Driving small business productivity through data and technology: In conversation with Mark Hickman

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[00:00] SPEAKER_04: Welcome to Canada's podcast. I wear a few different hats as a CFO.
[00:08] SPEAKER_02: Whatever hat CFOs like Imran need to wear, Sages, tools and insights can make
[00:13] SPEAKER_02: sure they fit. Sage helping business flow. Hi, this is Cynthia Lockery with Candace
[00:18] SPEAKER_01: podcast where we talk to entrepreneurs who are making it happen across Canada.
[00:24] SPEAKER_01: Today I'm joined by Mark Hickman, managing director of Sage in Canada.
[00:30] SPEAKER_01: Sage is the leader in accounting, financial, HR and payroll technology for small and medium-sized
[00:37] SPEAKER_01: businesses. With over 20 years of leadership experience, Mark helps empower colleagues,
[00:44] SPEAKER_01: partners and Canadian businesses, achieve growth through creativity and innovation.
[00:50] SPEAKER_01: So welcome, Mark. I'm glad that you could join us today and just give us some insights
[00:57] SPEAKER_01: in what Sage does and how it helps businesses. So why don't we start with just you giving us a
[01:03] SPEAKER_01: quick overview of Sage and the kind of company your team usually works with.
[01:09] SPEAKER_03: Absolutely. Thank you so much for having me, Cynthia. I've greatly appreciated.
[01:13] SPEAKER_03: So Sage is a 40-year-old business that started in the UK that is now a global business,
[01:18] SPEAKER_03: a very large software business. We have over 2 million customers globally. What we do is
[01:23] SPEAKER_03: provide accounting, financial, payroll and HR solutions to small and medium businesses across
[01:29] SPEAKER_03: our country here in Canada. We have a very large business with a few hundred thousand customers.
[01:35] SPEAKER_01: Wow. And what makes your accounting software different from some of the other major players
[01:40] SPEAKER_03: in the market? One of the things that we're doing at Sage that completely differentiates
[01:45] SPEAKER_03: in the marketplaces. Number one, we play in small and medium. A lot of our competition plays in one
[01:50] SPEAKER_03: of the other, but we have an ecosystem that fits all of those businesses. And one of the things we're
[01:55] SPEAKER_03: doing is we're building up what we call a digital network. With 2 million customers globally,
[02:00] SPEAKER_03: what we're able to do is take that data and wrap that around this ecosystem which allows
[02:06] SPEAKER_03: organizations to easily interface across this network, including automating simple,
[02:11] SPEAKER_03: more mundane processes for accounts payable, accounts receivable, etc.
[02:17] SPEAKER_01: Yeah, it really is about the automation that helps us small business owners.
[02:21] SPEAKER_01: That's what our play is. Yeah. So what strategies can Canadian, small and medium-sized businesses
[02:27] SPEAKER_01: implement to leverage technology effectively and drive growth in their business?
[02:34] SPEAKER_03: So we just finished a large study globally that was small business big opportunity.
[02:41] SPEAKER_03: So we pulled a whole bunch of businesses across the world, including about 12 to 1500 in Canada.
[02:47] SPEAKER_03: And what we discovered is what's facing small businesses, this increased pressure on costs
[02:52] SPEAKER_03: with inflation, which is quite worrying. So what we're seeing in the Canadian marketplace is
[02:57] SPEAKER_03: organizations adopting technology to offset these costs by using automation and streamlining
[03:03] SPEAKER_01: their digital transformation. So technology can be a bit overwhelming for
[03:11] SPEAKER_01: some business owners. So what do you see as the top reasons why Canadian, small and medium-sized
[03:17] SPEAKER_03: businesses should be adopting technology? A few things. I think in the Canadian marketplace,
[03:25] SPEAKER_03: as I mentioned, there's cost pressures, but there's also a real shortage of people.
[03:32] SPEAKER_03: As we can see, we're letting in a lot new immigrants as we try and boost our population because
[03:37] SPEAKER_03: our workforce is diminishing over time. So what we need is to automate processes to enable these
[03:43] SPEAKER_03: businesses when they can't go out and hire people. And also it frees up their people to do more
[03:48] SPEAKER_03: strategic tasks, which allows their business to grow and scale. And are there any emerging
[03:54] SPEAKER_01: technologies that you think businesses should adopt in particular to help them to grow?
