For small businesses, it can be incredibly time-consuming to jump from system to system. From payroll and invoicing to e-commerce, HR and document signing, disconnected services can take up valuable time, money and resources that SMBs don’t have.
Customers now expect these services to be fully embedded into one seamless system. For example, instead of redirecting a user to a third-party site to process a payment, this function is woven into the main platform's interface.
Integrating these services becomes a key lever for user retention and growth, but companies must ensure they are doing so without compromising the core user experience.
In our most recent Sifted Talks in partnership with accounting, HR and payroll software provider Sage, our panellists discussed how to create sector and domain specific systems, how to balance integration with simplicity and how embedded services must remain seamless for customer experience.
Our panel of experts included:
- Kunal Galav, managing director of Pleo Embedded at spend management platform Pleo
- Tom Hipwell, VP of engineering at hospitality automation services provider Nory AI
- Gordon Stuart, SVP of Fintech & Embedded Services at HR software provider Sage
- Samantha Wessels, president of EMEA at content management provider Box
The cost of fragmented systems
The average SMB has around 59 different applications within their tech stack, says Stuart.
“Businesses just want to get on with what they went into business for,” he says. “Not jumping between multiple different apps wasting their time.”
Small businesses also often have up to five separate bank accounts, says Galav. “If you're a small business owner, you're spending your weekend sitting at your kitchen table just going through different payment systems.”
The world of technology is changing so quickly, businesses often try to rush into adopting multiple systems, adds Wessels.
“It's hard for any business, but never mind a small business to keep up,” she says.
“We’re bringing all these AI tools on top of an already layered system and then the disconnect is actually getting worse.” - Wessels
Solving this problem with knowledge-specific systems
Generic technology systems are no longer sufficient, especially if companies are dealing with sensitive or sector specific information such as finance or legal.
It’s crucial that technology systems integrate and understand GDPR regulation across Europe, as laws in different countries will vary, adds Wessels. “We work with insurance application Guidewire, for example, managing their content.
“As a customer, when engaging with both companies, you have everything you need from a security and GDPR perspective. The complexity isn't there in the US but the GDPR complexity and data sovereignty becomes really important in Europe. The French laws are different to the German laws which are different to the Spanish laws.”
Domain specificity is especially crucial when dealing with finance and invoicing, says Stuart. “When it comes to paying your suppliers, you've got to pay them the exact amount and make sure that transaction is categorised in the right way.
“This is where domain accuracy becomes important. Generic models don't always achieve the results that businesses expect.” - Stuart
Collaboration over building from scratch
Building complex back-end systems that are compliant and often span multiple regions is incredibly difficult. Instead, software providers should collaborate with domain experts such as the likes of Box, Shopify (e-commerce) or Stripe (finance).
There’s often the urge to build your own product which can be extremely complicated, says Stuart.
“If you want to build your own payroll I say good luck, because we've been doing it for 44 years and we've had feedback from potential partners who’ve decided to go down that route and regret it,” he says.
“You've got to lean on the partners you're working with because if it's an area that your brand isn't strong in, you might want your embedded provider's brand to show up in your workflow. One of the best examples of this is Visa or Mastercard showing on a point-of-sale terminal. There's an inherent trust there.”
It's also crucial to learn as much as you can from your domain partners, says Wessels.
“SMBs don't have endless resources in IT departments; one looking at security, one looking at content, one looking at the infrastructure,” she says. “We're here to help you and we will work with each other.”
Businesses should also be focusing on purely the domain specific customer, adds Galav. “If you take a restaurant customer versus an accountant, they need the same thing but in a different context. Even something as simple as expenses. Solving what the customer needs rather than the integration problem of the platform is critical.
“What becomes important is a pilot approach you can test out with customers. With the parties that are working together you can actually build a better product for the customer.
It's all about collaboration.” - Galav
Creating an ‘invisible’ customer experience
For an embedded service to be truly successful, the end-user shouldn't even know it's there.
If it feels like there’s an additional layer added on, then the service hasn’t been embedded enough, adds Stuart. “The workflows and outcomes that we've seen be successful are the ones where you don't know that there's a different service provider underneath it.”
We really think about the product experience and prevent the user from feeling like they are being ported out to a third-party vendor, adds Hipwell.
“It should be as seamless as possible as you move through it,” he says.
“Completely transparent to the user and not just the workflows, but also to the authentication, authorisation, permissioning.” - Hipwell
