White Paper: SLASH YOUR SME 1 COMPLIANCE COSTS

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1 White Paper: SLASH YOUR SME 1 COMPLIANCE COSTS Most small business owners are attempting to juggle hundreds of activities at once just to run their business day to day. Every day there seems to be more activities that they need to comply with, and many others that are important as they strive to grow their business. The old tried and true, or standard methods of using Microsoft office products like Outlook, Word, Excel and Access to handle reminders, correspondence, calculations and customer data just do not seem to be able to keep pace with what is needed today in running a small business. Many are reluctant to hire additional administration staff to deal with all these activities. With all the technology available there is a better way to do this work more efficiently. Large companies have for many years used enterprise resource planning systems to manage their businesses and keep them compliant. Developers are now building similar systems that are specifically designed for SMEs. With the advent of internet and broadband services software no longer needs to run on your own computer but instead can be run on a remote server with users able to access the services that they need. This is known as software as a service (SaaS) and it is useful for small business. The answer lies in SaaS For SaaS you do not purchase the software to run on your server or laptop but instead pay to access it using an internet browser. The advantages that SaaS provides the small business owner include you can access it anywhere in the world using many different devices new features appear in the software automatically your data is backed up automatically The added advantage is that the upfront purchase and installation costs along with periodic charges for upgrades is replaced by regular monthly, or pay-as-you-go charges which can be much easier for SMEs to manage. One example of such a service is Xero which is described as beautiful accounting software. Owners of SMEs worldwide are discovering that they can check their cash position, find out who has paid and who has not, and reconcile transactions using their smartphone while they travel into work on the bus or train, or perhaps when they have a few quiet moments while the children are doing their homework. With the bank feeds into Xero it means that you are kept up to date on a daily basis. No longer do you need the bank statements or to go to internet banking to check your cash position. Xero actually understands what running a small business is like and has transformed small business accounting. It is perhaps no surprise that it has recently been ranked number 1 in the world s 100 most innovative growth companies 2. 1 Small to medium enterprise 2 Forbes magazine May See PYXIS.co.nz

2 Applications like Xero have the potential to transform your business and slash your costs in doing so. However with the growing number of media reports of security breaches many business owners are concerned about having their data on the internet. So what should a small business owner consider before making a move to SaaS? What you need to know When looking to move to SaaS you should consider the following 1. Security - How secure is my data going to be 2. Accessibility - Will I be able to access my data? 3. Storage How much space will I need? 4. Time saved - How much time will be saved? 5. Return On Investment - Is it a good investment? 6. Mitigating risks How does this change the risks in my business? Security Security is a major consideration with all SaaS applications. SaaS companies outsource the hosting of their applications to professionals whose business it is to host. For example Xero uses Rackspace as their cloud service provider. Rackspace is one of the top 5 providers (along with Amazon, Microsoft, Google and HP) and takes care of ensuring that they use the very latest standards in hosting the SaaS and storing your data. You should check to see that the cloud service provider the SaaS uses applies the very latest security standards. Security is not just an issue with your data in the cloud, but also with the strength of the passwords you use to access your service. You only need one user with a simple password, like 1234 to make all of your stored data vulnerable to being cracked. Physical security is a significant risk to most small businesses right now, without owners being aware of it. With all your data on the server or laptop in the office this is more of a security risk than the professionally hosted SaaS applications in the cloud. Storage Different SaaS applications will need different amounts of storage so it is important to understand how much space your business needs. So ask how much you need and how much it will cost. You may find that charges differ depending on the amount of data storage that your business needs. Accessibility SaaS applications should be available at all times. In reality the application will need to be taken down for short periods at times of upgrade and maintenance which the provider will publicise beforehand, so 99.99% service availability is not uncommon. Although the promise of the paperless office has been around for the past decade or two, most SME records remain on paper and despite the best records management practice these become practically inaccessible over time. With a SaaS application using cloud based storage data is always available and much easier to find. PYXIS.co.nz

