The small steps and major changes needed to create a digital economy for all

Headshot of Steve Hare, CEO of Sage

The small steps and major changes needed to create a digital economy for all

Steve Hare, CEO of Sage, on the investments, incentives and interventions needed to drive transformation and growth

3 minute read

“If you are not participating in the digital economy over the next few years you won't be in the economy. Because it is all going to be digital.”

That’s the warning delivered by Steve Hare, CEO of Sage, who says whatever other challenges organisations face in the short-term they must remain focused on building the technology skills and capabilities needed for longer-term growth.

That is easier said than done. It will require a combination of in-demand skills and investments in technology at a time when companies are guarding their cash. But Hare says it could be accelerated by the creation of more favourable business conditions, from changes in education to bolster the talent pool to the incentivisation of digital investments and easier access to finance for businesses.

“For businesses, there are major tax incentives for capital expenditure,” says Hare. “I live in Yorkshire and you can always tell when there’s been a good harvest, because everyone gets a new combine harvester, to get their capital allowances. But with digital most of the investment is not capex, it’s opex. You’re investing in a completely different economy but the tax system doesn’t incentivise that.”

Rethinking the role of education, particularly the teaching of STEM subjects, would also help drive long-term economic growth.

“I’m a trained accountant, but when kids ask me what they should be doing, I say study computer science or data science.”

“But it’s not about just telling them to study. It’s about inspiring them and exciting them about the reasons why, helping them understand the opportunities and careers that will be open to them and the contribution they’ll be making.”

It also doesn’t mean students must do a degree course. 

“We hire a lot of graduates, but not everyone wants to go to university for three years, particularly given the cost. That’s why apprenticeships are successful. You come straight out of school, you get paid and you get to learn. It’s this type of thing the Government should focus on more and the private sector will help because we can bring smart people in and train them in a more focused way.”

Apprenticeships are not only helping Sage develop a stronger pipeline of talent, they also play a role in helping the company meet commitments to diversity and social mobility. And while finding talent to develop and deploy technology remains a problem for many businesses, technology can also provide a solution.

“We have technology backed up by artificial intelligence with the potential to automate workflows and repetitive tasks. That’s freeing up smart people who understand their business. And what we’re seeing is companies retraining and redeploying those people to address skills needs and use them on tasks that add greater value.”

“We’ve got customers of all sizes around the world and these benefits are relevant to all. If you’re the finance director of a mid-sized family retail business in Ohio, automating the monthly close can cut hours of people’s time that can be redeployed on thinking about the future of the business or delighting customers.”

Clearly organisations must explore all avenues to develop the talent needed to meet their transformation imperative. For some of Sage’s customers digital transformations may simply mean moving away from paperwork and spreadsheets to cloud-based software. But even such relatively small steps can transform a business. And in some cases, Hare is making that change happen one customer at a time. 

“My electrician was doing everything manually,” he says. “I said to him ‘when you do work for us it can take you three or four weeks to send an invoice’. When it arrived I’d pay it immediately, but I guarantee others didn’t. So, I said ‘we can put you on Sage Accounting and you can do invoicing on your app right there and then. I’ll get my invoice and pay you right away and if you’re lucky, you might get your money the same day’.”

Hare says the example of his electrician highlights the importance of technology businesses helping customers understand how technology delivers real benefits. He knows nobody wants to feel they are paying for technology for technology’s sake and has seen pockets of resistance among his own customers when unsupported on-premise software were superseded by the enhanced functionality of cloud-based services. But he says the fact he’s not a lifelong technologist helps him take a more customer-centric view.

“I’m a bit unusual in the technology industry,” he says. “There aren’t many tech CEOs who are accountants. But it’s important, because we sell financial stuff, and when I’m talking to a manufacturing CFO, it helps because I was one.” 

“I’m interested in technology that solves customer problems. I’m not interested in it intellectually. I’m interested in it because it produces an outcome which helps the customer do something.”

However, it’s not just about creating value for customers. Hare must balance the needs of all stakeholders.

“As CEO of a publicly listed company I’m managing four stakeholder groups: customers; colleagues; society and shareholders. They’re all equal and if you don’t treat them equally you won’t sustain long-term value. People talk about trade-offs but I like to say, ‘why can’t this work for all four?’”

“That’s what we’re here to do.”

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Marco Amitrano ACA MCMI ChMC

Marco Amitrano ACA MCMI ChMC

Managing Partner & Head of Clients and Markets, PwC United Kingdom

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