Britain open for business – thanks to technology developments & pro-growth budget

10th April 2011

The balance may be tilting away from cost cutting towards business development, if feedback from providers of software and services are anything to go by, as FSN writer Lesley Meall reports – and some of the changes in the recent Budget could combine with this to make Britain a great place to build a growing business, no matter which country you hail from.

The UK Budget recently delivered news that looked good for British businesses and international organisations that are looking for somewhere to plant their corporate flags. ‘Cutting red tape, increasing certainty around the tax system and creating the right environment to encourage investment were high on the agenda,’ says Malcolm Edge, head of UK markets with the Big Four firm KPMG. ‘It will provide a solid foundation for business to build their growth strategies.’ 

This will be welcomed by the very many finance professionals whose livelihoods are in any way reliant on specialist software and systems – as developers, end users, or consumers of the finance and business information they collect and manipulate, or analyse and report on. Because since the darkest days of the downturn, the focus has been on survival rather than growth, and this has locked the specialist software industry into a period of stagnation that has been frustrating and limiting for those trapped in its ecosystem. 

‘Since autumn 2008 we’ve been going through a phase when lots of potential projects just couldn’t get approved,’ reports Haseet Sanghrajka, managing director at ST Consulting, as businesses went into survival mode. This means that a lot of businesses have been trying to do what they can with the versions of the software and systems that they already have at their disposal, even if this is incompatible with their wider business aims and objectives, or these could be achieved more efficiently, or cost-effectively, with an upgrade to their existing systems or a new piece of software. 

There have been exceptions to this, of course. The advantages of hosted online services – such as low up-front costs, flexible access, and minimal maintenance – mean that many new and growing businesses have opted for the ‘pay-as-you go’ route when they do commit to new systems (on which more, later). But over the past year, ST Consulting (which specialises in the delivery, implementation, training and support of Microsoft Dynamics GP and Microsoft Dynamics CRM solutions), has started to see a change in priorities, particularly among its existing user base. 

‘People are starting to play catch-up,’ says Sanghrajka. ‘Rather than saying “Let’s just carry on as we are and see how things go”, they are tending to things that they should have been doing, but didn’t.’ This has manifested itself in a variety of ways. ‘The classic example is businesses upgrading their systems, so that they are using the most up-to-date versions of the software,’ he says, and they’re not just looking at upgrades to their accounting and CRM systems. ‘People are also asking about the latest versions of MS Office and Windows,’ he says. 

At Nolan Business Solutions, commercial director Mike Risley is also seeing businesses show more interest in the updates and enhancements that have been added to the latest versions of their financial applications, such as self-build dashboards. ‘Being able to easily build your own dashboards, without needing to get too techy about the underlying workflow, can deliver big benefits for businesses,’ he says, because it can provide great visibility into what’s going on at various stages of what would otherwise be a series of complex and multi-faceted processes.  

It’s not unlike activity-based costing. ‘It’s not ABC in the truest sense, because there’s too much admin work involved in that,’ says Risley, and the insights are being generated on the back of increasingly automated processes. ‘After a sale, for example, a business will want the order to flow through the system, and be able to follow it through the associated processes quickly and easily,’ he says, by way of an example, ‘and although one of the drivers for that remains reduced cost, businesses also want to be able to manage their processes with the minimal amount of people.’ 

So, anything that promises to address problems with the integration of applications and data is also on the agenda in many growing businesses. ‘There are still lots of islands of data,’ says Risley, and this creates a disconnect between different parts of the organisation. ‘If you talk to operations, or the sales director, you still find that they have a very different view to the finance director on where the organisation is,’ he suggests, and although this has been a businesses, of all shapes and sizes, recent advances in technology are applying a much-needed salve. 

‘If you want to better process data there are lots more options,’ says Sanghrajka, as it becomes progressively easier to integrate multiple systems and the related data. ‘The pervasiveness of web services means that disparate systems can talk to each other without expensive bespoke software,’ he adds, as FSN covered here, and Sanghrajka is seeing increased interest from its user-base in the possibilities this creates – not least because it means that ST Consulting, and similar organisations, can now talk to their customers and potential customers about the business benefits of improved integration using numbers that won’t frighten them off. 

Of course, the potential complications created by disparate systems and data mean that integrated solutions remain popular. ‘We have seen an increase in new business,’ reports Stuart Andersen, sales and marketing director, Pegasus Software, where the integrated Opera 3 suite covers finance, payroll, CRM and the supply chain. ‘Sales have been growing quarter on quarter, and during the last three months of 2010 there was a 30 per cent increase on the previous quarter,’ he says. ‘These are not migrations or upgrades,’ he adds, ‘so I think that this proves that there are still organisations out there buying new products.’ 

Many traditional software developers such as Pegasus now offer hosted versions of the products that they have historically developed and deployed in on-premise scenarios, but according to Andersen, this doesn’t seem to be a very popular option among the mid-market that typically chooses its products. ‘A lot of our users and potential users are still looking into the technology,’ he says, and trying to understand what the Software as a Service (SaaS) approach could mean to them. ‘They’re still concerned about the security aspects of it,’ he says, adding: ‘But at the entry level, SaaS is a very different sell.’ 

At Twinfiled, the SaaS provider doesn’t see its ‘entry level’ users as the single homogenous entity that Andersen’s comment seems to imply; some Twinfield users are accountants in public practice, some are accountants in industry, and some are business people with little or no accounting knowledge who have many different perspectives on, and expectations of, SaaS. ‘Some of our users are more positive and entrepreneurial than others,’ says Mark Davies, UK country manager at Twinfield, ‘but all of those who are trying to grow like the way that software as a service can provide the flexibility to support this.’ 

Davies echoes the comments of Sanghrajka, on integration. ‘The building block approach of web services is a big advantage for SaaS,’ he says, ‘because it makes it easy to adopt the best of breed approach’ – though he also agrees with Andersen, on security. ‘This is still at the top of everybody’s agenda when it comes to SaaS, says Davies. ‘It’s largely an emotional issue,’ he adds, because the security offered by third party providers tends to be better than most small businesses would otherwise be able to access, but as FSN recently highlighted, when on demand services do go awry, contracts tend to tilt the balance of risk firmly in the direction of the end user. 

On the one hand, it seems that growing businesses are still struggling with some of the perennial problems they have long faced; but on the other hand, advances in technology are making those hurdles increasingly easy and affordable to leap. So some of the steps that were introduced in the recent UK Budget could well provide the kick-start required to get business in Britain moving again – no matter where those businesses hail from. 

‘The removal of business regulations, which were costing £350m per annum, and the three year temporary reprieve for small businesses with less than 10 employees (and genuine start ups), to comply with domestic regulation, are positive moves,’ says Edge, and the two per cent reduction in corporation tax from April should make businesses feel more than welcome. ‘Ultimately the rate will be 23 per cent, the lowest in the G7,’ he adds, ‘which makes a clear statement that the UK is a competitive place from which to do business on the world stage.’