[04:02] SPEAKER_03: I think in the marketplace, at the moment, what we're seeing is a big buzz around AI,
[04:05] SPEAKER_03: right? We've seen chat GPT, and everybody's getting excited, and everybody wants to buy AI.
[04:12] SPEAKER_03: I think what a lot of people don't really understand is AI has been intertwined into technology
[04:17] SPEAKER_03: for quite a while. For instance, at Sage, we have AI built into AI, and we built into a lot of our
[04:22] SPEAKER_03: platforms, by which enables organizations to, for instance, automatically read invoices,
[04:28] SPEAKER_03: and then automatically put them in the general ledger, and then automatically pay them.
[04:31] SPEAKER_03: Right, seamlessly without any human ever touching them, but that's all driven by that AI
[04:35] SPEAKER_03: technology, but it's not like you're buying AI. You're really buying the Sage accounting platform,
[04:40] SPEAKER_01: but it's got it embedded in its usage. And so we're hearing that there is a bit of positive
[04:48] SPEAKER_01: outlook for Canadian small and medium-sized businesses. What are some of the top factors that are
[04:54] SPEAKER_03: contributing to this positive outlook we're seeing? That's a good question. I think in Canada,
[05:00] SPEAKER_03: we've been almost willing to recession. We've been talking about it now, I think, for probably
[05:05] SPEAKER_03: the last year. Q4, we finished flat, which meant we weren't, we didn't go into recession. We stayed
[05:12] SPEAKER_03: at zero percent growth, and then in Q1, we actually had some growth. So I think what we're seeing
[05:17] SPEAKER_03: in the Canadian economy right now is stability, even though we have pressures such as inflation,
[05:23] SPEAKER_03: and interest rates, you know, these factors usually would push us straight into recession.
[05:28] SPEAKER_03: We've also got full employment, as I mentioned before, with the workforce that's constrained,
[05:33] SPEAKER_03: needing more people. So all these factors put together means that businesses are still bullish,
[05:38] SPEAKER_03: and are still growing in Canada, significantly better than in other parts of the world.
[05:44] SPEAKER_01: And so we know you've touched on it already. Recruitment and retention is a really big issue
[05:50] SPEAKER_01: for a lot of businesses right across the country. With the increasing demand for talent and the
[05:57] SPEAKER_01: evolving job market, how can technology help Canadian businesses both attract and retain these
[06:04] SPEAKER_03: precious skilled employees? That's a great question. A lot of people that use our technology are
[06:10] SPEAKER_03: obviously CPAs, accountants. And as you mentioned, this is an incredibly highly evolved
[06:20] SPEAKER_03: environment of skilled people that have passed their exams. And what we're seeing is like more and
[06:25] SPEAKER_03: now they're becoming rare commodities. There are very few CPAs. We actually met with the CPA
[06:31] SPEAKER_03: Association of Canada recently, and they were telling us that they're trying to actually do things
[06:37] SPEAKER_03: like invest with Hollywood to make a counting scene like a more sexy type of a job vocation.
[06:43] SPEAKER_03: So we don't have enough accountants to do the work. Also accountants want to be using the best
[06:49] SPEAKER_03: technologies on the market, right? They want to have their skills up-capped using the top solutions.
[06:54] SPEAKER_03: So I think from organizations like ourselves, it's incredibly important to deliver the best
[06:59] SPEAKER_03: solutions into market, right, to enable these people and to retain this talent for our firms and
[07:05] SPEAKER_01: businesses that use our technology. Yeah, I can definitely see that that firms that are using
[07:10] SPEAKER_01: the cutting-edge technology, it's really going to help with taking that load off of the staff.
[07:18] SPEAKER_03: Exactly, and I think that when your staff constrained,
[07:23] SPEAKER_03: taking that load off and work life balance, right, we live in a very different time now than we did
[07:28] SPEAKER_03: say 10, 15 years ago. People expect to have a work life balance. Not everybody wants to work 12,
[07:34] SPEAKER_03: 14 hours a day. So having technology take on some of those tasks to make people more productive,
[07:40] SPEAKER_03: I think is something that all organizations are looking for.
