Article credit: Sage 

As businesses look ahead to the business trends of 2020 to plan their strategies for the coming year, we know technology will continue to play a pivotal role in how we do business as newer, more powerful innovations become available.

We predicted in 2018 that 2019 would be the year of the integration boom for core business areas such as funding, payroll, HR, and accounting. Digital transformation across the globe has fuelled this change as businesses move toward more agility, better flexibility, and doing more with data.

Now we’re zooming in on 2020 for the UK manufacturing industry and the heavy activity from a political, legislative and social perspective that will occur.

How will technology help CFOs and CEOs in the manufacturing space to navigate emerging complexities? What are the other factors that business leaders need to consider as they plan for growth and expansion?

Read this article for three business tech predictions worth considering when planning your strategies for 2020. And below are three tips to help you tackle business complexities that may try and stand in your way.

1. All eyes on intellectual property and e-commerce

One topic that is picking up speed within the World Trade Organisation (WTO) is the risk of the moratorium on e-commerce expiring, enabling some countries to start imposing a customs tariff on intellectual property. Adam Prince, Sage’s VP of Product Management, explains how this might impact business.

He says: “Between trading goods and trading services, most free trade agreements only relate to goods. The World Intellectual Property Organisation (WIPO) estimates that 80% of the value of international trade is in services because some form of intellectual property will be involved.

“Even a loaf of bread is probably made with genetically modified grain, so the grain itself has an intellectual property component.

“The moratorium on e-commerce was first introduced in May 1998 at the second World Trade Organisation Ministerial Conference (MC2) and was a temporary ban on adding new tariffs or trade barriers to ecommerce in all its forms.

“Since then the moratorium has been renewed almost every two years, but is coming under increased scrutiny due to digitalisation and the corresponding reducing in value of physical goods that can be taxed via traditional customs procedures.

“The reason is even today, many items such as films, music and news are no longer shipped as physical assets. If you fast-forward to the future seeing how far 3D printing has come today, the market for 3D printing will allow us to print virtually any part or object.

“We can already print biologicals and plastics. This isn’t science fiction. The only hurdle here is the economy of scale. At some point, most of what you need in theory could be downloaded as a pattern and printed locally.”

Prince continues: “So, when I send that design pattern electronically, how do customs agents know the true value of that good? How do you tax goods that go across the border when they’re intellectual?

“The moratorium says not to tax them because every time you implement a customs tariff, you add another frictional barrier to global trade.

“Now the moratorium is under threat. South Africa, India and a few other countries are unhappy with it and are looking to veto its renewal.

“I think in the future, as we recognise where intellectual property lies in within the supply chain, we’ll start to see the argument that less should be facing customs tariff because of the value of the physical goods.

“And more should be treated as a service that is only taxed indirectly via VAT or US Sales and Use tax depending on which country you’re in.”

2. More impact from data privacy laws

Data protection legislation has two very distinct but interwoven flavours: data flow and data localisation.

Data flow legislation restricts what data can flow out of a country and typically exists to protect personal data.

Data localisation legislation requires that a copy of any data must remain in a country even if the data is also shared (or flowed) to other countries, and may be linked to governments wanting their courts to be able to access financial, tax or other information.

Globally, data privacy regulation has been a continuous conversation over recent years as technology improves and individuals demand more control over who has access to their data.

The biggest evolution among the personal data protection legislation (i.e. data flow legislation) took place in 2018 with the implementation of GDPR across the European Union, followed by PSD2 in September 2019 and LinkedIn’s recent appeal denial in California, which let stand an August 2017 preliminary injunction that required LinkedIn to give hiQ Labs Inc access to publicly available member profiles.

More than 80 countries and independent territories – including nearly every country in Europe and many in Latin America and the Caribbean, Asia and Africa – have now adopted comprehensive personal data protection laws.

Data localisation legislation is also evolving, with one example being Australia. The Australian Tax Office (ATO) requires any system that sends high risk or high volume tax information about Australian businesses or individuals to keep a copy of the data in Australian territory or gain permission to store it elsewhere.

This is similar to legislation that has existed in Germany for many years. Russia is another example where a copy of data about individuals must be kept in Russia even if it is also exported elsewhere.

The differences in these laws may pose a challenge for manufacturers who want to store data on multiple individuals in different countries.

“If you’re responsible for managing information security, this can get expensive as your company looks to expand,” Prince explains.

“Global trends toward data protection are great for the individual but the differences in legislation means manufacturers can expect to continue to need resources to navigate through those complexities.”

3. More mid-market businesses reaping SaaS benefits

According to research from Eurostat, more UK manufacturers are investing in cloud computing services to run their software, manage customer relationships, manage their finances and accounting, and for database hosting too.

