Jeanette Mifsud, manager, product marketing, Winshuttle
Inorganic growth is a key survival strategy in today’s competitive marketplace. Increasingly, large, established brands are buying up smaller companies with authentic stories and loyal customers. But small companies aren’t the only ones being acquired.
The Coca-Cola Company’s acquisition of Whitbread-owned Costa Coffee for £3.9bn is progressing, and all eyes are also currently on supermarket giants Sainsburys and Asda and their plans to merge, which could see them collectively owning over a third of the UK’s grocery market.
Regardless of company size or business sector, M&A activities take place to increase market share, reduce operating costs, and achieve economies of scale. But such benefits hinge on the successful integration of physical assets, people, supply chain, distribution channels and partnerships—and something that is often underestimated—data and processes.
Many large companies run their business on an ERP system, like SAP, which typically handles everything from financial accounting to manufacturing, sales, and distribution. These ERP systems require vast amounts of data and while extremely powerful, require business users to manually enter and change data via a specialized user interface, which can hamper productivity.
Increasing efficiency with business-friendly ERP automation
Let’s take the case of where a large manufacturer acquires a small consumer-goods company. To maximise the potential of the acquisition, the large manufacturer must quickly assimilate the new product line into their business processes, so they can leverage their extensive manufacturing capacity, buying power, and sales and distribution channels. Failure to do so can negate the value of the acquisition if the fast-moving consumer-packaged goods market has moved on.
But this assimilation is not easy if launch processes are manual or inflexible, which is often the case with large manufacturers, who typically collect hundreds of data points for each product during the launch process—some of which is needed to comply with external regulatory bodies or internal policies and procedures.
The first step is to automate manual ERP processes and give people business-friendly tools like Excel workbooks or web forms that exchange data with the ERP system, eliminating tedious data entry and improving data quality. But it’s key that these automated solutions can easily flex and change to assimilate the processes of the newly acquired company—whether that be merging product launch processes or any other business process, such as procurement, facilities maintenance, invoicing, or HR.
Speeding up data migration and ERP consolidation
M&A activity presents other data challenges for large companies, including the consolidation of multiple ERP systems, which can take months or even years without the right automation solutions—even if both companies are running on the same platform such as SAP.
These data consolidation and migration tasks often fall to already overworked IT departments or are outsourced to expensive third-party resources—delaying the benefits of the new venture and reducing profitability.
One solution is to recruit business teams to help with the data management tasks by giving them Excel-based solutions that enable them to extract, clean and reload data en masse.
No longer the purview of technical IT users, these solutions can be created and executed by business users familiar with their systems and data. This business-led, IT-enabled approach can greatly speed up the data integration process and allow the new entity to enjoy many of the promised benefits of the M&A activity sooner.
Flexible automation solutions are key to fast business process integration
The ability for large companies to quickly adapt and change ERP business processes after a merger or acquisition can mean the difference between resounding success, mediocre results, and outright failure—regardless of the industry segment. If processes in either of the business entities are manual or automated with ‘homegrown’ solutions, it can take years to consolidate data and create a set of cohesive business processes—hampering growth and innovation and stifling efficiency.
Whether companies are attempting to merge production lines, financial accounting teams, or any other business process, a flexible ERP data management platform can give them the agility needed to maximise the benefits the newly merged entity and position them well for future growth and market resiliency.
THE EMOTIONAL AND FINANCIAL COST OF WORKING WITH OUTDATED TECHNOLOGY
Slow Tech Could Waste 24 Hours of Worktime a Year
In this digital age, businesses are hugely reliant on technology to get work done. And this is especially the case for one-man-bands and small home-based businesses who may count on a single computer to keep things running smoothly from their home office space.
This said, if the technology at hand is slow or outdated, it could become more of a hinderance than a help. Investing in upgraded tech may seem like a steep expense, however, delays cost time and time is money. In fact, recent research looking at the impact of tech troubles in the workplace found that delays caused by slow technology could add up to a hefty 24 days’ worth of worktime a year per person.
Here’s why keeping hold of outdated tech when its past its best could cost your business in the long run.
The biggest tech hold-ups
Delving deeper into the research, it’s evident that the most time can be lost on some of the smallest of tasks. Simply waiting for your computer to boot up, for example, can add up to 8.8 days of lost time over the space of a year (17 minutes a day), while 8.5 days can be lost to opening emails (16.5 minutes a day). Slow software has the most to answer for, however, contributing 10.4 days’ worth of wasted worktime (20 minutes a day). When you think about your own day rate or that of an employee’s, this lost time all adds up to some serious money, right? Probably more than it would cost to upgrade your tech.
