It’s well known that cloud computing accounting software providers—such as Xero—are continuing to disrupt the accounting industry. This is happening at a time when the information technology (IT) industry is struggling to meet the demands of small- to medium-sized businesses.
Whenever I visit small-business clients, I often discover that they’re severely hamstrung by their old, antiquated IT systems and processes. Outdated accounting software and email systems; primitive stock management programs; near non-existent enterprise resource planning (ERP) solutions; tired-looking websites that confuse prospective customers. I’ve seen it all.
What’s going on?
Why are so many small businesses still using such outdated, inefficient systems and processes? Is it entirely a cost-related reason? Fear of change, perhaps? Or something more sinister? A lot of questions, to be sure. Let’s explore further.
For those small-business owners staying put because of cost, they’re in for a rude shock. Indeed, many are unaware that a brand-new business can run a fully integrated accounting solution, stock management system, and e-commerce website for under $500 a month. So, why is it that established small- to medium-sized businesses resist overhauling their legacy systems?
The way things were
Let’s rewind roughly 12 years to the pre-cloud solutions era. Back then, I had a business client that was contracted by an electrical company to replace and install electrical poles. After the Black Saturday bushfires—in which he unfortunately lost his house—he became extremely busy.
During this manic period, he realised a better business management solution was needed. So, he hired an IT developer to build custom software that would allow him to geo-track his truck drivers and bill them based on time and location.
Having spent more than $180,000 on development, this client hadn’t even seen a beta version of the software application—let alone a complete, ready-to-launch version! Ultimately, he scrapped the development as the expense was crippling his business.
The way things are
Skip forward to today, and there are solutions like Xero, which for roughly five years has integrated third-party apps like GeoOp. For just $432 a month, GeoOp does everything my client wanted all those years ago. Why would you want to own such an app? Because developers or your IT staff convince you that they can build it and you can then sell it to others. Good luck with that! A rabbit hole I’ll explore in a future blog post, perhaps.
I suppose the point I’m trying to make is don’t always go to your IT staff for advice on what systems work for you. I’m not saying don’t trust them altogether, but just be aware that there are many possible instances where they—for reasons that have nothing to do with what’s best for your business—won’t support any significant changes.
Don’t be left behind
Look, this industry-wide shift is no overnight sensation. We’ve seen it evolve for more than a decade. To be sure, there’s nothing new or exciting about migrating across to a cloud computing business solution. It’s the new norm.
The longer you stick with your legacy IT system, the longer your competitors have a significant cost-efficient advantage over you. Need an example of how novel technology disrupts an industry? Look at how the taxi industry is coping with the arrival of Uber and other ride-hailing companies.
My jaw drops whenever I hear business owners saying their business is too big for Xero or any other cloud computing software. Whilst it’s true that Xero has a soft threshold of 5,000 monthly transactions, using complementary solutions like Unleashed Software ensures the grunt work is done by third-party apps, meaning Xero is left to deal with the essentials. If your business is too big, then look into solutions like Oracle’s NetSuite, SAP, and Salesforce.
Give Ashfords BizTech a call if you want to chat about how cloud-based technology can improve your business’ resource allocation and overall performance. It's time to embrace the inevitable change.