[07:43] SPEAKER_01: Yeah, and I think your talented individuals are looking for companies to invest in that,
[07:49] SPEAKER_01: those solutions for them instead of them trying to always figure it out.
[07:55] SPEAKER_03: Absolutely, that's what we saw in our study that we put out. We saw that Canadian businesses are
[08:00] SPEAKER_03: investing in net new technologies. About 48% of Canadian businesses say they will be investing in
[08:05] SPEAKER_03: technology in the next 12 months. So this is showing that the Canadian businesses are looking to
[08:11] SPEAKER_03: invest in technology to improve their profitability, but also scale and grow.
[08:17] SPEAKER_01: And can you share an example of a Canadian smaller medium-sized businesses that has effectively
[08:23] SPEAKER_01: used your company's technology to kind of overcome challenges and achieve growth?
[08:31] SPEAKER_03: Absolutely. One of the organizations that we partner with is the Canada Games.
[08:35] SPEAKER_03: So you may or may not know the Canada Games is an event that has held every two years across
[08:41] SPEAKER_03: the country that brings together young athletes to compete either in the winter or summer.
[08:47] SPEAKER_03: It varies every two years, one summer, one winter. So we've been partnering with them for a while,
[08:51] SPEAKER_03: and they were using one of our all the technologies, Sage 300, and we just migrate them to our latest
[08:56] SPEAKER_03: cloud platform, which is our intact technology, Sage Intang. And what they're able to do is really
[09:02] SPEAKER_03: streamline processes. Processes that used to take significant amounts of time now take significantly
[09:07] SPEAKER_03: less, but it really gives them the ability to run reports and analytics and really fine tune how
[09:14] SPEAKER_03: they're spending their money to ensure the success of the games as they, you know, bring together.
[09:19] SPEAKER_03: I was at one recently in Prince Edward Island, and it was incredible. There was like 20,000 plus
[09:24] SPEAKER_03: athletes. It took over the whole of PEI, the excitement, but to do that effectively, you have to
[09:30] SPEAKER_03: keep your finances in order. And using technology like that, you know, streamlines those processes
[09:36] SPEAKER_03: needs less people and delivers the reporting that they need to make sure that they're running a cost
[09:41] SPEAKER_01: effective event. Yeah, and I was involved with the BC summer games. And so I know how complex and
[09:49] SPEAKER_01: and how, you know, technology would definitely like yours would be an asset when you're trying to
[09:56] SPEAKER_03: juggle all these balls. Absolutely, it is. No, you hit the nail right on the head with that. So yeah,
[10:02] SPEAKER_03: we partner with Canada Games and we just signed a long-term agreement with them as we continue
[10:06] SPEAKER_03: to work together to ensure the success of the games. Great, I love that organization. And there
[10:13] SPEAKER_01: are any specific initiatives or collaborations your companies involved with to promote the growth
[10:20] SPEAKER_01: and success of Canadian small to medium-sized businesses in the digital area?
[10:27] SPEAKER_03: Absolutely. So we have a, you know, very, very strategic partnerships across the country,
[10:32] SPEAKER_03: people that resell our technology into their customer bases. And everything that we actually put
[10:38] SPEAKER_03: into the cloud actually runs on Amazon, AWS here in Canada, right, which is one of the largest
[10:43] SPEAKER_03: cloud providers on the planet. So we work together to ensure that Canadian organizations have their data
[10:50] SPEAKER_03: stored in Canada. They're just actually bringing up another location out in Calgary. So then
[10:57] SPEAKER_03: they'll have a backup center in Canada as well, which is unique in our space that, you know, Canadians
[11:02] SPEAKER_03: want to host their data in Canada, right? They don't want it going across into the US or other
[11:07] SPEAKER_03: places. So being able to partner with somebody like that, you know, provides a, you know, high
[11:12] SPEAKER_03: performance always on platform in Canada and being able to backup and recover that in Canada is
[11:18] SPEAKER_01: critical for Canadian businesses. So what are some of the fears and maybe it's not fears, maybe it's
[11:26] SPEAKER_01: that resistance that you see small and medium-sized businesses to make the shift to the tech,
[11:34] SPEAKER_03: the newer technology and the newer platforms? I think a lot of it is fear of the unknown,
[11:42] SPEAKER_03: right? People get comfortable in the technologies they're using. And, you know, we've had customers
[11:46] SPEAKER_03: using some of our technologies for a long time as well. And these technologies are great technologies
[11:52] SPEAKER_03: and they're easy to use. But as we saw during COVID, when everybody had to go home, the cloud
[11:57] SPEAKER_03: becomes a very necessary component, right, to doing business in 2023. And the way that the cloud
[12:05] SPEAKER_03: is evolved now to be just seamless in the way that we all work, including this call we're doing
[12:10] SPEAKER_03: on Zoom, another perfect example. I think the ability to see these collaborations and this digital
[12:17] SPEAKER_03: transformations of things like finance, but other areas of the business, HR and payroll as well as
[12:24] SPEAKER_03: you know, applications that actually run your business, depending on what kind of vertical
[12:28] SPEAKER_03: business you're in. But you know, there's usually an application, the RAP, you use to run your
[12:32] SPEAKER_03: business and then you actually manage the financials of it with a technology like ours. So putting
[12:37] SPEAKER_03: all of these things into the cloud and wrapping them makes business significantly easier to manage.
