The United States has the most advanced technology services industry in the world. According to Financial Times, Silicon Valley groups occupy the top five spots among the world’s most valuable companies. The industry accounts for 7.1% of U.S. GDP and 11.6% of U.S. private sector employment. There are approximately 388,000 software and IT services companies in the United States, of which more than 99% are small, medium and micro sized firms. These firms operate in a mature, stable market which has a reputation for producing reliable and effective solutions that accelerate rapidly to the marketplace.
The opportunities for small and medium technology companies have broadened considerably as enterprises in every industry sector look to technology to facilitate their own transformations. However, in order to leverage the opportunities to the fullest, small and medium technology companies must look for ways to transform their own business models to accommodate shifting customer demands. Small and medium technology companies today strive to provide proactive, forward focused, technology-based solutions to their clients that will help their client's business become more efficient and grow to the next level. Yet these same companies struggle on some of the critical challenges facing them that hinders further growth of their own business.
This article provides an overview of three critical challenges that small and medium sized technology companies need to address to successfully carve their path towards growth:
Challenge # 1: Access to limited, inaccurate or delayed financial information:
In this ever evolving market landscape timely and accurate financials are critical to the success, or failure, of technology companies today. Large technology companies can afford to invest in the latest data analytics tools and platforms, however for small and medium technology companies, capital expenditures on such platforms is difficult to justify. As a result, small and medium technology companies struggle to gain access to timely and accurate financial statements and business intelligence insights that can help them predict and prepare for disruption rather than just reacting to it as it happens. Lately, there is a trend towards small and medium technology companies partnering with experts who can offer them timely and accurate financial statements through a subscription pricing model that empowers the management to significantly control the business direction and achieve its vision.
Challenge # 2: Retaining skilled workforce & talent:
Technology companies invest heavily in talent development. On the other hand, it can be extremely challenging for these companies to find the right talent at an affordable price and then also be able to retain that talent long term as well. As a result small and medium technology companies are looking for ways to tap into a resource pool that goes beyond the boundaries of their own organizations. As a result, an ecosystem is now forming that fosters collaboration with third party service providers who can help small and medium technology organizations to eliminate routine mundane repetitive tasks which then enables their employees to focus on the more strategic initiatives of the business. This re-focus for the employees helps to create a motivating career path for those employees which leads to long-term, loyal employees for the company.
Challenge # 3: Coping with increasingly burdensome regulations:
New regulations and changing government policies such as IFRS 15 Revenue from Contracts with Customers, makes it increasingly difficult for small and medium technology companies to timely change their processes. As the regulatory environment is unlikely to become less complex, therefore, technology companies will need access to tools and resources that enables them to adhere to both new and existing regulations.
Addressing these challenges is critical yet is a daunting task! So, what is the best way forward??
In these circumstances, it becomes critical for small and medium technology companies, to partner with industry experts who can help them become more efficient and profitable by utilizing financial tools, systems and processes designed to take their business to the next level.
Quatrro has over 24 years of experience in providing cost-effective, reliable and insightful accounting & payroll services to the technology industry. Quatrro has helped thousands of clients to automate and streamline their financial functions including Financial Reporting, Accounts Payable, Accounts Receivable, Reconciliations, Sales Tax, Payroll and HR which have resulted in improved visibility into the financial health of their company. We have a team of accountants with a depth of knowledge and experience in financial processing for the technology industry that can help your company focus on benefits that go far beyond simple cost reduction.
If you are a small or medium sized technology Company and want to reap the benefit of our extensive experience helping technology companies similar to yours gain access to real-time, granular visibility into their business, please contact us