WHETHER IT’S A new accountancy practice or any other type of business, the ability to pursue rapid, profitable growth is essential for any company that’s just starting out. As such, start-up businesses in all sectors will typically face many of the same challenges, such as the need for a sound business plan, adequate funding, and positive cash flow.
Unfortunately, the pressures of dealing with these vital business areas can often mean that decisions about IT are left until later.
But all modern companies will need to have IT solutions in some shape or form, whether it’s to address their basic business requirements or to deliver more advanced capabilities that will help to set them apart from the competition.
For all of the reasons mentioned above, the careful integration between your business plan and your IT infrastructure will be key to your success. Putting the appropriate time and effort into developing a sound IT strategy as part of your early-stage business planning will also help make sure that any investment made in this area is money well spent.
If IT planning is left too late, not given enough consideration or not integrated with the business plan effectively, it can cause you some serious problems down the line and could compromise your entire business plan. This problem is especially acute
for start-ups, since they – unlike their more established counterparts – will need to predict what challenges and opportunities may crop up in the future and what IT solutions may be needed to address them.
Not only that, but as a new entrant to the accountancy market, start-ups also need to carefully balance operational needs with customer needs. In addition to the day-to-day running of the business, IT will also be an essential tool in supporting sales and marketing activities, as it can help with attracting and interacting with customers more effectively and to create an online presence that fully supports and encourages customer engagement.
Regardless of the size or complexity a new business, it will need to consider what services need to be provided to its staff, partners and clients right from the start in order to develop an IT strategy that will support its overall business objectives. For example, maybe it will want to provide external users, such as partners and clients, with access to an online portal for secure communications, data sharing or self-service? At the same time, it will also need to think about the company’s internal IT needs, such as email, file storage, printing, IP telephony and remote working.
Once the business has decided on the particular services it wants to provide, it will also need to consider whether (and how) these systems will be able to interact with one other in order to support the company’s key business processes most effectively. Capacity will be another issue to consider here, as the company needs to decide what level of demand its IT systems are likely to face, not only when it first starts trading, but also over the next few years.
When it comes to financial data, regulations can often be very strict – and yet likely to change at any time. As such, a start-up needs to think about how it is going to comply with industry regulations and what effect this will have on its internal policies, procedures and systems. After all, the need to comply with the latest industry regulations may flag up additional requirements for the company’s IT systems, as well as certain constraints on how they are designed, delivered and maintained.
Having a good understanding of these issues right from the beginning, along with an idea of how they are likely to develop in the future, will be key to making sure that IT systems have been designed to operate in a way that is compliant with regulatory guidelines.
For example, some firms may be tempted by the often-hyped cloud computing model, but will this give them enough control over their data? Other firms may outsource some of their IT functions. But, can they be sure that their suppliers are compliant with the relevant industry regulations?
Even with compliance issues aside, will large customers be comfortable with this set-up when the time comes to choose an accountancy service provider? All of these scenarios can be addressed with the right IT choices, but it will be more cost effective and efficient to get these decisions right from the start.
Controlling IT costs
Many times over the years, we’ve seen how the inability to control IT costs can ultimately lead to a business meltdown. One big problem is that a lot of firms focus solely on their first-year costs – but that’s just planning for failure.
Instead, companies should be considering what will happen two, five or even many more years down the line and ask whether its IT systems will cope with the growth that it is planning.
Firms also need to view IT as a potential differentiator. In that case, it will be essential to have IT systems in place to maximise efficiency, automation and self-service. With this approach, it will be much easier to control overheads.
Even though expenses may be tight when first starting up, that doesn’t mean it’s a good idea to skimp on IT expenditure. Of course, it may be tempting to cut corners here and there (not least of all because investors will often be keen to limit expenditure in the early stages of a firm’s development), but this will ultimately prove a false economy, as savings now may lead to significant expense later, especially if the IT infrastructure isn’t flexible enough to scale up and match future success.
David Ballard is CEO at IT consultancy firm Northdoor
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