Expansion & Improvement,
If you want to get the best from your owner-managed business, that means using all the tools you have at your disposal. Embracing the benefits of digitisation is one way to give your company a very real and tangible competitive advantage in the marketplace.
Anoop Rehal explains why digitisation is all about understanding your business and its processes, and not a case of jumping on the latest software app bandwagon. He also talks about how a digital approach helps you to think about your business in tomorrow’s world.
How digitisation works for an owner-managed business
Becoming a digital business is no longer a theoretical ‘nice to have’ item on your board’s to-do list. It should be at the heart of your company’s wider strategy.
Digitisation takes on many forms, but a key message is to not confuse digitisation with working in the cloud. The main cloud accounting providers, like Xero, did very well at promoting the cloud accounting idea and that concept of working online has certainly made the accounting industry move on. But there’s still some confusion around the difference between ‘working in the cloud’ and ‘digitisation’.
In short, this is why the two concepts are different:
Cloud is all about being able to access the software, solutions and tools that you need via online platforms – removing the need to sit in one office using one specific server.
Digitisation is about having your business information held in a digital format and using digital processes to make use of that data constructively within the business.
Structuring your business data and understanding your business
The digitisation process is all about structuring your data. There’s no point in having lots of online tools and systems if your initial data isn’t in good shape. When I sit down with you, there are certain things I need to know about your business.
I need to understand:
What your company’s data inputs and outputs are
What your key operational and financial processes are
Which people are involved and what their roles entail
What your wider aims are for the business.
Knowing what your front-end processes look like is important, as well as what’s business critical in these processes. Owners tend to have a good understanding of what data and information they need to be in control of in the business – and digitisation can really help with this.
Knowing what needs to be digitised
To complete the process effectively, it’s necessary to break down your sales process and your operational process to see how they can be digitised.
Do you need a good CRM system?
Do you need a cloud accounting platform?
What data and what systems are needed for you to make informed decisions?
What could be automated and what needs to remain as a manual process?
Can you run things from a spreadsheet, or do you need an automated data process?
On top of this, once you’ve understood the processes, it’s about looking at your team and deciding what training and development is needed to get everyone up to speed. It’s not just about having the apps and the tools – there’s a far wider remit.
Working with a digital-savvy accountant
A good accountant who understands digital is so important to making your digitisation process a smooth and productive transition.
There’s a real education piece on digital to be done. What your accountant should be selling you is not the software; they should be selling you the expert consultancy services of the firm and their knowledge of how digital can help you, as a business.
Getting a high-level overview of your processes and goals is so valuable. The software you have may not be bad if it's industry specific and does the job well. You don’t need every new app under the sun to make digital work. So, it’s important to make your decisions based on the needs of your business, not the latest tech trends.
Questions that a good adviser will ask include:
What does your company do and what are your end goals?
What are the processes you use on an everyday operational basis?
Do you need a better infrastructure to scale up your sales?
Will you need an expensive high-end system, or would a mid-range platform do the job?
As advisers, we take the time to get to know your business and what you want to achieve, so we can facilitate between you and the software houses to choose the very best systems for the job.
Why digitisation is an ever-evolving process
Digitisation is not about one project, it’s a constant evolution. This is a transition that will take time and effort to get right, but it isn’t a project you can complete in one go.
It’s a good idea to have a document to give to software providers that outlines what you need and the exact requirements that you’re after. Then automation can start being added in, and you can look at key controls and sorting out your metrics and reporting.
As an industry, accountants haven’t been great at starting the digital conversation with clients, especially over the course of the pandemic. Because of Covid, it’s been a rush job to get cloud and digital up and running. Many companies didn’t have any cloud systems at all and now have something in place – but are these temporary systems robust enough?
There’s been a social change too. When it comes to looking at companies to work with, many people are looking for a digital-savvy employer. As a business, you need to be competitive in the marketplace to find talent and hire the best staff.
Becoming a ‘digital business’ isn’t just about the potential efficiency wins. It’s about gradually evolving your strategy, infrastructure and team so you can embrace the digital benefits.
Taking the digitisation process step by step
You don’t want to attempt a digitisation strategy all at once, on a very small budget. It’s better to digitise small pieces over time as you evolve. When you have a small budget and a small timeframe, your digital approach can be poorly thought out.
What you want – i.e the end goal of digitisation
What you need – and how this will add value for the business
What the costs are – and how you plan to fund this budget
Understand the business and your goals and then assess the costs and the budgets. If you only have £50k, and it will cost £60k, which areas do you focus on? It’s about limiting the stress on your staff and helping the business to run more efficiently.
Keeping up to date with the digital revolution
The world of tech changes so quickly these days, so it can be hard to keep up with the constant evolution. That’s why partnering with an adviser who’s a software expert is such a bonus.
Software changes, platforms disappear and applications will always be superseded. Working in the cloud helps as it’s constantly updated and there will always be new development of that software. The roadmap for anything digital is to know that your providers are constantly developing their service.
I’m not a big fan of using lots of different apps. You may have a brilliant legacy system that does the job very well. You might be able to build an API into a data warehouse to make it work with your accounts. You may be able to automate things without it always being in the cloud.
As an adviser, I’m always looking to help clients build the most effective and powerful digital systems – and that will be different depending on your business, sector and budget.
What are the key things to look at?
For me, the key is to understand that digitisation is a means to an end and not a goal in itself. You have to think about what you want to do before you start the IT process. It’s about going through the ‘try, fail and try again’ process, or your project won’t work.
To get the best from your digitisation strategy:
Look at your front end and make sure that your data is clean
Look at the processing of this information and automate everything that you can
Think about how to get the best from your people and your customer interactions.
Try to get real-time management information from your digital system
Keep on top of your financial metrics and manage your cashflow
It won’t be perfect from the start. But through a process of good planning, trial and error and the support of a good adviser, you will get there.
How Haines Watts can help to drive your digitisation
As an owner manager, you must think about digitisation because you have to think about your business in tomorrow’s world.
You want to have a successful business, enough income to have a good lifestyle and to leave behind a business that’s stable and provides your people with a stable future for years to come. At Haines Watts London, we’re an independent voice to help you achieve this.
We can ask the right questions about your business and tease the answers out of you. We can help you see what digital systems are needed to help you hit your goals. And we can work with you over time to evolve and adapt your digital approach – helping you to deliver the best possible business into tomorrow’s world.
If you want to become a digital business, get in touch for a chat with our advisers