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Back-end to the future: Why back-office tech will drive scale-ups to success

By Romain Gauthier, Customer Officer, SAP EMEA North

A new era of businesses is incoming: unicorns and rising stars. In their current state, they are known as scale-ups. Often defined by annual returns, number of employees or levels of funding, what really unites these, typically tech-focused, businesses is their impressive expansion and promising upwards growth trajectory. The UK alone is home to 33,860 scale-ups, contributing £1 trillion to the UK economy annually. 

These businesses are at a critical juncture and scale-ups have not escaped the negative impact of Covid-19. Yet, The Future of Growth Capital Report, created by Deloitte, Innovate Finance and the ScaleUp Institute, highlights how important these scale-ups are to aiding the UK’s post-Covid economic recovery. However, while the report details their important role in boosting regional economies, productivity and innovation, the reality is that they’re facing a £15 billion shortfall in funding.

Despite ongoing challenges, the global pandemic doesn’t need to be the downfall in their prosperous journeys and rapid growth. In fact, we believe unlocking future potential lies in embracing a more sophisticated way of approaching back-office solutions as these businesses reach a crucial point in their growth trajectories.

Laying foundations for continued success

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Over the past few years, we’ve seen many of these businesses thrive and find their way into the lives of people up and down the country. The likes of Oddbox have pushed forward with their mission of keeping the nation healthy with sustainable vegetable subscription boxes; fintech scale-up, Plum, has allowed consumers to understand how they spend and budget better; elsewhere, social app, Peanut, has connected thousands of mothers across the country to share their experiences.

There’s no denying, scale-ups are becoming a crucial part of so many different people’s lives, whether consumers or businesses. But, to support the next chapter of their story and continue on the path to profitability, they must refocus when it comes to back-office solutions. 

It’s understandable that scale-ups typically rely on the more basic of business tools, with some teams potentially still calling on the support of programmes like Excel or freemium-type tools. But for increasingly complex tasks and operations, we often see that these tools have a limited scope, functionality and scalability and can quickly become a glass ceiling more than a support for growth.

While these back-end solutions aren’t typically perceived as the sexiest aspects of running a fast growth business, they are becoming more important; particularly for businesses of this calibre. From our observations of the market, solid financial structure, the ability to expand internationally in a matter of days, end-to-end employee management and real-time visibility over business KPIs, amongst other aspects, are what can really determine a business’s future.

But why does it all matter?

For scale-ups, approaching back-office solutions in a more sophisticated way is critical for three key reasons. Firstly, while focusing on selling the product, raising money and hiring the right people has got scale-ups to where they are, attention now needs to turn to running the business once these milestones are reached. What we have seen in the market is that maintaining tremendous growth is best achieved when the foundations are built on robust back-end solutions. 

Secondly, to reach the next level, understanding what is happening in the business in real-time has been proven as a real differentiator. We have seen companies where it takes upwards of three weeks to provide things like sales data due to unfit solutions that were outpaced by fast growth. This can make fast decision-making near impossible and ultimately prohibits implementing critical changes when required. Dynamic back-end solutions will provide the power of rapid decision making and help companies to steer their business based on data.

Last but certainly not least, as these businesses look ahead to further investment, or even greater IPO ambitions, a certain level of structure and data insight is key to make a compelling business case for investors and venture capitalists. This is only afforded through technologies that can provide accurate data with clear traceability. Fit-for-purpose back-end solutions will help bridge the gap between potential and clear profitability.

Embracing the support network

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Although the benefits of more advanced back-office solutions are clear, scale-ups have seen them as somewhat aspirational due to cost and integration barriers. This is no longer the case and providers, like us, are here to deliver this much needed access in order to power the businesses of tomorrow, today.

As Europe’s largest tech company, and as the inventors of ERP (Enterprise Resource Planning), we knew it was our duty to make our world-class solutions no longer just a pipedream for scale-ups. Seeing reports that highlight scalability and the ability to attract talent as key reasons why European tech scale-ups are failing, we knew we needed to support our fellow European businesses and rising stars. This is why we have launched our Grow by SAP initiative; a programme designed specifically for scale-ups that provides all the essential back-office business requirements, from finance, to procurement, project management, core HR and business analytics with fast implementation schedules. The programme includes commercial incentives, up to 6 months of productive free run as well as dedicated customer success teams. We are committed to fostering long term technology partnerships so we therefore want to provide all of the support we can.

We already have all the solutions to solve these problems, and solving problems is what we do. Therefore, we just needed to connect the dots between our products, initiatives and people to create a programme that truly adds value to this exciting group of businesses.

From financial planning and streaming to socialising and vehicle hire, scale-ups of all kinds are the future. We see that, and so does the rest of the world. This belief, paired with our suite of cloud-based, automated and scalable solutions, means that our doors are wide open for the businesses of tomorrow, and we have all hands on deck to help drive scale-ups forward to reach long term success.