Scalable or scalability is the ability to be changed in size and scale. This can either mean an increase or a decrease in size. While the term can be used in reference to resizing images and business growth, scalability is often used in enterprise tech to describe the ease with which platforms and processes can change size to meet business needs.
Being Scalable in Business
Scalability in the context of businesses and companies refers to their ability to cope and perform well under an increased workload that arises from market demand, changes in technology, or rapid company growth. A company that scales well is able to maintain or even increase its performance level and efficiency when it is challenged by larger operational demands.
Scalability in Tech
Software scaling takes place when technology companies determine whether their software applications and services can accommodate an increased number of users, computations, and inputs and outputs, while still maintaining high quality performance and end-user experiences.
Factors that are considered when determining whether software can scale include:
- How much additional processing power (in the form of CPU speed) will be needed to run the software
- How much memory and storage is available for user, software, and company data
- How efficient a business’s current database is and for what business size
- How much the software can handle a high number of users using it at once
- How adaptable a software’s programming logic is
- How quick its website uptime is
- How strong the network availability is
Technology companies have an advantage when it comes to scaling because they typically do not require physical inventory. This means that the cost of physical inventory, and the need for storage of said physical inventory is eliminated.
Enterprise technology is often faced with challenges in scalability. As a company grows and additional users gain access to the company’s tech infrastructure the risk increases for data breaches, website outages, and legal regulation issues. Also, if a company is expanding to reach a global audience, challenges such as translation, localization, currency, international compliances, and download speed will arise.
Benefits to Scaling
Scaling a business often requires strategic, long-range planning that accounts for resources, staffing, and financial needs. The benefits of scaling have several positive impacts on businesses, which includes:
- Improved efficiency that comes from planning for—and being able to respond to—market and workload changes—as well as other external factors most eventualities and being able to operate whenever different circumstances occur
- Adaptability and being able to remain flexible through economic changes and pressures
- Longevity because those who consider the provisions necessary for scalability are more likely to survive in the future
Considerations before Scaling
While there are many benefits to scaling, it is only a fruitful endeavor if a business prepares and considers all of the factors needed to scale properly. Here are the considerations businesses should should examine to determine if their business can successfully scale:
Evaluating and Planning
In order to scale, businesses must determine whether or not they can survive the growth. They should evaluate their sales growth, customer growth, and the orders and revenue they want to generate.
Then, consider how the addition and expansion of technology, people, infrastructure, and systems will affect your current business’s operations. The more specific you are, the better.
Determine Your Budget
After you’ve considered the additions you will have to include to scale your business, you also need to consider whether your budget can accommodate said additions. In addition, businesses should consider multiple sources to fund the scaling efforts. For example, you can apply for various grants, like the FedEx Small Business Grant, or for a loan with your bank.
Secure Your Business Operations Structure
Determine if you have a system structure that can accommodate for an increase in sales. Ask yourself these questions to determine whether your sales structure is capable:
- Do you have a sufficient lead flow that will generate the desired number of leads?
- Do you have a marketing system that can track and manage an increased number of leads?
- Do you have enough sales representatives?
- Do you have a robust system to help manage an influx of sales orders?
- Do you have a sufficient billing system that can follow up and ensure invoices are collected in a timely manner?
Invest in Technology
Technology helps make scaling a business easier and less expensive. Four factors to consider when determining the kinds of technology you should invest in are:
- Automation, which helps you run your business more efficiently by minimizing the amount of manual work for tasks that are consistently done, like emailing contacts
- Read more about why you should invest in workflow automation on eWeek.com
- The promise of a centralized system/platform is increased efficiency through streamlined communications, better management visibility, shared data, and elimination of duplicate tools and processes
- Actual hardware, like servers, computers, printers, and telephony equipment
- High quality software needs high quality hardware to host it, otherwise it won’t function properly
- Artificial intelligence, which has the ability to automate repetitive manual coding tasks
Some popular software platform categories to consider when scaling a business include:
- Customer relationship management (CRM)—A business would be able to manage their customer interactions through a single CRM; it contains a business’s entire workflow, which determines whether a business is scalable in the first place
- Marketing automation—Allows businesses to increase the reach and frequency of their marketing spend by eliminating repetition and connecting demand generation content with CRM and sales qualified leads platforms.
- Accounting—Allows businesses to better record the higher flow of money that occurs when a business scales and manage of an increased number of customer and vendor contracts, purchase orders, and account balances
- Manufacturing—Allows businesses to better manage increased manufacturing for either a single product or a wider range of products
- HR—Helps businesses manage their increasing number of individual employees while scaling and helps makes sure the employees are being taken care of in terms of pay, benefits, and onboarding in a single system
- Shipping—Allows better pricing through volume, access to more complex services like taxation and customs support
Other meanings of scalable
In finance, scalability refers to a financial institution’s ability to accommodate increased market demands and sales volume.
In the restaurant industry, scalability refers to a restaurant’s ability to accommodate an increased number of customers, food production, and floor plan expansion.
This article was updated December 2022 by Amy Yang.