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How can today's tech help with cost control?by
This summer AccountingWEB has turned its attention to different aspects of cost control. Outsourcing has come under scrutiny as a cost-saver, as has the culture of a business. Now we turn the spotlight on technology, data insight and the cloud. It’s being embraced by businesses at a rapid rate, but is it a cost saver in its own right? Christian Annesley takes a look.
In business terms, the cloud as an efficient, cost-effective enabler of better business is no longer an upstart proposition. In 2017 it has arrived.
Today, cloud services and app development are transforming IT – and particularly the way that companies approach process challenges. What’s more, businesses can go further with the cloud than simply finding and integrating the tools that will save time and increase productivity. Tech development, analytics and an integrated cloud can increasingly be used as a point of real differentiation.
But if we focus here primarily on the question of cost control, and how now-established software-as-a-service platforms sold on a per-seat basis can cut the cost of per-head IT compared with years gone by, that in itself is worth exploring.
Out with the old, in with the new
Not that many years ago, deploying new software and new processes in your business was an IT headache. Established businesses with bespoke IT needs either had to invest in a costly in-house IT department to keep pace with the company’s rolling requirements, or were generally looking at an expensive outsourced consultancy process to get just what they needed on a project-by-project basis.
Today that model of investment in IT systems is being left behind. Nearly all platforms now sit online, either as a fully-formed cloud service or sometimes sat on the company’s owned or hosted servers. And that means (among other things) that new functionality can now often be slotted in without the upheaval and the costs that were once a given.
In particular, apps in the cloud are driving a revolution in the capabilities of SMEs, levelling the playing field against the corporates and enabling start-ups and SMEs to move with a speed and sophistication that can change entire industries in a matter of months.
Digital can drive down costs
One business that can help us understand how digital is changing business, and its cost base, is the mobile innovation company Mubaloo, which develops enterprise apps and more.
Managing director Sarah Weller says: “The journey with enterprise apps tells a story. When apps first emerged – a decade ago, give or take – there was that moment when some corporates felt the understandable need to do something symbolic and create an app. It wasn’t necessarily driven by need but was more of a ‘nice-to-have’.
Some of the biggest savings can be been seen where apps have supplanted paper-based processes”
“But in the past few years, mobile and the mobile app has become a profound source of change in business, driving disruption in industries like travel and transport, and also enabling efficiency gains across the board.”
Weller says that sat behind the high-profile industry disruptor businesses, some of the most striking change, and the biggest savings, can be seen where apps have supplanted paper-based processes.
“Apps are smart and can drive improvement by being responsive and analysing the data. It means the impact apps can have compared with simple paper processes is extraordinary.”
One example of that kind of impact was Mubaloo’s app for Bristol-headquartered student accommodation specialist UNITE, which gave the company’s facilities team an app to manage jobs more efficiently.
“This was a classic productivity gain from apps. The aim was to provide maintenance staff with a tool to manage their allocated jobs, including the ability to provide real-time updates on progress, which could, in turn, be communicated to UNITE’s customers.”
The app was designed specifically to improve the efficiency of maintenance workers, reduce the number of complaints, improve the reporting of work done and help to better track and assign jobs. And it delivered, in part by using fault categories for each job completion, which allowed the engineer on site to record accurate information on the type of fault, leading to improvements in processes and work allocation.
But Weller adds it was the use of real-time information that drove the biggest productivity improvements.
“Real time has let the estates and maintenance team at UNITE plan the workforce more efficiently. This increased efficiency has grown the number of jobs completed by 30%. That’s a profound change.”
Understanding cloud services
This world of bespoke apps is, however, itself a niche when set next to the rise of the off-the-shelf SaaS services that are now crowding the marketplace.
What’s the best way for an organisation to settle on the most appropriate cloud services for its specific needs – and with the best return on investment?
In part, it comes down to matching the profile of a business to the right suite of cloud services. For a startup, an app suite that integrates well-known apps – like 9 Spokes, say – is a good option, while for larger enterprises platforms like Microsoft’s Enterprise Mobility Suite or VMWare’s AirWatch enterprise control software present a similar kind of end-to-end app-for-all profile.
