As businesses look to do more with less, find efficiencies, scale and manage the ever-changing business landscape, more and more are outsourcing some aspects of their accounting and finance functions to make up for a shortage of skilled accountants, driving demand for cloud-based services. Marc Monday, VP, Global Strategic Partnerships at Sage, details the opportunities this fast-growing segment offers to resellers
The conversation around ‘skills shortages’ or the ‘war for talent’ has focused predominantly on IT, with businesses struggling to find new developers or data scientists, but it doesn’t end there. Businesses are also struggling to recruit qualified accountants, particularly those who can help drive cloud adoption and make the best decisions about digital investment. There simply aren’t enough skilled accountants to fill those roles. This is a universal issue across all levels of businesses, but the SMB segment is really beginning to feel the impact.
As a result, we’re seeing more SMBs switching their focus to business outcomes and BPO outsourcing. This has been exacerbated by the mass utilisation of public cloud services, driven by businesses moving workloads into the cloud and adopting cloud-native capabilities. This includes finance and accounting, as businesses automate standard processes and adopt new platforms and services. That’s not to say businesses can survive without an accountant or finance department. Far from it, they’ll have a resource in place – whether in-house or external, physical or virtual – and that is driving demand for resellers, to deliver solutions that match these new customer requirements.
The SMB opportunity
Further opportunities are borne out of the fact that the SMB market is so large and diverse. In the UK alone, the Federation of Small Businesses estimated there were 5.5 million small businesses at the beginning of 2021. It would be safe to assume that number has risen considerably despite the pandemic, given the trend towards ‘the great resignation’ and the compulsion among professionals and ‘wantrepreneurs’ to kick start their own business empires.
The market is ripe for resellers and channel partners that have the right cloud-based offerings and the capabilities to scale and meet the requirements of everyone from micro businesses to small and medium-sized businesses. The beauty of SaaS and cloud-native software nowadays is that the same types of solutions can be sold across the board to practically all those business segments.
SMBs are also open to new payment models, based on recurring fees. The cloud consumption model based on usage is very popular with SMBs, it fits in with their budgets and operations. These are fast growing businesses, and they want agile solutions that can grow with them, able to use tools and platforms that can scale to suit their needs as they expand and take on new responsibilities.
New insight from Sage also sheds some light on SMB requirements. Coming out of the pandemic it has become apparent that more and more and businesses have invested in technology to underpin operations. More than half of businesses became more reliant on technology coming out of the pandemic, while around a fifth adopted new technology to improve operations. This trend is set to continue with another 44 per cent set to invest more in technology over the next 12 months, with a view to becoming more profitable and to saving valuable time.
The evolving channel ecosystem
So, the opportunity is there, but there are several challenges that resellers need to address before they can take full advantage of the situation. One of the biggest challenges facing resellers is the need to transition their business model and capabilities into the SaaS and native cloud domains, so they’re equipped to support their existing customers’ cloud migration journey.
Resellers are faced with the task of having to continually transform their business model at a rapid pace. They need to work closely with partners and even vendors to find the expertise, tools, resources, and enablement they need to innovate. Crucially, they need to work with partners and vendors that will help them to identify and source the tools and solutions that SMBs are in the market for.
The channel ecosystem is changing, creating new opportunities for resellers at all levels, regardless of whether they’re VARs, SIs, MSPs or ISVs. Smaller businesses require everything from basic bookkeeping apps to payroll services and tax returns, whereas medium-sized businesses
are looking for more sophisticated accounting, payroll and HR solutions or managed services that can integrate with other business processes, even sales and marketing. For resellers, it’s now a matter of finding a digital marketplace where they can access solutions and partners that provide the best fit for their customers. While at the same time taking advantage of the chance to grow and diversify their portfolios.