3 Ways Cloud Software Can Reduce Business Risk

Thousands of UK businesses are missing out on an immense windfall of operational and commercial benefits from the Cloud. It’s a well-known fact that many companies hold back from using SaaS solutions for fear of data security and loss. But the elephant in the room is this: most are already tacitly accepting more immediate and arguably more real risks. It’s time for a more balanced approach to evaluating the benefits.

1. Commercial risk

Let’s think about a typical, basic sales process: in practice (and be truthful now) how much admin time (and therefore overhead) goes into ‘tweaking’ standard proposals or quotations for customers, preparing contract documents and – most costly of all – chasing the signature?

This sort of behaviour introduces costly delays to losing sales, with knock-on effects to cashflow that small and mid-sized businesses can ill afford. My bet is that many turn a blind eye to it, and actually tolerate situations where work begins before contracts are signed, perhaps more often than they would care to admit.

It’s a huge commercial gamble and evidence for it will be found in disputed invoices, change requests and rework – all of them hitting both cashflow and the bottom line. And yet the concept of automation is not new. Cloud-based CRM systems proliferate among the exact same sorts of companies who appear prepared to take this risk.

Firms who find themselves in this predicament should now be looking to the Cloud for ways to automate the admin components of their sales processes – like getting Statements of Work, estimates and contracts out the door on time, sending scheduled reminders, and even capturing sign-offs online so they can be easily tracked, documented – and the commercial risk eliminated. It amazes me that so few companies seek the safe harbour of online signing. It’s over a decade since it was formalised with legal standing by EU Directive 1999/93/EC.

2. Compliance risk

And to pursue the theme of regulation: compliance is an increasingly critical factor across the economy and not just in traditional regulated industries. Now, almost every industry has a regulator ready to trip you up. We are regaled with ‘Health and Safety gone mad’ tales every week.

The employment sector as a whole is becoming especially risky with an explosion of regulations, including the Agency Worker Regulations and Right To Work. The danger for employers large and small is that failure to comply can lead to massive fines.

The UK Border Agency can fine companies up to £10,000 for EACH illegal worker. And as we know, governments are broke – so they’re likely to seize every opportunity to take money from you. And guess what: since clamping down in 2008, UKBA has issued civil penalties of over £50 million on employers of illegal workers.

It’s a complex, confusing and onerous landscape for employers and staffing agencies alike – and easy to find yourself in breach, with potentially dire consequences.

Inexperience and a lack of expertise could be deadly. Businesses turning to contractors to stay agile and keep headcount costs down are particularly at risk. As are firms in sectors with a high throughput of temporary and migrant labour – such as food and entertainment, construction and healthcare services.

Sophisticated, cloud solutions could well offer a fast-track to introducing systematic rigour around candidate on-boarding, reference and background checking and auditable record-keeping. What would you give for that, if you suddenly find yourself needing to defend a claim?

3. Operational costs

We recent polled around 1,700 office workers on the time they spend ‘sorting paperwork’ and it averages almost 45 minutes per day. Over the course of an average career, it adds up to 10 months – the gestation period of a blue whale. Less frivolously, that’s around 2% of your salary costs right now being spent on note-taking and ticking boxes.

In this day and age, using human capital for such low-value activity is borderline irresponsible. The main issue is the colossal opportunity-cost loss: people could and should be doing something much better – selling more, developing new capabilities, and spending more time with customers. SMEs are probably most at risk and least able to deal with this ball-and-chain on productivity.

Control of basic business processes can be expensive and wasteful, and it’s easy to see why. Hampered by a lack of investment in processes, manual administration grows like Topsy , messy and confusing workflows develop that erode efficient hand-offs between teams – and permit individual leaders too much latitude to build contingency into their own areas to the detriment of the whole operation.

But cloud solutions exist that enable automation of process-management, giving team-leaders the freedom and control needed – and can slice out a whole layer of manual documentation. This not only increases efficiency and productivity, but also comes without the pain of having to devise and implement custom process controls. That’s good news for everyone, unless you happen to be in business to reinvent the wheel.

In all these ways, self-service tools from the cloud may offer businesses a rich seam of ways to deliver improvements that managers are under pressure to find, yet struggle to deliver on shoestring budgets – and so de-risk the business from pre-existing inefficiencies that may already be jeopardising stability and profitability.

Many organisations I meet know they are beset with audit trail issues around contracts, the ever-present spectre of compliance, and a dungeon full of dodgy admin workflows. My question is this: if you realise this, how often do you stop to think about your real exposure to everyday risks? If you haven’t, that’s what you should be looking to the cloud for. The silver lining is that it has all manner of answers to help you deal with big questions.

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Ben Stoneham is an expert in Cloud, SaaS and Technology service business models. As CTO of a cloud solutions business and a director of NowWeComply, he is the architect of two successful cloud software solutions and specialises in business strategy and technology start-ups.

  • Thanks for a great article, I think you’ve highlighted a really great benefit of CRM for businesses. The tracking of client data and relationship development helps to minimise risk. As client information can be shared across the company through CRM employees can interact with clients in a more confident manner and make more informed decisions.

  • Thanks Ben for a great read. Lately there has been a lot of talk about the benefits of social CRM but there is not nearly enough on the benefits of CRM to minimise risk. CRM helps to correlate information that is shareable amongst employees providing better communication.