Replicating the F500 Back Office: 10 Things Every Small Business Should Buy (F500 Handbook)

Small businesses everywhere are now replicating the capabilities of F500 enterprises with remarkable ease. This is especially true with respect to horizontal business functions that reside in the back office. These are functions that are dedicated to running the business itself, like human resources, finance, and procurement. Thanks in large part to the internet, the build out of these functions has become a straightforward proposition. This Brief looks at the basics of how a small business can leverage back office capabilities that have historically been the domain of the large enterprise. It’s part of series of Briefs that examine how even the smallest of businesses can build a F500 enterprise from scratch.

Here are 10 tools that any size business can use to build out a Fortune 500 back office:

1. Payroll Processing – Often thought of as a tactical function that simply allows a business to pay employees, HR can take on strategic importance when you think about how important it is to hire and retain world class talent in the early days of a business. Get payroll wrong and you will have unhappy employees, guaranteed. You can and should outsource payroll processing to someone who knows the ins and outs of a fairly arcane topic. There are a variety of options here from market leading incumbents like ADP to upstarts like PayCycle (now part of Intuit).
2. Telephony – Voice communication is critical to the success of any size business. Now, full featured phone systems are available to the small business community via hosted options from vendors like  Vocalocity and 8x8. Even advanced call center automation is now available to businesses of all sizes with services like FonGenie.
3. IT Infrastructure – There are a range of information technology investments you should make. You will, of course, need a suite of personal productivity tools and applications which are now widely available from the likes of Microsoft and relative newcomer Google Apps. Less obvious investments that you should consider include a back-up system for your mission critical data. Options here vary: for Windows users, there’s Mozy Pro; Apple has the straightforward, intuitive Time Machine; or you can get a little more advanced with something built on Amazon S3. The list of IT investments goes on… from security, to internet connectivity, to storage and virtualization.
4. Accounting Software – While not every business requires a full feature financial management solution, you should adopt an accounting package that handles basic functions such as general ledger, accounts payable, and accounts receivable. And it’s best to invest in a package that will provide more advanced capabilities such later, as your business grows. QuickBooks is the clear market leader in this space, but other vendors like NetSuite may be more appropriate if your business is growing rapidly.
5. Capital – While the current economic climate certainly makes it harder for small businesses to access capital, it’s certainly possible for businesses to more capital efficient than ever. Moreover, there are new models emerging such as peer to peer lending from websites like Prosper that provide businesses with easier access to capital.
6. Benefits – Employees now value and expect benefits to be a common part of their compensation packages. You should consider medical, dental, and 401(K) options as standard benefits that your employees will expect (note though that you should not be expected to match 401(K) contributions by employees). Companies like Trinet can manage the entire benefits process for you.
7. Marketing – It used to be that building and running a world class marketing organization required lots of money and people. Now, there are plenty of lightweight, de-risked marketing solutions available to small businesses that help with both branding and demand generation. Google is the most obvious of these, but plenty of other efficient options exist, including from companies like Facebook.
8. Website – Almost every business has a website now. While many are still stuck in the realm of brochure-ware, there are a variety of tools available for building out enterprise-class functionality such as Shopify, for building out e commerce functionality, and Bazaarvoice, for building out community features.
9. Conferencing – Online conferencing solutions now provide small businesses with the geographic reach that used to be the exclusive domain of Fortune 500 travel budgets. Citrix, WebEx, and Adobe all provide low cost, enterprise class options for conducting online meetings with prospects, partners, and remote employees.
10. Industry Specific Software – Depending upon what type of business you run, you will want to make an investment in software that automates the most complex aspect of your operations. For example, if you are a “supply-dependent” business and want to spend less more efficiently, enterprise class procurement solutions are now available to small businesses from vendors like Coupa. If your business requires personal interaction with prospects and customers, you will want to invest in CRM software from the likes of Salesforce.com or Microsoft Dynamics.

There are certainly many other things that a small business can invest in to replicate a Fortune 500 back office. Please feel free to add to this list in the comments.