[12:42] SPEAKER_03: And I think that, but I think as we move forward more and more people will move into the cloud
[12:47] SPEAKER_03: and continue to do that. But from a small business perspective, a lot of people are comfortable and
[12:52] SPEAKER_03: they don't think they have to. But I think more and more what we're seeing is people embracing this
[12:57] SPEAKER_04: and moving with it. I wear a few different hats as CFO. Whatever hats, CFOs like Imron need to wear,
[13:04] SPEAKER_02: Sages, tools and insights can make sure they fit. Sage, helping business flow.
[13:09] SPEAKER_01: Does it seem to be generational or is it more of just of people's comfort?
[13:16] SPEAKER_03: Yeah, that's a good point. I think a lot of it is generational. I don't think you'd see many
[13:22] SPEAKER_03: Gen Zs, not embracing cloud type solutions. But I also think that what we're seeing and what we're
[13:29] SPEAKER_03: doing at Sage is we're taking some of our solutions that have been in the market for a while and
[13:34] SPEAKER_03: then we're wrapping them into the cloud. So they feel like cloud solutions. So you really wouldn't
[13:39] SPEAKER_03: realize that you're not in the cloud, right? Even though it does have a footprint on a desktop. So
[13:44] SPEAKER_03: I think there's many ways that organizations now are helping with this digital transformation.
[13:51] SPEAKER_03: You know, allowing organizations to leverage the investments they've made.
[13:56] SPEAKER_01: Have you heard any stories or any comments from people who made that leap and now they're on
[14:04] SPEAKER_01: the other side and kind of, that wasn't as scary as I thought.
[14:09] SPEAKER_03: Oh, yeah, I think that's a very good way of putting it. I think we deal with organizations when
[14:14] SPEAKER_03: we implement our technology and they come back and I can't believe that used to take me like two
[14:20] SPEAKER_03: weeks of solid work and now I can do it in like an hour. And those kind of time savings are
[14:27] SPEAKER_03: huge and it's that fear of this massive implementation that's going to take forever and it really
[14:32] SPEAKER_03: doesn't. Right? It's really more about understanding your business, understanding your processes and
[14:37] SPEAKER_03: then working with you to implement that solution that fits your business. And I think once people
[14:42] SPEAKER_03: get over that first hurdle and that's and that technology's implemented, the value of the
[14:48] SPEAKER_01: delivers to the businesses exponential. Yeah, and I think that's it. It's a lot of people have this
[14:54] SPEAKER_01: misconception that this is going to be this huge project and it's one more thing to take on and
[15:00] SPEAKER_01: I'm a small business owner and I'm already stretched. Yeah, and they don't they don't realize that
[15:07] SPEAKER_03: it's actually going to save them time, save them money and enable them to do significantly more
[15:12] SPEAKER_03: things with their finances in our case than they could do before. So I think once people
[15:18] SPEAKER_03: realize what it can do and see the case studies and actually work with the organizations and
[15:24] SPEAKER_03: implement it, it's really something that allows the biggest thing for the cloud to me is this
[15:29] SPEAKER_03: integrations into other technologies. It's not just stand alone, right? And the old days,
[15:34] SPEAKER_03: everything was kind of stand alone, especially in small business. You know, the enterprises used to run
[15:38] SPEAKER_03: big tough integration projects, but in small business, everything was siloed. Yeah, do you see it
[15:44] SPEAKER_03: right? I'm over here. You had your accounting over here. You had your HR over here. Now all of a
[15:49] SPEAKER_03: sudden, but the other cloud, you can integrate all these. They're all seamlessly connected, right?
