Small businesses that use cloud-based software to support critical business functions make more money than those that are not in the cloud, according to new research by Exact and Pb7 Research.
The research found that 51 percent of US small businesses use some cloud software, with 29 percent using three or more packages. "These heavier cloud users have reported stronger business performance compared to firms who use two or less cloud-based software packages. Companies surveyed who are embracing the cloud achieve 25 percent additional growth, while doubling their profits," the report said.
US small businesses use the most online business software compared to their peers in France, Germany, the Netherlands, the U.K. and Belgium. The UK closely trails the US as having the second heaviest cloud usage among small businesses, with 47 percent of small businesses using some kind of cloud software, and 27 percent using three or more online software packages.
While switching to an entirely new platform can seem daunting, the research found that the top reason small businesses are making the leap to the cloud is for security, resting easy that their data is backed up, secured and hosted by their cloud provider.
Following security, small businesses choose cloud to lower IT costs, reduce maintenance requirements and gain the ability to access their business applications via mobile devices anytime, anywhere.
However, those who use cloud software have found ease-of-use, enhanced ability to find and share information and increased productivity as the top benefits actually experienced.
Small manufacturers surveyed experienced a 19 percent revenue growth in 2014, and expect to experience a 21 percent revenue growth in 2015. Even alongside this promising business climate, several business challenges still keep small manufacturers up at night.
Customers are more demanding than ever because they can be. They are savvier and cognizant that they have plenty of options when it comes to getting the goods they need at the price they want. When choosing a manufacturing partner, customers often consider cost as their first and foremost concern. Producing competitive prices, however, can be challenging for small manufacturers when factoring in the cost of doing business. 53 percent of small manufacturers
report cost reduction as their biggest business headache.
Wrong cost estimates for contracts put further strain on the bottom line, with 9 percent of all contracts resulting in a negative margin. Small manufacturers also walk away from 11 percent of all RFPs because they are unable to deliver a quote in time, signaling a missed revenue opportunity.
Alongside cost reduction, 48 percent of manufacturers report finding new customers as one of their top three business challenges. With 27 percent of customers not coming back when a delivery is late, manufacturers can agree that finding new customers to replace churn is imperative.
“Smaller series” orders can also have a detrimental business impact. The research shows that 52 percent of manufacturers find their biggest challenge with smaller batch orders is keeping production costs low, followed by getting the pricing right (42 percent).
Lowering IT costs, security and enhancing more productivity and efficiency for the end-user are the top three reasons small manufacturers choose online business software. While the research shows that heavy cloud users are more profitable, just 26 percent of manufacturers always want to have the latest technology in place, which includes both cloud-based software and other innovations.
The manufacturing industry is once again experiencing growth, but that doesn’t mean it’s time to sit back with a sigh of relief. To remain competitive, the research underscores that small manufacturers should focus on ways to modernize their technology systems to put themselves in a strong position to reap the benefits of economic recovery.
Cloud-based business software is providing small manufacturers automation capabilities previously only available to larger manufacturers. The cloud allows users to get a full view into up-to-date business information like stock levels, job status and material prices so accurate quotes can be provided, true inventory levels can be understood and managed and deliveries are made on time. All key business systems, like CRM, financials and production, can be integrated and automated in the cloud.
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Updated Date: Oct 05, 2015 13:21:24 IST