Productivity can suffer too
Glitchy tech may not only cost your business time and money; productivity can take a serious hit too. According to the study, a third of workers admit losing motivation when they have to wait on tech to respond. And this comes as no surprise. When faced with freezing programmes and buffering browsers every day, frustration can build up. And when someone’s suffering frustration, productivity and motivation can drop. As a result, it may turn out it’s not just the tech that is slowing down tasks, but a reduction in employee efficiency too.
Tech expert and anti-futurist, Theo Priestley, argues that the issues caused by outdated tech at work can even have a negative effect on someone’s work-life balance and wellbeing. He explains, “not being able to complete work or feel productive or have a sense of accomplishment in a task can be a stressful experience. And depending on the nature of the work, more often than not, employees will need to work additional hours to compensate for the wasted time, which has a knock-on impact on personal and family life.”
Outdated tech can put your business at risk
Beyond the costs to your business, outdated tech can also put it at increased risk of cybercrime. The older the technology, the easier it is for hackers to exploit it. What’s more, if you don’t update your security software regularly, it won’t be equipped to address the latest security threats.
Priestley explains “outdated technology and software means easy exploitation from inside and outside the organisation. If you’re not using the latest versions of operating systems, or software that you’ve invested in, then there’s greater chance for someone to exploit known weaknesses in that system and expose or steal data or valuable company information from them.”
What is the solution?
Regularly assess what condition your hardware and software are in and where delays are occurring. If you find yourself waiting on the same problem day in day out, it’s probably time to do something about it. But how often should you be upgrading your IT equipment?
In general, a computer being used for business could do with being upgraded every two to three years for optimal performance. Alternatively, sometimes simply upgrading the memory or hard drive can help applications run more quickly. Any other equipment such as printers, keyboards, etc. only really need to be replaced when they break.
As for software, upgrade it regularly. While it can be a temptation to stick with older versions that you’ve grown accustomed to, the newer versions will offer improved capabilities, efficiency and security.
While computers slowing down over time seems inevitable and something that we’ve accepted will happen, it’s important for businesses to recognise the problem can have a bigger knock-on effect than you may think. By investing in updated, efficient technology, the savings experienced via productivity are likely to vastly outweigh the price of the tech itself. So, next time your computer freezes, perhaps consider whether it’s time for an upgrade.
OFFSHORE COMPANY FORMATION TACTICS FOR SMEs
James Turner, Director at company formation specialists, Turner Little
Starting a business brings with it its own set of challenges, as well as opportunities. But when setting up a business, the where is often as important as the how, and knowing what to expect in terms of company formation regulations and requirements is key, so you can start your entrepreneurial journey on the right foot.
James Turner, Director at company formation specialists, Turner Little, takes us through what we need to consider when it comes to offshore company formation, and the benefits it can offer start-ups and SMEs.
“Despite what the media will have you believe, there are numerous legitimate reasons to use an offshore company. Offshore companies can often provide SMEs with access to better infrastructure and legal frameworks. Regulations in different parts of the world could prove to be restrictive for businesses by preventing foreign entities from launching factories, buying property or investing in local companies. In this instance, setting up an offshore company can help in completing transactions and provide you with the ability to hold any local assets necessary,” says James.
“However, one of the fundamental reasons for setting up an offshore company is often privacy. Moving assets or setting up a business is often done in a country that offers more tightly protected data security, has a robust legal framework and a network of service providers that streamline the setting up process. Switzerland is often the country of choice when it comes to privacy, as it’s synonymous with security and data privacy. Another reason SMEs should consider setting up an offshore company is tax efficiency. Tax advantages are offered by different jurisdictions. For example, Singapore has one of the lowest corporate tax rates, while the Cayman Islands might be more ideal for freelancers who are looking to minimise the effective tax rate on their businesses,” adds James.
“Offshore companies provide SMEs with the ability to mitigate risks that arise from political instability or currency volatility. We have already seen businesses starting to register European entities in order to limit their exposure to the fallout that may result from Brexit. Whatever the reason, spreading your operations across jurisdictions may be the best long-term business strategy SMEs can adopt to secure future growth,” adds James.
Turner Little specialises in creating bespoke solutions for individuals and businesses of all sizes. The knowledge and expertise of their specialists will be able to assist with any enquires, no matter how complex.
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