[15:54] SPEAKER_03: So I think that having them all connected is huge for small business being able to take your finances
[15:59] SPEAKER_03: in your accounting system and then run payroll and then give T-force lips and pace lips and run all
[16:06] SPEAKER_03: your HR and your expenses and it's all seamlessly back and forth. You don't have to do anything. It's
[16:14] SPEAKER_03: I don't think people really realize just the impact that would have on a small business.
[16:19] SPEAKER_01: Yeah, absolutely because in small business and medium-sized businesses, you really got to have
[16:24] SPEAKER_01: a handle on that cash flow and you really got to have a handle on what's profitable, where your
[16:31] SPEAKER_01: money's going. Absolutely. And this seems like just a much easier way to have your on it.
[16:40] SPEAKER_03: Yeah, I think you're hinting on something again that we saw in our study. It was the cash flow
[16:44] SPEAKER_03: in Canada is significantly doing better than it is in other places in the world, which, you know,
[16:50] SPEAKER_03: says to our economic stability, but I think it also says that Canadian organizations are using tools
[16:55] SPEAKER_03: that enable them to manage their cash flow better. So I think that cash flow is king in a small
[17:01] SPEAKER_03: business. You know, you have to understand your cash flow. It's what keeps your business alive
[17:06] SPEAKER_03: in a float and leisure make investments and grow. So, you know, understanding that cash flow
[17:11] SPEAKER_03: at every stage is something that's critically important and that, you know, that's what solutions
[17:15] SPEAKER_01: like stage do. And as we look ahead, what developments or advancements in technology does
[17:23] SPEAKER_01: sage anticipate significantly impacting these businesses in the future?
[17:30] SPEAKER_03: Well, as we touched on before, I think AI is game changing, right? People are likening it to
[17:37] SPEAKER_03: the advent of the internet. You know, we live in a world now where we couldn't imagine living
[17:41] SPEAKER_03: without the internet. And AI is something that is rapidly going to evolve and it's going to change
[17:49] SPEAKER_03: the way we do things. I think it's going to in what we do for a living in that accounting financial
[17:55] SPEAKER_03: space HR payroll is going to automate those mundane tasks, those data entry tasks,
[18:01] SPEAKER_03: those bill paying tasks, those invoicing tasks, all those things that take so much time or so manual
[18:09] SPEAKER_03: in their processes and it will just take all of those away and automate them all and seamlessly
[18:15] SPEAKER_03: integrate between all of the systems as it's doing it across your business. Which will then
[18:20] SPEAKER_03: leave, I think, free up people to do the things that are most important to the business which are
[18:25] SPEAKER_03: those strategic things, right, that enable the business to grow and position itself. So I don't
[18:32] SPEAKER_03: think humans are going away, but what we see at sage is, as I said earlier, our digital network,
[18:37] SPEAKER_03: which will be this ecosystem of data that allow businesses to use sage and don't use sage to seamlessly
[18:43] SPEAKER_03: plug in and allow business to flow across all these different places. You know, if you're paying
[18:50] SPEAKER_03: your electricity bill, you're paying your gas bill, you're paying your teleco bill,
[18:54] SPEAKER_03: all of these things, whether you're a small business, a big business, if you're paying a supplier,
[18:58] SPEAKER_03: it will all seamlessly throw through the network. And it's all because we're able now to process
[19:03] SPEAKER_01: such large quantities of data in real time. And what are you most excited about in the work
[19:11] SPEAKER_01: that you do with your clients? Is there anything that really sparks you? Yeah, I think
[19:19] SPEAKER_03: in my career, I've worked at big enterprises like a sage, but I've also worked at small businesses
[19:25] SPEAKER_03: and startups. And I think there's nothing more exciting than seeing a small business do well
[19:32] SPEAKER_03: and grow. Nothing makes us happier than a sage is when a customer is using one of our small business
[19:40] SPEAKER_03: products. And then they migrate to a medium business product because they've outgrown that small
