Greek writer and philosopher Sophocles once quipped that "quick decisions are unsafe decisions". For the best part of 2,500 years, that might well have been true. However, today, we work in a world where small businesses can make big decisions both swiftly and accurately, thanks to the data, tools and resources we have available.
Imagine negotiating on a price for your goods with a client. Having immediate access to the current margin, the most recent foreign exchange rates for the raw materials you need and current stock levels (among heaps of other insights) is the only way to make an accurate, profitable and fair offer.
In the past, it would have taken time and effort to come up with the information - the client may have even gone elsewhere in the meantime - but now, the potential exists to have real-time information at a small business's fingertips, meaning they can provide answers quickly. At least that's how it should be.
The good news is that things have changed significantly over the past couple of years - and they're continuing to do so. Access to digital information is not restricted to large corporates anymore, thanks, in part, to the introduction of affordable cloud software and the connectivity it provides.
When we look at cloud accounting tools, such as Xero, not only do they offer an increased level of efficiency, these platforms provide a business owner access at any time and from virtually any location, which has given small businesses an unprecedented ability to be on top of their financial performance.
But when we talk about useful information, we don't just mean the financial kind - that's only a small part of the full picture. Businesses have the potential for immediate access to the information around their supply chain, productivity, sales pipeline and profitability - to name a few.
While the adoption of Xero and similar platform's has really helped New Zealand business owners, over the next two to five years, we're going to see small businesses making use of data sets people never thought would be available - let alone to small businesses.
Data ranging from weather information and its relationship to businesses revenue to tourist numbers to a region and their spending habits. These large sets of external data about the market and customers will increasingly make owners feel like in 2016 they were driving blindfolded.
Companies will increasingly be able to access information around costs in their business compared to their industry and location, customer patterns when walking through their store and data driven predictions that this information will underpin. Even the interest they are paying on their funding will be benchmarked against similar businesses.
These are just a few examples, but this increased level of transparency will have a huge impact on the ability to make highly informed decisions in next to no time.
Most small to medium-sized businesses are aware of the difference reliable information can make. The trouble many have is accessing it in a timely fashion. The data may exist, but where? Or more likely how do I access it?
Cloud-based solutions have certainly helped to provide the visibility decision-makers need, and its constant development is allowing smaller businesses to increasingly see relevant data in a singular place that can be accessed by all stakeholders and business advisers in a heartbeat. That's one of the reasons why we launched PwC's Next: to give more visibility to owners, stakeholders and their advisers of key business data. This has helped transform the traditional tax compliance relationship into something far more future-focused and proactive. Gone are the days when you accountant will call and ask "how is business?" she will already know and will be calling to suggest you take some extra foreign exchange cover because your US sales have spiked this week.
In New Zealand, where cloud accounting penetration is the highest in the world, we're in a great position to benefit from data's imminent explosion available to small and medium businesses.
So sorry, Sophocles: it turns out quick decisions might be the best option for fast-growing businesses.
Scott McLiver is a PwC Partner and has led the development of the firm's new collaborative cloud platform, PwC Next.
References
http://read.pwc.com/i/698172-data-driven-big-decisions-in-the-intelligence-age
http://www.pwc.co.nz/publications/gut-gigabytes-capitalising-on-art-and-science-of-decision-making/
