Research Shows Small Businesses that Embrace the Cloud Can Double Profit

Small businesses who embrace the cloud achieve 25 percent additional revenue growth compared to cloud skeptics and more than double their profits, according to new research from Exact and Pb7 Research.

The report, “Small Business Cloud Barometer 2015,” examines the business challenges that small wholesale distributors, manufacturers and accountants face on a daily basis, reasons for moving to the cloud and the business benefits gained once online business software is implemented – both in the U.S. and in Europe.

The research found that U.S. small businesses use the most online business software compared to their peers in France, Germany, the Netherlands, the U.K. and Belgium. In particular, 51 percent of those surveyed in the U.S. use some kind of cloud software, and 29 percent use three or more cloud applications to help run their businesses. Security is the primary reason U.S. small businesses choose to implement online business software, followed by hopes to reduce technology costs, lower maintenance requirements and gain easy mobile access to critical business information. However, those who use cloud software have found ease-of-use, enhanced ability to find and share information and increased productivity as the top benefits actually experienced.

“Cloud usage among small businesses is exploding thanks to the tangible business value it has been proven to deliver,” said Kae Williams, general manager at Exact, U.S. Cloud Solutions. “With heavy cloud users reaping more profits and business growth than their cloud-hesitant peers, there’s little room for doubt that now is the time to use online business software. Cloud is no longer just for large enterprises – it’s for any company who wants to be competitive, efficient and provide stellar customer service.”

The Small Business Cloud Barometer 2015 drilled down into the top business challenges and cloud usage habits and benefits among small wholesale distributors, manufacturers and accountants. Key findings by industry from respondents in the U.S. include:

Manufacturing

53 percent of small manufacturers report cost reduction as their biggest business headache
9 percent of all contracts results in a negative margin
27 percent of customers don’t come back when a delivery is late
Small manufacturers walk away from 11 percent of all RFPs because they are unable to deliver a quote in time, signaling a missed revenue opportunity
Lowering IT costs, security and more productivity and efficiency for the end-user are the top three reasons small manufacturers choose online business software
Only 26 percent of manufacturers always want to have the latest technology in place, which includes both cloud-based software and other innovations

Wholesale Distribution

Price pressures due to online competition, competition from suppliers due to direct sales and dealing with demanding customers are the top three challenges unique to the wholesale industry
12 percent of wholesalers report regularly having one of their suppliers run out of materials, and nearly half sometimes have delayed deliveries directly due to supplier inventory issues
30 percent of customers will not purchase again from a wholesaler who was late with a delivery
Only 17 percent of wholesalers get automatic alerts when stock is low and just 47 percent know the exact location of every item in the warehouse
28 percent of wholesalers have real-time insight into the stocks and delivery times of suppliers
The top reasons cited for implementing cloud software include security, low maintenance requirements and lowering IT costs

Accounting

Top general business challenges cited include cost control, finding new customers and improving the quality of products or services
45 percent of accountants emphasize a focus on quality in an effort to stay competitive and relevant in their industry
The top three reasons small accounting firms move to the cloud include lowering IT costs, enhancing security and reducing technology system maintenance
Only 33 percent of accountants are using cloud solutions for administrative processes, with the rest still using on-premise administrative solutions
23 percent of accountants rely on a combination of loose software applications and spreadsheets
Just 12 percent of accountants use their CRM system to gain a 360-degree view of their customers

Research Reports

All three industry reports are now available for download here:

Small Business Cloud Barometer 2015 for Manufacturers
Small Business Cloud Barometer 2015 for Wholesale Distributors
Small Business Cloud Barometer 2015 for Accountants

Research Methodology

As commissioned by Exact, Pb7 Research, a global technology research firm, conducted nearly 3,000 total interviews of small businesses with less than 50 employees in Belgium, France, Germany, the Netherlands, the United Kingdom and the United States. 750 interviews were conducted with U.S. companies in February and March 2015 via a web-based panel.