For 2020, Prince advises manufacturers to invest in predictive modelling and planning technology that integrates with their enterprise resource planning (ERP) solution.

He says: “For organisations that want to be on the leading edge, look at sales and operational planning tools. That way, you can better predict sales and account for seasonal fluctuations.

“You can define the factors that impact your sales – whether it’s weather or holidays – and link them to different scenarios to see their impact. It can be as vertical-specific as you need.

“Then you go on to the operational planning, which is what do you need to optimise fulfilment. That includes, whether it’s process or discrete manufacturing, thinking about everything you need in the process, including human resources.

“For example, if you’re in discrete manufacturing and make big machinery, you’ll need people who can install, train and maintain it. Those services would be added to your sales and operations processes as well.”

Investing in sales and operations also improves lead time planning. Depending on your business management software, you could have all the factors impacting your sales cycles in every region in one place.

This will give you a better understanding of the geographic mix of your customers and suppliers and a better perspective of what could impact lead time.

Preparing for business complexities in 2020

With factors such as Brexit, tariff wars and customer demands challenging the industry, you should focus on three areas for the fluidity needed to navigate to the future:

1. Replace legacy applications

Even if you’ve already digitised manual processes, new capabilities and functionality make now a good time to see what else is available.

Modernising applications can simplify IT and reduce the time spent on management. There are also the benefits of cloud-based applications, as explained earlier.

2. Unify operating systems and create one rich ecosystem

Streamlining an environment rather than dealing with multiple systems will reduce complexity. This also future proofs your organisation and will help your company to adopt new technologies quickly.

Look at how your company can seamlessly move data across the business and share it with your partners.

This will need a platform that allows you to draw out the insights to create the new revenue streams that point the way forward.

3. Deploy automation and artificial intelligence (AI) tools and technologies

There are opportunities to increase productivity and efficiency through automation and AI tools, and technology across all types of manufacturing. Robotic Process Automation (RPA) is already used widely in several industries.

Understanding ERP Add-Ons

Many Small Businesses depend on accounting software to organize their operations. Simple ERP solutions, with low total cost of ownership and high return on investment, offer the tools that these businesses need to get started in streamlining processes, managing business growth, and reducing costs. These solutions accomplish this by increasing visibility into company operations and laying down a procedural backbone that organizes and tracks the ongoing activities of a business.

Smaller ERP systems often depend on third party applications to deliver the complete suite of functionality that benefits a business. This can offer a good alternative for companies to attain additional functionalities necessary to run their business. On the other hand it can also lead to issues of integration and companies becoming more dependent on a variety of different providers for support and upgrades to their solution.

History of ERP Add-Ons

Not long ago, ERP was the luxury of large companies that developed systems in-house or had them customized by a major provider of ERP and CRM. Things have changed, and now many small and midsized businesses also enjoy the functionality of ERP systems. Solutions with added modules like sales, customer management, manufacturing and distribution applications, connected to the accounting-based systems, gave small and medium businesses a complete set of tools to manage operations with.

Much of this functionality was delivered by add-ons developed by third parties, bolted to the existing system, from providers with various degrees of relationships with the main ERP system provider. Add-ons provide additional functionality for companies that have already invested in expensive systems. Instead of overhauling entire information technology strategies, these add-ons could be used to support specific activities of a business unit.

Operating systems with multiple add-ons created specific problems though, particularly with data integration where applications needed to work together, and support activities like updates and upgrades. To address these pesky issues, and thanks to advances in technology, ERP systems, and the industry as a whole, are moving towards all-inclusive solutions, with modules and applications delivered by the main provider.

Integration With Multiple Add-Ons

The hardest and most problem-prone part of any ERP system is data integration. Taking data from different software applications that service independent business units can be troublesome. Data from these applications must in some way connect to the financial, accounting, and other core modules of the systems within the ERP. This communication of data between third-party add-ons and the central ERP system has to happen seamlessly and continuously. When a business’ systems do not integrate properly with its applications, it will have additional costs due to managing data in multiple databases, customizing applications, upgrades, and hiring personnel to oversee integration within all the business’ systems.

Updates, Upgrades, and Support With Add-Ons

ERP systems will get multiple updates a year, leaving add-on providers to ensure their solutions still work with the updated system, and company employees to deal with any downtime that may arise.

Issues of Add-On support can also arise. ERP systems are generally supported by third parties as it is. Providers, such as Sage and Microsoft, rely on a network of resellers that are also in charge of supporting the solutions sold to customers. This is good news for users, as resellers, like The Answer Company, normally service the solution from its beginning – implementing and supporting both the ERP and any add-on applications. The quality and degree of support offered for add-ons will be determined by the reseller’s experience with the applications. If a reseller can’t provide support for an add-on, a company is left being supported by several providers, consequentially adding to the costs of running an ERP system.

