"Amid ongoing uncertainty, SMBs have continued to adapt and innovate."
29 JUL 2021
If there is one word that sums up the mindset and approach of SMBs all around the world, it’s resilience.
Amid ongoing uncertainty, SMBs have continued to adapt and innovate. Pivoting to new business models; finding fresh ways to win and serve customers; even offering completely different propositions to meet changing consumer needs.
Add in additional administration, new legislation, staff shortages, and disruptions to supply, and change remains the only constant.
An increasing number have used the pandemic as an opportunity to invest in new technology to adapt and meet these ever-evolving challenges. Over 80% of HR leaders that we spoke to told us they wouldn’t have got through the pandemic without using cloud-based HR solutions.
Many SMBs have also started thinking more about the broader impact they can have, as the pandemic has thrown economic and social inequalities into sharp relief. Our latest research revealed that over four-fifths of SMEs (83%) see the recovery from the pandemic as an opportunity to promote sustainability.
We have recently pledged our own commitment to help knock down the barriers that create these inequalities and play our role in creating a fairer, more positive economy.
As we report strong third quarter results today, with momentum in the business continuing to build, I’ve been reflecting on the journey our customers have been on, and why it’s so important that we continue to invest in the solutions and support that will help them remain resilient and thrive through the next stage of the recovery.
Delivering change through digital transformation
Like so many other SMBs, Sage customers are showing an increasing appetite for cloud solutions – and they are reaping the benefits.
When Sage customer Arborwood Tree Care moved their operations to the cloud, it transformed their business. With Sage Business Cloud they are now managing every step of their accounting process – from quoting to invoicing – in the cloud. As well as helping them provide a better customer experience, it also freed the owners’ time to pursue a fresh opportunity. As a result, they won a contract to shred wood waste from several large building firms, which now brings in a significant new revenue stream.
For the Ford Family Foundation, based in Oregon, it was Sage Intacct that gave them the extra insight they needed to redirect funds to the communities that most needed them during the pandemic. They were also able to increase the efficiency of their Finance team by 40% and reduce the time to process grant payments by half.
Arborwood and Ford Family are just two examples of the growing trend among SMBs to digitise their business. And for those who haven’t yet made the switch, the appetite is clear. When we recently spoke to over 1,600 North America business leaders, 70% of those still using on-premise solutions said they were planning to move to the cloud.
Investing in innovation
Throughout the pandemic, we have continued to invest in innovation and strategic partnerships to support our customers’ digital transformation and remove unnecessary friction and complexity.
As the UK continues to adjust to Brexit, and the path for EU cross-border trading becomes clearer, we’ve introduced new EU VAT E-commerce functionality in Sage Accounting to help customers do better business. We’ve also added new apps to our Sage Marketplace that will enable accountants to automate processes and focus on higher value data-driven advisory services.
Over in France, we’ve joined forces with Invoke to improve how medium and large companies manage taxation, while in Spain a strategic alliance with BeeDigital will help SMBs digitise their business management and enhance their online presence. And in South Africa, we are working with universities under the umbrella of Sage Student World to migrate them to Sage’s cloud solutions and remove the high-cost barriers that prevent students accessing data.
Elsewhere, we continue to expand our AI capabilities, and have doubled the size of our Sage AI Labs team leading the work to embed AI and machine learning across the Sage portfolio. Customers are already reaping the benefits, with our Sage Intelligent Time product allowing users to log 17% more billable hours and improve timesheet submission compliance.
While creating new opportunities for many, the pandemic has also exposed and magnified societal and economic inequalities around the world.
We know that in today’s world not everyone is given an equal chance. Barriers like discrimination, bias, educational inequalities and unequal access to technology stack the odds against many people. According to the OECD, minority and women-run SMBs globally have been disproportionately affected.
We believe everyone should have the opportunity to thrive. We’ve already launched partnerships in the UK (MyKindaFuture with Jobcentre Plus) and the US (BOSS Network) to help give people the support they need to set up their own business. We are also calling on the UK government to provide the right targeted support so people can turn their start up dreams into reality and support an SMB-driven recovery. And we are only just getting started.
Looking ahead with confidence
Our strong third quarter results reflect the resilience and optimism we’re seeing and hearing from our customers. And the strong growth in recurring revenue – including 32% growth in cloud native – fills us with confidence.
By continuing to invest in new innovation and partnerships to enrich Sage Business Cloud, and in Sage's market presence and reach, we will build strong foundations that will drive further sustainable growth for our business and support the long-term success of Sage, our colleagues and millions of SMBs around the world.