Powering Tomorrow, Today
The next few quarters will be make-or-break for many scale-ups. On paper their prospects might seem better than those of others, they have made it past the critical initial set-up phase but are still able to operate in a highly agile way, but regardless, no one has escaped the impact of Covid-19.
Feedback we have received from the market highlights the very real challenges facing many rising scale-ups due to the pandemic, with reports suggesting a funding shortfall of up to ￡15 billion. A record number of technology start-ups have sadly had to file for administration since the start of lockdown, many of whom were on the verge of reaching scale-up stage. Hailed as the future for so many industries and as the catalysts for change in the world, these newcomers’ potential now hangs in the balance. We can’t let this happen and must do all we can to equip these businesses to continue on their path to success.
The UK alone is home to 34,000 scale-ups, contributing ￡1 trillion a year to the UK economy and making up half of the SME economy. Beyond their financial impact, they are also some of the most purpose-led and socially-mindful businesses – set up to support the ways society is changing and making our lives easier. Look at how scale-ups like Monzo came to the support of many in financial need during the pandemic with interest rate caps and loan payment breaks. Fintech scale-up, Plum, has allowed consumers to understand how they spend and budget better. Elsewhere, social community app Peanut has connected thousands of mothers at a time when becoming a parent has I’m sure felt incredibly isolated. These businesses are beginning to underpin the lives of so many and it’s crucial to support the next chapters in their story.
As Europe’s largest tech company, and as the inventors of ERP (Enterprise Resource Planning), watching the challenges that high growth businesses are facing was a wake-up call for us at SAP. We realised we needed to do more to support them. Intelligent technology suites like ours have often been seen as aspirational for scale-ups, which of course should not be the case, so we’re adapting our approach to make our world-class solutions more widely available.
To that end we have launched Grow by SAP, a cloud technology programme for scale-ups. It’s designed specifically to provide these businesses with their essential back-office requirements with fast implementation schedules and minimum up-front financial risk – from finance to procurement, project management, core HR and business analytics.
How will this help? The simple answer is that understanding what is happening in your business in real-time is proven to be a real differentiator. Dynamic back-end solutions help companies to steer their business based on data which can be transformative. For example, we have seen companies where it takes upwards of three weeks to provide things like sales data due to unfit solutions. With the right solution you can see what’s happening in real time, enabling rapid decision making and the ability to implement critical changes.
Using tools trusted by enterprises is a shift to longer-term thinking. Initially, start-up leaders’ necessary focus is on selling their product or service, raising money and hiring the right people as the key factors to sustain growth. However, once those goals are reached, they need to be able to evolve and pivot from an ‘in the moment’ mentality to a scalability mentality. More basic business tools like Excel have limited scope and functionality and can only take a business so far. Scaling and attracting talent are areas that European tech scale-ups have been seen to fail and intelligent technology suites are integral to solving or avoiding these problems entirely.
Furthermore, in order to move to the next stage of development – to further investment, or a potential IPO, for example – a certain level of structure and data insight to provide clear traceability is required to make a compelling business case for investors and venture capitalists.
With our new programme, we are providing a bridge to introduce scale-ups to the tools that have helped solved problems for our existing 440,000+ customers in 180 countries, but we know that scale-ups are presented with different challenges to the typical SAP customer. As such, we’re taking a collaborative approach to working together, and even looking closely at the way we function as a business ourselves to better partner with these types of organisations. They are the businesses of tomorrow, fuelling economies and powering our lives. For them, we will connect the dots between all our products and initiatives to create a programme that truly adds value to their exciting endeavours.
Europe has one of the most exciting scale-up communities, disrupting industries from money transfer to streaming. To ensure they continue to flourish, it is our duty to sustain their hypergrowth through offering solutions that will underpin their future success. Powering the back-end with cloud-based, automated and scalable solutions will be the key to attracting the talent and investment required to propel these businesses towards achieving their potential. We are excited to see what the future holds.