Three Ways Digitalisation Can Help SMEs

By Cheryl Clifford, Head Of Professional Services for UK at Amazon Business

The last two years have thrown up all sorts of challenges for businesses across the board. From supply ch ain disruptions to cash flow issues – it has been a rough ride, particularly for small and medium sized businesses (SMEs) who make up 99% of business organisations within the UK, employing over 60% of the population. With the global pandemic creating unprecedented situations for working, questions arose about the longevity of businesses as, more often than not, these organisations were working with other similarly sized organisations facing similar issues.

Two years on, the situation is still turbulent. At such a time it’s crucial for SMEs to control rogue spend and focus on saving costs. The solution lies with the purchasing teams who can help create value and accelerate business growth. How can they do that? By introducing or amplifying the technology solutions in their organisations that can help fast-track accounting and streamline administration.

Here are three important areas that technology can help simplify:

Budget management

Budget management is a tool that allows purchasing teams to maintain the controls and guardrails they require while empowering their buyers with greater purchasing authority. Growing businesses rely on this type of technology because it offers the ability to assign budgets to individuals or teams and give them the freedom to spend in a controlled manner.

The procurement team gets to choose what budget amounts are visible to buyers within the organisation, so they can make informed purchasing decisions on channels that are easily trackable.

Moreover, instead of multiple manual orders, this can all fall under one PO, which decreases the amount of time spent auditing purchases. Budget management also allows businesses to use Control Checkpoints like pre-purchase approvals, all carried out digitally to reduce the dependency on manual processes.

Automating buying policies

By creating some basic rules and structure around purchasing requirements, it becomes easier for employees to follow company rules. And automating buying policies is an ideal way to balance employee empowerment with purchasing controls laid out by the business.

Flexible policies can be created to identify preferred products or preferred sellers to solicit approvals for orders over a specific spend limit, and similarly businesses can choose to restrict sellers or block purchases from certain categories.

This solution makes it easy to adhere to organizational mandates, while still giving the employees the freedom to search, and the autonomy to buy the products they need or prefer.

Take the case of our customer Nugent Care as an example. Nugent Care is a 140-year-old charity in the Northwest of England. Founded by Father James Nugent in 1881, it was originally an organization to help homeless women and destitute young people.

The charity carried on the good work of its founder into the 21st century, now providing services that take care of people from the beginning to the end of life, and every stage in between.

It is no surprise then that they have a wide range of complexities when it comes to the processes they have in place. When I spoke to Nico Battastini, Head of Governance: Data Systems at Nugent Care during the last Amazon Business Exchange, he said: “What really helps us is having a centralized platform where we can do a lot of our procurement from. It’s easy, it’s streamlined, and we can keep an eye on what people are buying, when they’re buying it, and in what quantities. This obviously helps us to save money, and every penny that we save can then be put back into the charity to improve the lives of the people that we serve.”

Speaking specifically about how technology has helped streamline their accounting processes he said: “We used to have a lot of credit card spends. A lot of individuals would spend money in various different places, either in the community or online, and then we’d have to either reconcile the petty cash or reconcile the credit card invoices, and it would take a long time for our accounting team to be able to process all of that. So having a centralized platform that handles a lot of the heavy lifting means that our staff at the front are able to do what they do best, and our staff in the back end are able to support them in new and better ways.”

Analytics and data-driven insights

Once purchases are complete, approved and shipped, businesses can keep track of trends and spotlight areas for improvement through the analytics and data-driven insights provided by the automated platform they use. These insights will help identify top spend categories top spenders, spend from preferred and restricted items, and spend from diverse supplier bases.

This information can be used to define better buying policies to guide purchasing track records across spending goals and discover ways to reduce costs. Businesses can save time compiling recurring reports by using ready-made reports and dashboards.

According to a Forrester study commissioned by Amazon Business, over 70% of small businesses in the UK, Germany and France plan to accelerate the transformation to digital. As small businesses rely more on technology, traditional processes need to transform and adapt. As the last two years have shown us, digitalisation is the need of the hour, and integrating technology across all teams within the business is a great way to flourish and grow.