By Seth Bailey
Technology affects every business, no matter its size. This isn’t exactly a news flash, but it’s true now more than ever. And since knowledge is power, entrepreneurs and small business owners should keep watch for new technologies and the advantages they can bring to their businesses. Let’s take a look at some of the technology terms that small business owners need to understand this year.
5 Crucial Tech Terms for Small Business
1. Cloud Hosting
Many companies pay relatively large fees to lease a server so that they can store relevant files in a central location, making them available to any employee in the company (so long as they are on-premises). Until the last few years, this was the only option for business owners who wanted to keep their files safe and centralized.
Cloud hosting accomplishes the same goals as an on-premises server, but instead of storing all your files locally (e.g., on a server at your place of business), all your data and documents reside in a secure sever located on the Internet. You and your employees can access your company documents from anywhere, at any time. And perhaps most importantly, cloud hosting can be significantly cheaper than leasing a server—and the cost associated with its maintenance and security.
2. Hybrid Clouds
Once you’ve decided to use cloud hosting or cloud-related services for your business, how do you know which ones to invest in? There are three types of clouds you should understand: private, public, and hybrid. Private clouds come with a high amount of customization and privacy, but are often prohibitively expensive for small businesses. Public clouds are often cheaper, but have notable security issues. This leaves us with hybrid clouds.
Hybrid clouds combine the best qualities of private and public. They can be just as cheap as public clouds, but they still offer your business better privacy. Many public cloud providers now offer off-the-shelf hybrid cloud options—an appealing choice for small companies with limited IT staff to engineer their own. Small businesses looking for cheap storage and other cloud services should consider putting a hybrid cloud on their IT shopping list.
E-invoicing is a system that collects all invoices into a central location and makes them accessible to parties on both sides of a transaction. E-invoicing automates many of the intermediary invoicing processes between a vendor and customer; this reduces the effort required of your accounts payable department and also saves money you would spend on administrating paper invoicing.
Restructuring your entire payment system can certainly cause a few headaches, and the upfront investment may seem like a lot of money, but the overall savings are well worth it. Your Days Sales Outstanding (DSO) will vanish very quickly. And, as with any paperless solution, your company becomes greener by adopting e-invoicing.
4. Customer Resource Management (CRM)
CRM solutions take a lot of pressure off your sales and marketing teams by managing interactions with customers and potential customers. CRM programs have been on the market for more than a decade now, and you’ll find a wide variety, but the core idea is this: CRM centralizes your data on each customer and automates certain processes according to individual need.
This one-to-one aspect is what makes CRM special—it reduces the errors that can ruin a relationship (such as typing the wrong name into an email or forgetting to check in at the right time) at a scale far beyond the normal capabilities of a small business sales force.
CRM software can help small businesses in other ways too, such as recruiting. In a small business, every person hired has a big affect, so it’s crucial to bring in the best fit. CRM can be used to track prospects efficiently, just as your sales team tracks interactions with customers. It’s a good way to maximize the hours you spend looking for job candidates and the value of your CRM software.
5. Enterprise Resource Planning (ERP)
While ERP might sound like a big-company tool, it can play a crucial role in small business as well—especially companies with sizable amounts of data. Business owners can use an ERP system to view and manage disparate company and department data—including human relations and marketing—in one central location. This data updates automatically and often in real-time.
When you need to make crucial decisions, a good ERP system shows you how your choice will affect each department in your company. ERP software makes it easier to keep your company agile, as it shows every department what the others are doing, and it encourages fluidity rather than rigid structure. Since small businesses often have to work fast and loose in order to survive, it often makes sense to install an ERP system.
Not every business needs—or has the budget—to purchase every technology available to them, whether it’s ERP, CRM, cloud services or e-invoicing. However, technology offers the best the opportunities to scale your business today. Take the time to educate yourself on what’s out there, what’s coming soon, and what makes the most sense for your business to stay ahead of your competition.
Seth Bailey, the CEO of Digity and iTOK, is the proud father of three girls, an avid outdoorsman and an entrepreneur with 18 years of leadership experience.
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