Small and medium businesses (SMEs) that want to behave and act like bigger companies really have more choice than ever before with the help of ERP software.
Now, it’s time for the next chapter in cloud computing – the liberation of enterprise-grade applications from corporate data centres, into the hands of small and medium-sized enterprises (SMEs).
Enterprise resource planning (ERP) software was an early mover. NetSuite and later MYOB Advanced and others helped manufacturers, retailers and distributors swap in-house servers and desktop applications for cloud data centres and smartphones.
It’s the enterprise analytics tools, however, that show the greatest potential in the SME market. Analytics programs that would cost tens of thousands of dollars to deploy in a data centre are now available through a browser for as little as A$24 a month.
Their role is to visualise large collections of data as images, spotting trends or outliers, and providing evidence to support boardroom decisions. They also work with most popular types of accounting software, as well as ERP software.
The reporting tools in the small business accounting ecosystem can create dashboards of KPIs and cash-flow forecasts under multiple scenarios. Enterprise analytics, such as SAP Analytics Cloud, use machine learning to select the best visualisations and automatically create a story with commentary. A business user can then edit the charts, formatting and notes.
Oracle’s Analytics Cloud and Business Intelligence has been used by a medium-sized construction company to connect its project management database to spot early warning signs for project cost blowouts. A university used the tool to improve the way it profiled, targeted, acquired and retained international students. A recently merged regional council plugged Oracle’s analytics software into a consolidated bag of applications to get a single view of operations.
Australian consumer advocacy group Choice, which tests and ranks household products and runs campaigns to improve consumers’ rights, recently started using Oracle’s analytics platform. Previously, the group was collating survey data in Excel spreadsheets and a Microsoft SQL database to make its recommendations.
SAP Enterprise Resource Planning. Understand how to use SAP to perform basic business functions.
Choice is now using Oracle’s Analytics Cloud and Business Intelligence platform to add more sets of data from manufacturers, such as maintainability and customer demographics. Analytics tools can use a range of pictorial representations such as scatter graphs to see concentrations of data or to spot outliers.
“It can be difficult to see the concentration of information with the naked eye,” says Scott Newman, Oracle ANZ’s senior director, cloud platforms and infrastructure solutions consulting. “Clusters can show where the concentrations are, then you can draw inferences.”
In the Choice example, the tool can show timeframes for required maintenance of a household product, clusters of buyers by demographics, or price points. It can identify a common set (or cluster) of features, or if a high-selling model has a feature (revealed as an outlier) that the rest of the competition lacks.
Integrating analytics with business intelligence takes this a step further. SAP’s Smart Discovery module in its Analytics Cloud provides information on key influencers and any outlier data points, and creates a formula for end users to create their own what-if sales simulations. Rather than looking through a graph for the answers, a sales organisation could ask the app, “What are the key influencers driving deal size?”
One of the most powerful features of enterprise analytics tools is their predictive capabilities. The tools use proprietary algorithms to identify contributing variables and determine factors that influence behaviour.
In finance, predictive modelling can help create profit-and-loss (P&L) and budget forecasts a month, quarter or year ahead.
“We can apply these algorithms to the report and see that the medium to long-term viewpoint looks like this. We can ask, how do we model the business with an improved outcome?” says Steve van Wyk, head of analytic sales, SAP Asia Pacific Japan. This cuts down planning from weeks to days or hours, he adds.
High-end tech for dollars a month
Oracle and SAP are synonymous with technology that runs airlines, global corporations and government departments. Price tags usually run in the millions and come with onerous lock-in contracts. The remarkable impact of cloud computing is that SMEs can access versions of this technology at such low prices.
“Customers want easy access to software, to have beautiful software at their fingertips, and to turn it off if they don’t like it,” van Wyk says.
The Oracle Analytics Cloud includes free trials and has a free augmented reality app for smartphones called Synopsis, available on Google Play and the Apple App Store. Hold the phone’s camera over a printed table of data and it will automatically generate charts with smart summaries that you can filter and share.
Oracle’s Analytics Cloud also has a mobile app that will take voice requests. A car dealership could ask the app for sales figures for Mazda 3 hatchbacks in January. The app will show the report with the filtered data. Those reports will soon automatically generate notes next to each graph containing plain-English interpretations of the data.
The idea that a company could pay US$288 a year to run SAP in its business would have been unthinkable before cloud computing, but SAP’s Analytics Cloud starts at just US$24 per user per month, and has a 30-day free trial.
This starting price gets you access to data visualisation tools for small data sets. The price increases with the volume of data, the number of sources and big-data features such as data lake stores. SAP Analytics Cloud includes free classic KPI templates by industry, as well as standard financial reports and headcount planning.
