General ledger, payroll, e-commerce, banking, CRM, inventory: this is your business ecosystem. Do your systems talk to each other? Or are they only distantly acquainted?
Imagine your data as water: it should be flowing smoothly from one place to the next, not collecting in a barrel so you have to scoop it up in buckets and pour it into the next pipe. When your systems talk to each other, the water flows along without interruption. When you’re bucketing data from one system to the next, it causes leakages every time the water gets moved around and it’s an unnecessary use of time and money.
But we’ve been doing it this way for years!
Unfortunately, many Kiwi business still operate on systems that aren’t properly connected and are often underutilised. Take timesheets for example; these are often filled out in a spreadsheet, emailed to a manager to be approved (yes, each individual spreadsheet), then entered into the payroll system by an administrator, before being processed by accounts so payments can be made manually. Despite being painfully clunky, this process doesn’t actively cause problems – after all there are businesses out there who have been using spreadsheets for decades – so it often doesn’t get any attention. I hear it often: “We’ve been doing it this way for years and it works fine!” Which is another way of saying, “Why should I spend money on something that nobody’s complaining about?”
It does cost a chunk of money to upgrade an organisation’s systems. But the right technology can enable staff members enter their timesheets directly into a system where the manager can see them all in one place for approval. Then the system pushes the approved timesheets into an automated process that calculates the taxes owed, automatically generating direct debits to pay the staff members and Inland Revenue. This saves hours of work across admin, management and accounts – and it prevents the kinds of errors and leaks that inevitably crop up when we transfer data manually.
Starting from Xero, all the way through to fully customised systems
It’s amazing how many companies have systems in place, but the systems don’t communicate and are often massively underutilised. I wish I could say this is unusual, but it’s not. When I help people to create a business ecosystem, we start with Xero. It’s being used by more than a million Kiwi companies, yet many don’t understand how to get full value from all of its features.
If you’re a small business owner, you should be talking to your accountant about whether you’re doing everything you can with
your cloud accounting platform. Xero’s basic inventory system, for instance, can be a great way for small businesses to have a beautifully connected micro-ecosystem. For mid-sized business owners, you’ll need more – there are so many well- priced off-the-shelf solutions that plug seamlessly into your cloud accounting software. For instance, you might find that you can use WooCommerce, CIN7, ApprovalMax and PaySauce, all of which talk to each other and to Xero. If this makes no sense to you at all, that’s what we’re here for; talk to us about how to choose the right add-ons and take advantage of all Xero’s features.
As your business grows to the $20 million turnover or multi-branch category, you might need a custom-built solution. It’s really satisfying to be able to assist in a successful implementation of a system of this size. For example, a retail business can roll out a system that allows customers to place orders online, pick up from any one of its stores nationwide and log into a portal to track their orders and accounts. Without the right technology in place, an organisation could be employing anywhere up to five data entry people – people who could be better utilised in other areas of the business.
Reluctant workers may need their hands held
I know the phrase ‘change management’ strikes boredom into the hearts of many. However, introducing a new system needs to be done gently and sympathetically. Some of those staff members who love their spreadsheets and don’t see anything broken with the old system may be less than enthusiastic about change. Some may even be actively hostile for a variety of reasons.
If you’re making a significant investment in new technology and connecting your systems, it’s mission critical to leave room in the budget for training your staff.
The next level: your data as another revenue stream
If you do an outstanding job of collecting your data and systematising it, there’s a goldmine of information there for you to analyse. It can help you forecast more accurately, improve your pricing and target your marketing. And there’s another potential upside: your data may be valuable to other businesses.
You might be surprised at how valuable your data could be for you own business and beyond.
How to get started
At Grant Thornton we map our clients’ ecosystems, then we build or strengthen the connections between each system and help businesses to plan to better use each platform. We talk about what they’ll need in the future, change management, and where they can build value and reduce inefficiency and leakage.
This is an area of business where your advisor can provide you with outstanding value if they know what they’re doing. You don’t need to go it alone – we can help.