded in the following manner:
|Shared Services Platforms||41%||79%|
|Real Time Analytics||34%||83%|
Per the study:
“Furthermore, whereas Finance Leaders almost unanimously say modern digital tools like cloud-based applications, ERP platforms, and Big Data are very or critically important to the finance function today, less than two-thirds of small and mid-size companies do. […] They may feel overwhelmed by what they see as the complexity of technology: 74% of small and mid-size businesses say new or emerging technology is increasing the function’s complexity (vs. 58% of larger companies).
In addition, smaller companies may be challenged to find the resources to update their systems—61% said the difficulty of updating technology without disrupting daily activities was a top-ranked challenge to making their finance function more efficient. Still, these businesses could risk future growth if they ignore the tools that are so important to top-performing businesses.”
It Pays to Select Technology Early
The study found that growing businesses often see a move to enhance their technology stack as risky and potentially business-disrupting. While there is nothing easy about an implementation project, consider the risks of waiting even longer to complete one. The larger your company gets, the more challenging each day becomes—more work, more risk, and more overworked employees who will become increasingly sick of doing work that doesn’t add value to the business.
Add on top of this the risk that implementing further down the growth calendar poses (imagine trying to implement a business-changing software when your company is 10%, 20%, or 100% larger than it is today), and you’ll find that the benefits of implementing today greatly outweigh the risks.
Per the report,
“Although lack of budget is a major issue for small and mid-size companies, a larger stumbling block may be their outdated technology. The use of established (like cloud, Big Data, and ERP platforms, analytics) and emerging (like IoT and blockchain) technologies can provide a major efficiency breakthrough to the finance function at smaller companies. This, in turn, can boost performance across the company and inform better decision-making.”
As your company grows, it’s important to find technology that empowers employees, reduces risk, and positions your company for comfortable growth. Additionally, it’s vital to select technology that is proven—not only for your company’s needs today, but in the future as well. We invite you to download the entire report, Small and Mid-Size Companies Can Boost Performance Through Finance from our friends at SAP Concur, and learn more about the technology we implement here.