Some technology start-ups are moving early to analytics tools by SAP, Oracle, IBM, Tableau and others, because it signals to investors that they are serious about scaling their business.
The Internet of Things trend, which embeds sensors in roads, cars, even clothing, is producing massive amounts of data that will in turn feed the growth of analytics tools and services. Enterprises typically employ data scientists or engineers to pull answers from large databases on behalf of sales or finance teams. These roles are very expensive and hard to fill due to demand.
Of course, few SMEs have the budget for a data scientist, and that’s where the enterprise analytics tools can prove their worth. However, while their graphical interfaces are an improvement on previous data analysis tools, they are not yet as simple to use as many apps made for the small business market. In the future, as this sort of analytics software is further developed, that may not be such an issue.
People power in the cloud
SMEs nearing 100 staff can also look at upgrading their payroll to a function controlled by HR. Enterprise HR software tracks the employee lifecycle – recruiting, hiring, onboarding, performance assessments and, finally, offboarding. The payroll system becomes the master for all employee data.
“In smaller companies, the CFO keeps things stable and doesn’t change payroll for as long as possible,” says Phil Lennon, general manager for sales at Aurion, which specialises in HR and payroll software. “However, eventually, business drivers such as growth, acquisition or regional changes will drive complexity in their payroll systems.”
In Australia, changes such as the upcoming Single Touch Payroll can require manual changes in lesser-powered payroll apps. Single Touch Payroll will apply to businesses with 20 or more employees from 1 July 2018, and to those with fewer than 20 employees from 1 July 2019. It means employers will report payments such as salaries and wages, pay-as-you-go (PAYG) or withholding tax and super information to the Australian Taxation Office directly from their payroll solution at the same time they pay staff.
When you have more than 100 employees with various awards, leave entitlements and pay cycles, the manual work can become overwhelming. Mistakes creep in, leading to unhappy staff and more admin work.
One trigger for upgrading payroll to enterprise HR software is to consolidate rostering, payroll, work health and safety, and finance into an integrated platform that also manages employee careers and performance. These platforms integrate with popular SME cloud accounting software, as well as SAP and Oracle finance software applications.
“… eventually, business drivers such as growth, acquisition or regional changes will drive complexity in their payroll systems.”
It is also easier to produce reports using a single platform. The software can automatically spit out template or custom reports for line managers as well as central HR. This gives line managers greater responsibility to manage overtime or headcount themselves, via self-service analytics portals on their tablets.
As SMEs increase in size so do the options from their suppliers. For example, Aurion makes payroll and HR software that integrates with smaller accounting packages, through to ERP software. A company can run the HR software on its own servers or consume it as a software-as-a-service. Aurion has a professional services team that will administer disbursements and system and payroll administration, while leaving the company in control of payroll processing.
Alternatively, an SME can outsource the whole payroll service, including all responsibility for non-compliance issues and changing government legislation. (HR functions such as talent management and recruitment aren’t included in this arrangement.)
Demand for payroll is encouraging more familiar accounting brands to try their hand. MYOB bought enterprise payroll software PayGlobal in 2014 and developed a cloud version, MYOB Advanced People, which it released in February 2017. Advanced People is intended to complement MYOB Advanced, its cloud ERP, based on the well-regarded US platform Acumatica.
MYOB Advanced People can be used through a browser like all cloud software and simplifies payroll by automatically apportioning items to a pay period. After entering employees’ details, a tax calculator determines employee tax and superannuation payments for each pay run. A business can then make super contribution payments directly through another, connected MYOB service called PaySuper.
Employers can track and calculate leave entitlements including annual leave, sick leave, shift leave, parental leave, personal leave and long service leave.
A key driver for SMEs moving to MYOB’s Advanced People is to get off older software, so their staff can access it from anywhere and on any device, says Carolyn Luey, MYOB’s general manager for enterprise solutions and New Zealand.
“It also simplifies complex workflows such as superannuation payments, resignation calculations and multi-company payroll.”
As she explains, retailers especially want simplicity in payroll when dealing with multiple stores and shifts of different lengths. Staff can be part-time or full-time, working public holidays, weekends or overtime. MYOB Advanced People starts at A$46 a month for 20 employees and is recommended for SMEs with 50 or more staff.
SMEs that want to behave and act like bigger companies really have more choice than ever before. Cloud-based enterprise software provides the structure and automation required to support a much larger business – at a fraction of the price of previous systems. With the right analytics and insights, today’s small-business owners have a better chance of growing to join the ranks of mid-size companies – and they won’t need to change their software when they do.
Enterprise resource planning: taking the leap.