Webinar recap: Adopting cloud ERP as a platform for sustainable success
As a business expands, it can outgrow its familiar operational environment.
July 20, 2022
As a business expands, it can outgrow its familiar operational environment. This might mean finding a larger office for more staff, or new warehouses for more inventory in a physical sense. It can also mean transitioning away from old systems and processes that can no longer cope for financial management.
In our recent SmartCompany webinar, host David Adams was joined by panellists Ethan Nyholm, CEO, STM Brands; Jason Toshack, VP and GM, Oracle NetSuite ANZ; and Sholto Mcpherson, journalist and editor, DigitalFirst.com. The panel discussed how and why businesses can adopt enterprise resource planning (ERP) software to manage core business processes through a fully integrated system that covers financials, CRM, ecommerce, inventory and more. Particularly, by using a cloud-based ERP rather than on-premises (which requires a company to maintain the service’s hardware and servers), a business has the ability to scale, work seamlessly across international borders, and easily coordinate departments.
Breaking points and making the switch to ERP
While scaling a business is a positive step, it isn’t always straightforward. Sholto Macpherson has seen that overreliance on spreadsheets can be a real breaking point having spent his career talking with CFOs and financial teams. “One sign that you should look at moving to an ERP is excessive use of Excel,” Macpherson says. “If the CEO, Board or anyone in the C-Suite wants to look at a report and they have to put a request into the finance team and wait for someone to pull all of that information together, that is a sign that you can be served much more efficiently by a better system.”
For Ethan Nyholm, expanding operations into the US and UK reaffirmed the power of using a cloud-based ERP platform like NetSuite. “We got to a stage where we wanted to do a consolidated balance sheet or to figure out where the business was on the whole became extremely difficult and extremely time-consuming,” Nyholm says. For STM Brands, the breakdown occurred when trying to consolidate business across multiple time zones, currencies, and tax jurisdictions, without the software to support it.
To learn more about the difference between basic, traditional accounting solutions and a complete financial management software, check out this business guide, titled: Beyond Bookkeeping: Five Ways to Scale Your Business with the Right Financial Management Software.
Data consolidation and streamlined processes
At NetSuite, Jason Toshack has seen how consolidating processes with Cloud ERP software — like finance and inventory management — can remedy the growing pains noted by Nyholm and Macpherson. “You’re consolidating in a single business application,” says Toshack. “That helps these businesses to make quick decisions because they know instantly what the health of the business is, and if there’s a particular change that needs to be made, they can make that change based on the current information.”
The real-time data access and consolidation has meant that doing business, even across international borders, has become much more streamlined than with entry-level software. “We operated two separate systems before we moved to NetSuite for each region,” says Nyholm. “So, one system for the US that ran the US operations and business and finances, one system that ran Australia, and there wasn’t any way for them to communicate with each other. You couldn’t get a clear picture of how the business was doing on a global scale. With NetSuite, what it enables you to do is very quickly open a subsidiary that has its own currency, its own forms, its own address, and shares all the backend. You’re not duplicating everything and then have people see it all, so they get a global picture.”
Hybrid work and responding to change
Cloud-based ERP software has proven to be a vital addition to businesses beyond just finance. With the upheaval of lockdowns and a growing trend towards a hybrid working model, having a single source of truth has been essential. “Those businesses that were still running on-premises systems, and then all of a sudden had to work from home really suffered,” says Toshack. “So, we’ve seen a massive increase in companies move the cloud way up the priority list for their businesses.”
For Nyholm, having implemented cloud-based software several years ago meant the agility to respond quickly to dramatic change. “That transition between home, office and back home for us was natural,” Nyholm says. “That was one less thing that we needed to deal with, and it enabled that remote workforce to be a lot more flexible in terms of their work habits.”
Ideas for businesses making the switch
For businesses that have yet to make the switch to ERP software, it is never too late. While small-scale accounting software can be quite workable, they aren’t built to scale with a business the same as ERP software. “The question that small business owners want to ask themselves is, how big do I want to get, and how fast do I want to get there?” says Macpherson. “Ultimately if the answer is, ‘I want to build a big business and sell it as a profitable business and want to do it in as short a time frame as possible’, then when are you going to move to ERP? Because you aren’t going to get there without this.”
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