Author: Ryan Onushco
Businesses have been hearing about the trend towards more technology and automation for years now. However, the abrupt need to shift to remote working environments over the past year due to the coronavirus for many companies has escalated the need to move to the cloud and become more “tech-friendly”. For companies that have been slow to adapt, these remote working environments have severely affected back-office efficiency, timeliness of reporting and ultimately the bottom line. By exploring current technology trends for your back office operations, businesses can streamline their reporting capabilities and better align their goals to propel their business into the future.
Misconceptions about modern cloud technology for the middle market
Too expensive for small-to-mid-sized organizations
When most people think of enterprise resource planning (ERP) systems, they may think of software like SAP and Workday, which can be a significant financial investment. However, over the past four to five years, many of the leading software providers (Sage Intacct, Microsoft and Oracle) have developed strong ERP alternatives designed for the middle market. An ERP system is an integrated management application that automates business processes, and provides insights and internal controls. These solutions may not be as robust as some of the larger enterprise solutions, but they are substantial upgrades from other common accounting systems being utilized in this space (QuickBooks and Xero). For most organizations, the additional automation provided by these systems is well worth the price point.
Difficult to implement with limited internal resources
Implementing new systems and changing longstanding processes can be daunting, especially when you are already operating with a lean accounting and finance team. However, with the recent surge of cloud technologies being developed and which are geared towards smaller enterprises, the word “implementation” does not necessarily mean the six to twelve month project it used to. Many of the market-leading cloud ERP packages for the middle market can be implemented and fully deployed in less than six months, with many implementations completed in less than 90 days! Additionally, there are many other complimentary technologies which automate processes like expense management (Webexpenses and Tallie) or accounts payable (Bill.com and Yooz) that can be implemented and deployed in less than a month. In most cases, it is still advised to engage an implementation partner when considering the implementation of a new ERP system.
The cloud is not as secure as on premise systems
On premise systems can be secure if you have the right controls in place and have a strong internal IT team. However, this is not the case for many middle market companies. From a risk management standpoint, sharing data security responsibilities with one of the reputable cloud ERP providers is typically a great option. Most of these providers go through extensive third-party IT audits, which many middle market companies are not regularly performing. The short answer is that neither option is more or less secure. However, a less sophisticated internal IT team can put you and your company at risk in an on premise scenario, whereas the cloud provides the option to share some of that risk with external experts. That being said, any software provider being considered should be thoroughly vetted and have SOC I and II audits completed annually.
We know we need to automate, but where do we begin?
Assess your current state
You have likely been operating this way for several months or years and your organization is still alive and kicking. Instead of jumping right into the selection process for a new system(s), take the time to conduct an objective assessment of the current accounting and finance infrastructure. Some questions you may want to consider and investigate further are:
Conduct a selection process
Now that you have done your due diligence and understand the current strengths and weaknesses of your infrastructure, it is time to conduct a selection process. If you are willing to make the investment for additional expertise, one option is to hire a consulting firm that can run a structured ERP selection process. If you feel as though you have a good understanding of what you are looking for after going through the assessment, you should be able to narrow your search to three or four solutions that may be a good fit. Once determined, you can easily identify an implementation partner for the respective solutions, which you can engage for additional discovery conversations and demos of the software. The implementation partner selected is just as important as the capabilities of the actual software, so be sure to vet them thoroughly. Request partner references, make sure they see eye-to-eye on your vision and consider if they fit into your company culture, as they will be an extension of your team for the next several months. Once you have selected the software and implementation partner that is right for you; it is time to confirm the scope of the engagement, costs associated with the implementation, on-going subscription services and determine a timeline for completion.
Benefits of modern cloud technology for the middle market
Better systems and processes lead to more timely reporting and the ability to track metrics that may have not been reportable previously. Business leaders using data to their advantage will continue to get ahead of the competition.
Ability to “do more” with current staff
As you begin to automate manual tasks of your current staff members, you will find you are able to “do more with less”. This allows current staff members to re-focus their efforts on more value-added and strategic work.
Ability to work and access information anytime, anywhere
Today’s employees are seeking and sometimes even expecting more flexible work arrangements. Deploying cloud solutions allow for greater flexibility to work from home and offer a solution to keep business moving when unexpected events occur that do not allow employees to make it into the office. We often joke that with the mobile applications these solutions offer, executives can approve bills for payment on their phones while sitting on the beach somewhere instead of signing checks!
More automation = less room for error
The less data being manually entered or re-entered by staff, the less prone to errors reporting will be. Introducing technology to automate some of these steps leads to more accurate reporting.
Flexibility and scalability
Are your back-office systems and processes scalable if you decide to add a new line of business? How about if you identify a competitor that would be a prime acquisition candidate? The answer for most companies who have not adopted technology is most likely “no”. Implementing solutions now not only solves your problems of today, but also sets you up for what may be around the corner.
Keeping your head in the clouds for future technology
Taking the step to fully embracing automation and cloud technology trends can be challenging. Our Baker Tilly Sage Intacct professionals are knowledgeable and prepared to assist your business in determining how to evaluate and implement new cloud technology processes for the future success of the business.