A new business model, new objectives, new reports, new accounting system, new accountant, everything came together according to Business Analyze founder Einar Gynnild.
“In traditional accounts models, there is only one type of measurement that counts. But with a pay-as-you-go model, that’s no longer the case. A totally new set of measurements and KPIs are needed,” so says Einar Gynnild, a man who knows a bit about analysis and the move from traditional business model to pay-as-you-go.
He was co-founder of Business Analyze in 2002, a Norwegian BI company supplying analysis and reporting tools to enable companies to not only define better objectives and forecasts, but also to realise them. 14 years later, he started over again.
“We launched our cloud solution in 2016, although we’d actually be selling the software since 2002. It was like starting the business all over again,” he explains.
Business Analyze went from a simple, predictable, but not very flexible business model, to suddenly selling ‘software as a service’. They went from having customers to having subscribers able to choose between various packages and products. Some had to be invoiced every month, others quarterly, biannually or annually. Complexity suddenly became greater and the need for more customised routines and tools became apparent.
“We got our cloud marketing just right, and after launch, it really took off. But the traditional ways of doing things no longer worked for us, neither our points of measurement nor the ERP system,” states Gynnild.
“The pay-as-you-go economy applies certain limitations as to how to control a business. A customised foundation has to be in place, which makes new demands of how the structure is set up,” explains Nils Bernhard Nilssen. Nilssen is CEO at Tandem, the new accountancy bureau used by Business Analyze.
“This is a transition that many companies go through when switching from a traditional business model to pay-as-you-go. Liquidity in particular becomes a problem for many companies. There’s no doubt that it’s a demanding translation that requires iron discipline to handle the ongoing commitments,” continues Nilssen.
The CEO of Business Analyze goes on to say that he took the advice of his accountant seriously.
“We have implemented several new routines and processes, as it’s important to keep on top when growing at the rate we are. It all costs money! The advice and help we got have been invaluable to us. We’ve become totally dependent on the model we have in place now.”
Gynnild explains that Tandem had helped to set up self-supporting practices able to handle invoicing to end-customers, and sales commissions to the company’s dealers. This setup was crucial for dealing with the transition to the new business model, and subsequent growth according to Gynnild.
Succeeded with new business model: Nils Bernhard Nilssen of Tandem (on left) with Einar Gynnild of Business Analyze.
Act on facts
“It all starts with invoicing, we have to ensure that we get paid. And our Tripletex accounting system, which Tandem also know well, makes it all very simple. Pay-as-you-go invoicing for example, with automatic sending of invoices means that everything runs automatically. But what’s just as important is that the system gives us access to a huge amount of data through an open API. This lets us download our accounts figures directly into our own analysis and visualisation tools. When we combine them with the data from other sources, such as from the CRM system, we get even more insight, and we can make decisions based on facts. We get an accurate picture of the business, which makes it easy to impose secure control. Such solutions are what we do, but we also needed it,” explains Gynnild, before showing me several dashboards with accounting data, targets and forecasts.
“That’s fascinating,” I say. “We say ‘Act on facts’, and here we can see forecasts and expectations based on facts, as the data actually comes from the source – the accounting system. It’s there, in Tripletex, that we find actual status,” says Nilssen.
“Pay-as-you-go accounts that are continuously active are the bread and butter of Business Analyze, but they also want to see what they can expect in the future, of course. By using their own solution in this way, they can use the accounts figures to see into the future, not just the past. They can see current status, potential sales and probability calculations based on updated figures and CRM data, and use this management tool to make better, more informed decisions,” says Nilsson.
Changing accountants or accounting systems is perceived as time-consuming and risky by many executives. This was also the case for Gynnild at Business Analyze.
“We needed someone who knows our type of business, but a switch was far from top of my list. I thought it would be an enormous job changing the entire way we work. These are matters you can’t mess around with, regulatory matters that simply have to be correct. And that’s exactly the risk we were worried about. But it’s actually not a big risk. Everything’s much simpler than it has been, and it was no real problem,” he relates.
Nilsson agrees: “Many people see making such changes as a very high threshold to get over. But in fact, it’s really fascinating. Regardless of how dissatisfied some people may be with the way they currently do things, they still think that a switch is sufficiently risky to make it worthwhile to do nothing,” says Nilssen, who explains that the transition was accomplished without affecting the running of Business Analyze at all.
“We held a planning meeting, and then a start-up meeting, and that was about it. So in actual fact, there was no threshold! We’ve gained better control and overview, and are now completely dependent on the way we work. My only regret is that we didn’t do it before,” says Gynnild with a smile.