3 The final area to consider here is speed. The speed of your internet connection along with the speed of the SaaS will affect your productivity. SaaS providers generally offer a 30day trial so use this period to test the speed of the service with different devices (smart phone, laptop, tablet, and desktop) at the different locations and over different times that you may look to use it. Time Saved In considering the time savings, you should ask the following questions for your business; How much time can I save by stopping doing activities this application does for me activities may involve printing, copying, data backups, s, reminders How much time do I need to spend on new activities as a result of running this application activities may include uploading and downloading files from the cloud Another example of a SaaS application is Management-On-The-Go, or Mango. Mango is designed to make compliance easy for small business. Typical activities where time is saved include updating policy and procedure documents, reporting accidents and incidents, reviewing and updating hazards and risks, making improvements, and setting up and actioning reminders of activities that need to be done. Mango enables significant time savings to be achieved over the standard methods for maintaining compliance. Return On Investment Moving to a SaaS environment means that you shift from paying upfront for software to either a fixed monthly charge or pay-as-you-go. In a business with steady cash in and out flows this can ease cash management considerably. In calculating the return on investment for a move to SaaS you should determine what each hour of time is worth to your business. Then by counting all the hours of time savings that you make with the move to SaaS, this can be converted to a dollar return. Mitigating risk As many owners discovered during the Christchurch earthquakes, their businesses suffered when they found themselves unable to enter their offices to retrieve their computers. Often this resulted in going back to using the telephone and paper while re-building their data on replacement machines and long hours and delays before they were operating as effectively as they were previously. In stark contrast those few businesses that had critical systems in the cloud, were up and running again immediately after they fired up the browser in their replacement laptop and logged in. Small business owners are vulnerable to such events like the Christchurch earthquake which can often have disastrous and even terminal consequences. Business continuity and disaster recovery form part of the risk management strategy for any company including SMEs. Company directors are ultimately responsible for managing risk, often having significant influence in moving critical systems to the cloud as part of an overall plan to reduce business risk. For example small business owners involving dangerous occupations such as forestry or construction workers may well decide it prudent to have their health and safety management systems managed in the cloud by a SaaS so that they can with confidence be sure that they meet the OSHAS and AS/NZS 4801 health and safety management standards. PYXIS.co.nz

4 What to look for in a compliance SaaS Ideally when looking for a SaaS application to manage compliance within a small business, the owner needs the following; One integrated system for handling compliance requirements System compliant with recognised national and international standards (e.g. ISO 9001, 14001, OSHAS 18001) Ability to define accident, incident and improvement workflows Integrated method for managing hazards and business risks Document and records management Human resource management Plant and equipment maintenance Event management to provide timely reminders Minimal effort to administer the system Cost effective compared to the standard methods Quick response to support requests There are a number of SaaS applications available. Many of these applications are strong on document and records management, or safety management, or risk management, or handle accidents and incidents, or preventive maintenance. Very few are aimed at small business and integrate the compliance issues that face an SME today. Mango Mango is one service which does fulfil the requirements an SME needs. Mango integrates accidents and incidents, audits and inspections, events, documents, human resources, improvements, plant and equipment and suppliers all into one SaaS. Unlike many offerings, Mango charges a regular monthly fee and this provides access to its entire integrated system. Typically a part time Mango administrator can manage the system for a business of up to 30 staff and maintain management system certification to recognised international standards such as ISO 9001, ISO and OSHAS The system sends timely reminders to staff to take action and files records appropriately. This means that as business owner you no longer need to think about when the car is due for its next registration, or where to find the health and safety meeting minutes, or whether the staff training records are up to date, or whether the fork lift drivers are currently licenced, or when the next fire drill is due, or what complaints were received from customers last month. It is not uncommon to find that a small business owner can free up 50% of collective staff time when moving to Mango from the old standard methods. For a small business this often means that the work can be shared among several existing staff thereby avoiding having to employ more people. One of the most common comments we hear business owners that switch to Mango say is that they sleep easier knowing that their business is under control. PYXIS.co.nz

5 Summary Cloud services offer reductions in overall costs, and increases in efficiency. This frees up people and/or increases capacity with the potential to have significant impact for SMEs. There are a number of SaaS applications available that take advantage of one or more of these factors. However it is up to each business owner to carefully consider their own business before deciding which of its existing systems should be moved to the cloud. Despite coverage in the media, the levels of security and compliance provided by the cloud often exceed those of even the largest corporation. With care the advantages of a correctly chosen SaaS for your small business can have a major impact. Applications like Xero and Mango have the potential to transform your business by taking care of compliance and slash your costs in doing so. More importantly this can free you up from dealing with compliance issues so that you can take care of activities that will grow your business such as leading your people, planning and building customer relationships. Michael is a seasoned business excellence professional, certified Mango partner and owner of PYXIS Consulting. He may be contacted at michael@pyxis.co.nz. PYXIS.co.nz