[19:45] SPEAKER_03: product. I'm showing that growth. And you know, we like to feel we had a small part in that. But
[19:50] SPEAKER_03: yeah, I think that's what drives us at sage is enabling businesses knocking down barriers,
[19:55] SPEAKER_03: which allows them to flow right on the data to flows they grow. So yeah, working with Canadian
[20:01] SPEAKER_03: organizations and seeing them grow is very satisfying for us. And there has been a lot of growth,
[20:08] SPEAKER_01: right? And is there any advice that you would give to small or mid-size businesses
[20:15] SPEAKER_01: owners that are listening today that's a good nugget they can take? Yeah, I think don't be afraid
[20:23] SPEAKER_03: of technology. Don't be afraid of change. Embrace technology, embrace change, and it will enable your
[20:30] SPEAKER_03: business. And it'll allow you to focus on the things that are going to grow your business and
[20:35] SPEAKER_03: scale your business and take away those tasks that are more manual and more meanier. And give you the
[20:43] SPEAKER_03: ability to manage your costs and your cash flow and do this in a seamless way across your business
[20:50] SPEAKER_01: and across your ecosystem of partners. That's really good advice because I know someone said to me once,
[20:56] SPEAKER_01: you know, get out of your own way, you know, get the help you need in the areas that are not your
[21:02] SPEAKER_01: expertise. So it frees up your genius in areas that is your expertise. Perfectly said, yeah.
[21:10] SPEAKER_01: So what lasting changes have you seen in how businesses leverage technology and plan for growth
[21:17] SPEAKER_01: in a post-pandemic environment? So, you know, here we are. We're on Zoom that we weren't really
[21:23] SPEAKER_01: using in 2019. Is there any other legacy pieces or changes that are positive that have resulted
[21:31] SPEAKER_03: from the pandemic that will continue? Well, I think just the way we work, I think you're hitting on
[21:37] SPEAKER_03: something there with Zoom and Teams and also hybrid working in offices, people working remote,
[21:46] SPEAKER_03: you know, how do you interact in that world? You can't go, you know, people don't go to door to door
[21:53] SPEAKER_03: and go face-to-face meetings all the time. We still do some of that and some of that is starting
[21:58] SPEAKER_03: to come back. But I think what we've seen is a complete change in technology, a complete change
[22:05] SPEAKER_03: in the way people interact. The necessity of having solutions that you can access remotely.
[22:11] SPEAKER_03: How, you know, if you can't go into the office, can you still manage your business? Can you
[22:15] SPEAKER_03: still check your financials? Can you manage your cash flow? Can you pay your suppliers? Can they pay
[22:20] SPEAKER_03: you? I think all of these things have totally changed and, you know, the pandemic was something that
[22:27] SPEAKER_03: is a once in a hundred-year type event. And I think it would be very naive to think that it
[22:34] SPEAKER_03: wouldn't change the world forever. But I think the moving forward, I think technology adoption
[22:42] SPEAKER_03: has been significantly sped up because of the pandemic. Yeah, I would definitely say and
[22:48] SPEAKER_01: some positives too, right? Yeah. So before we wrap up, is there anything else you want to share
[22:56] SPEAKER_03: with our listeners today? I would like to say that here at Sage, we're very, very excited about
[23:03] SPEAKER_03: the Canadian economy and our Canadian business. And we feel that Canada is one of the fastest
[23:11] SPEAKER_03: growing places in our marketplace at Sage, one of our fastest growing countries. And we are going
[23:17] SPEAKER_03: to continue to invest. And we look forward to working with Canadian businesses, small and medium,
[23:23] SPEAKER_03: and that ecosystem of partners. And we look forward to delivering the technology that is going
[23:29] SPEAKER_01: to enable these businesses to grow and scale. Well, I think that's great, especially as a small
[23:34] SPEAKER_01: business owner. So thank you for sharing some insights and it's really some new thoughts on
[23:43] SPEAKER_01: technology and AI and it doesn't need to be so scary. Yeah, absolutely. Thank you.
[23:51] SPEAKER_00: Thank you. Contact us at ifoatcanadaspodcast.com