How modern business management technology tools

How modern business management technology tools in the cloud take you from a reactive management, where you react late to what happens to your business, to a proactive management, where you anticipate the needs of your company.

https://www.edulane.ng/
https://www.edulane.ng/

Sometimes managing an SME becomes an almost impossible task. For the entrepreneur, it would even seem to be necessary to multiply: exit to find new customers, receivables portfolio to collect cash, to placate the providers who constantly call to collect, manage an inventory of references which do not rotate, and, of course, to find strategies to beat the competition, which gives no relief.

How to “multiply” is not an option, entrepreneurs recognize the importance of relying on technology to eliminate manual labor and be able to be effective in an environment where multiple fronts exert pressure on us. But with all that technology has changed in the last 3 or 4 years, how do you know which is the best technological option to make a business more efficient?

This article is intended to be a short conceptual guide on the type of approaches available to make a more efficient business through technology. We summarize them in three.

1- Reactive Management

He operated with the technology provided by my accountant. Let’s start first with a sketch of the most basic but still most common option for “technifying” an SME.

When a company grows, it needs to be formalized and pay taxes, so for many entrepreneurs, the first software with which their business or entrepreneurship “interacts” is that of their accountant. However, the degree of interaction is distant, since the software is not used directly by the entrepreneur, much less by the staff of his company. On the contrary, to generate a balance sheet or income statement, a retroactive process occurs through which the business operations are reported to the accountant at the end of the month, so that the accountant or his accounting assistants proceed, through debits and credits, to record sales, purchases and other business transactions in an “accounting software”. In turn, the accounting software generates summarized financial reports such as a balance sheet, an income statement, a portfolio statement and a cash flow, which are delivered to the entrepreneur after the end of the previous month.

We would like to note several aspects present in this modus operandi:

The software that is being used to support the company is purely an accounting software and not an ERP software or a comprehensive management software that also helps to manage the operation of the business. In other words, accounting software is limited to issuing reports and contributes little to making the day-to-day management of the business operation more efficient (it does not help, for example, to improve the speed of service at the counter, to collect a better portfolio, to rotate inventories better, etc.).

More seriously, in most cases the SME entrepreneur does not have direct access to the accounting software being used, since such software is used only by the accountant and resides exclusively in the financial advisor’s office. Therefore, the entrepreneur has scarce and infrequent information, which is not available at the time he needs it most.

For the above reasons, we call this operation scheme as Retroactive Management – or in other words, with this type of approach the company is managed based on what has already happened in the past. After all, the entrepreneur receives information about his business on rare occasions (usually only once a month), he receives it late (he receives financial reports from the previous month a couple of weeks late), he receives little (extremely summarized basic financial statements that do not easily allow delving into details) which limits his ability to react to the environment. By the time the entrepreneur notices that there is a problem, perhaps the problem has already become serious or the possibility of taking advantage of a market opportunity has been lost.

2- Active Management

The company decides to acquire a “management software” that is installed at home and allows you to control the operation.

This scenario somewhat improves the management capacity of a company. To reach him, an entrepreneur or entrepreneur begins to notice that receiving monthly financial reports is not enough for him to operate efficiently. Thus, he realizes that he needs a software that facilitates the management of his day-to-day and allows him, for example, to invoice more efficiently, control his portfolio better, guide him in the management of his inventory, among others.

In addition, he realizes that he cannot depend on his accountant every time he requires basic information to manage the day-to-day running of his business.

At this point many entrepreneurs choose to buy a “traditional” business management solution. By this we mean the administrative or managerial software available in every Latin American country, which have been around for a long time and offer an application that can be “installed in the business”. The last point is important: most of these solutions are installed under client/server environments. This means that the user requires a computer or a local server, placed in his office, in which he installs and uses the software.

The positive thing about this approach is that:

The software that is being used goes beyond an accounting system and begins to act as an operational solution for the company.

The software is “integrated”. This means that every time a sale, a purchase, or an inventory movement is made on the platform, all the ”modules“ of the software communicate with each other, update each other, and record the transactions in the accounting, generating updated reports ”in real time”.

Through these more complete platforms, the entrepreneur, for the first time, can control the activities of his company in a structured, organized way, and that saves the transaction information for consultation at any time. In addition, the entrepreneur can consult the reports he needs to understand what is happening in his company and react to the environment.

However, there are certain disadvantages of opting for a traditional platform installed “on site”:

Traditional on-site installed software can only be used when the entrepreneur is in the office. Many entrepreneurs to be effective stay “mobile”, which disconnects them from the systems and information of their company.

Traditional administrative and management software tools are vulnerable to damage to a local computer generating losses of critical information (when lightning strikes that burns a computer, for example, all transaction history, accounting reports, historical customer data, etc.) can be lost. Of course this can be solved with backups and proper maintenance to local computers, but all this entails an additional cost.

Traditional tools are “transactional”. This means that they support the entrepreneur to generate day-to-day transactions (sales, purchases, inventory movements). However, many times they fall short in providing the entrepreneur with information of “insights“ or ”critical tips“ or ”alarms” about everything he should do at that moment to improve the performance of his business.

For all the above, we think that traditional administrative packages, although they go beyond pure accounting software and are ultimately very useful, fall short of what other Modern technologies offer.https://www.edulane.ng/

Within our framework, we could say that traditional administrative software allows an “active management” of the business, since they enable the entrepreneur to take action and control his most common processes. Put another way, these tools allow you to manage the business with what is happening in the present.

However, this type of software still does not have the necessary technology to anticipate the most critical thing that a business requires, or at least not easily. Why? To detect the most pressing the entrepreneur is forced to generate dozens of reports and study them one by one, which takes time and can not always be done. In other words, the software operates the business, which is positive, but it falls short in being the intelligent assistant that we all dream of that anticipates what we should do, without us having to start looking for “a needle in a haystack”.

3- Proactive Management

The company acquires a Modern software platform, which uses the power of the cloud to keep the entrepreneur connected with his company at all times, and provides him with tools and information that allows him to operate his business and anticipate the most critical needs of his day to day.

Nowadays, the most advanced tools for an SME reside on the internet (or as it is commonly called, they reside “in the cloud”). The cloud is a set of advanced and powerful servers that operate applications of all kinds, allowing them to be used securely from any browser or mobile device.

There are several advantages for an SME when selecting a cloud business management software:

Immediacy: An administrative software in “the cloud” can be consulted from anywhere, even through mobile devices.

Economy: Cloud solutions, also known as SaaS (Software as a Service) solutions, are purchased as a service. This makes them flexible and economical, as they are paid in monthly installments and many times they can even be suspended at any time. https://www.edulane.ng/

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