More issues arise if the company does not keep up with the maintenance of their systems. Although not advisable, companies with existing ERP systems may at one point or another forego ongoing support for their ERP systems. These companies face problems when they return the marketplace to fix, update, or upgrade their solution, along with the add-ons they have ran their businesses on, which can be difficult as these solutions advance quickly.

For companies in this situation it is worth looking at the bigger picture, and re-evaluating their system focusing on ownership costs and ongoing support costs. It may be that a better quality of software is available, with easy migration paths, at a lower cost than updating or upgrading their small business accounting systems.

To upgrade or add modules to help optimize your system so that your business is in a better position to hit the ground running next financial year, contact us for an obligation free quote today.

With Sage 200 Evolution  add-ons, you can find solutions to extend and build on all aspects of your business. 

Article credit: Sage 

A growing business needs to be supported by a robust business strategy and sufficient manpower to benefit from growth. Without that in place, you could end up making your company unsustainable and unprofitable.

Here are seven great tips to manage business growth:

Understand your business

It is vital to understand what your values are as a business. What sets you apart from the competition? What’s your differentiator?

Spend time thinking about what makes your business tick and what you’re good at it. This will help you to decide how you want your business to grow. Creating a mission statement can be useful, as it will nail down your objectives.

Set realistic goals

Be realistic about what you can achieve. If you don’t have the resources or support in place to fulfill a huge contract or order, then don’t take it on. It is better to be honest with a potential new client, rather than accept the work and do a bad job.

Set SMARTER goals:

Specific: Have a clear goal in mind. Don’t just say, “I want to increase sales and cut costs”; be clear about how much you want to increase your sales by and the areas where you want to cut costs.

Measurable: Once you have a goal, it’s important to quantify it. How many sales do you want? How much money do you want to save by cost cutting? Be clear in your objectives.

Attainable: Is the goal achievable? Do you have the tools in place to make it happen and have you given yourself enough time to do it?

Realistic: Is your goal realistic and relevant? Is there a market for it? Does it match your company’s vision and values?

Time-framed: Set yourself a specific timeframe. Work these timings into your business plan and stick to them.

Evaluate: At the end of each quarter, review your SMARTER goals and consider how you’re progressing against a financial target. You can do this using up-to-date financial information paired with business insights from your team.

Re-do: Once you’ve evaluated your progress, adjust your goal for the coming quarter by doubling down on what works and abandoning what doesn’t.

Know your growth market

Part of any growth strategy is to understand your market. Do your research and get a picture of how your customers behave and what they want. Remember, business conditions change constantly so do this on an ongoing basis. It is useful to do a SWOT analysis, where you assess your company’s Strengths and Weaknesses, and then identify Opportunities open to you and any threats you face. This will help you to establish a niche in your market.

Recruit the right people

As your business expands, you will need to ensure you have the right people around you to support you. When it comes to hiring, it is not just about plugging the skills gap; it is about recruiting people who will fit into your company’s culture.

Then, once you have a great team in place, work at retaining them, ensuring your employees feel valued and that their roles and responsibilities stay fresh and stimulating.

Move from micro- to macro-management

To grow a business effectively, you need to trust the people around you to make it happen. Growth can stagnate if, as a business owner or manager, you insist on overseeing every little detail. Allowing yourself to step back from the day-to-day running also gives you the chance to see the bigger picture to focus on business growth and development opportunities.

On the flip side, avoid being an absent leader. Employees like to feel valued for their efforts, so take the time to engage with people and offer feedback – this will make them feel empowered and boost their productivity.

Safeguard intellectual property

If you’ve worked hard to establish a brand or product, the last thing you want is a competitor swooping in and copying you – taking credit and profit for work you have done or devaluing your brand. Take time to get to grips with your intellectual property rights and ensure you trademark your product name and logo, and patent any new inventions or products. If unsure, it’s worth speaking to a legal professional.

Monitor your cash flow

A fast-growing business needs capital behind it and that means keeping tight reins on your cash flow. Good supplier management and stock control are vital – you want to free up money for growth, not have it tied up in outstanding debts or existing stock. Weekly forecasting is also essential – keep a close handle on what is coming in and what is going out of your business. New stakeholders will be much more likely to invest in your company if you have strong cash flow credentials.

Simply Asia streamlines their accounting with Sage 200 Evolution

Enzo, the General Manager of Simply Asia, talks about their business journey with Sage 200 Evolution business software.