“The aim of platforms like EMS and AirWatch is to manage sign-ins and apps in a controlled way, while still giving businesses the benefits of running lots of integrated apps,” says Tim Rooks, founder and owner of specialist cloud business First Class Technologies.
“In a way, they are trying to deliver – in a safe way – what some of the smaller businesses can already use with less worry.
“Next to this there are portals for the likes of Office 365, which is adding new apps and tools all the time,” he adds. “The appeal of these kinds of managed IT services is primarily to embattled IT managers that need improved control of apps and permissions across diverse workforces.”
Rooks adds that, for smaller businesses, there are lots of ways of managing a variety of apps across devices that don’t need a drop-in solution, but the enterprise control software suites are definitely fulfilling a particular need.
“It’s just that capability to control and manage what’s available to users and on what devices – and particularly switching people on and off when they join and leave a business, which is good for security and good for cost control.”
In practice – how one consultancy has embraced apps
One company that adopted software-as-a-service cloud nearly five years ago is the outsourced HR consultancy the HR Department, with more than 50 licensees of its franchise business model spread across the UK and Ireland.
Tom Doherty, managing director of the HR Department in the wider Bournemouth area, says: “We gave our IT options a lot of thought before taking the plunge back in 2012, but once we scratched the surface we knew cloud was the right answer long-term.”
The HR Department moved in 2012 to a comprehensive cloud package, using Office 365 productivity tools, SharePoint for document-sharing and intranet and browser-based email. It has added other apps since.
“We have always been committed outsourcers,” says Doherty. “We have cut costs and have benefited from a secure, future-proofed, scalable, high-uptime proposition connecting us all up.”
How Dobell cuts cost in the cloud
Dobell is an online retailer of men’s smart clothing. In the past three years it has scaled, rebranding the business from MyTuxedo and climbing from a turnover of around £2m in 2013 to £12m in 2016. Another leap in its top-line numbers is expected this year.
Keith White, editor and head of PR, says the growth experienced by the company has driven changes to back-end systems in parallel with the more public journey of the business and brand.
“Using cloud services to work smarter is a good approach for us since you are leaning on better systems, hosted and backed up elsewhere to run the business.
“For example, we use BreathHR as a cloud-based human resources platform, to allow us to manage holiday and staff appraisals, plus employee-to-employee feedback and kudos, too,” says White.
“That’s been crucial as we have grown so fast as a business that you need a means of scaling up confidently. Our headcount has been growing at 20% a year, for example. We now have over 50 staff and could easily reach 70 by the end of this year,” says White.
Alongside this is what White describes as “an ongoing switch” to Office 365, the cloud version of the still ubiquitous Microsoft productivity suite.
“Office 365 and the like have changed how IT is bought, too,” adds White. “Cloud services spread the cost of purchasing software, and also reduce the wastage of spending on dormant PCs. It already allows for more flexible remote working, which is important as we continue our international scale-up.”
What’s in the cloud?
Infrastructure as a service offers like Dell Cloud on Demand, promising secure enterprise-class hybrid cloud hosted in secured Dell data centres. Or IBM SmartCloud Enterprise, which is IBM’s public cloud infrastructure-as-a-service. IBM’s gives on-demand access to virtual server and storage resources and is aimed particularly at those with development and test activities on the agenda.
Software as a service offers like Microsoft’s Office 365, which delivers access to cloud-hosted versions of Office's server platforms, including Exchange, Lync, SharePoint, and the browser-based Office Web Apps suite. Plus analytics and dashboard app suites from the likes of 9 Spokes and many others.
Platform as a service aimed primarily at web developers looking to test in a particular programming and hardware environment.
Disaster recovery as a service offers like Zerto Virtual Replication, in which the enterprise replicates its production applications to the cloud using hypervisor-based replication technology.
Storage as a service which is often used by businesses for offsite backup.