Small and medium businesses (SMBs) are fully focused on moving their organisations forward and much of this effort revolves around scaling up their businesses to prepare for incoming competition and to prosper in their own right.
In order to reach this target, businesses face a number of challenges and obstacles, and it is for this reason that Techworld has teamed up with Dell to investigate how small business owners leverage partnerships, modern technology solutions and 24/7 support to drive their organisation forward.
Techworld and Dell surveyed 50 IT decision makers from companies that had between 1 and 99 employees. The respondents took up roles such as CIO (8 percent), Head of IT (8 percent), CTO (12 percent), IT Manager (14 percent) and IT Director (16 percent) and came from one of fourteen industry sectors including IT & communications (28 percent), business management & services (16 percent), technology (14 percent), finance (8 percent) and healthcare (6 percent).
The market reality for SMBs? Adapt or die
SMBs are juggling a number of priorities while facing the stark reality that if they don’t move to digitally transform now, then much like their larger counterparts, they will be left in the shadow of their competition.
Digital transformation, however, isn’t merely a project which can easily be put into action and completed – it is the requirement to constantly change. SMBs are therefore looking at being efficient while also being scalable, retaining talent while also attracting new talent, and introducing new technology platforms while ‘keeping the lights on’ with existing systems and processes.
To drive this innovation and reliability at the same time is no easy task, particularly as requirements and environments continue to evolve rapidly. For instance, customers can change their expectations, competition can arrive from bigger, more established players as well as new, agile start-ups and disruptive firms entering the field from other markets. Amazon’s near $1bn acquisition of online pharmacy PillPack is an example of this. The e-commerce company could shake up the entire drugstore industry, with SMBs in the sector likely to be hit.
Luckily, many SMBs are not standing still and are reacting to these new conditions. While digital transformation is not solely about technology, there is a need to evaluate existing platforms and IT services, as well as understand how technology partners can help address their challenges.
In a recent study by IDC, two-thirds of UK SMEs said they were using technology to improve their business to keep up with digital transformation. Gartner’s 2017 forecast for Small-and-Midsize-Business External IT Spending reaffirmed that SMBs don’t shy away from spending money on IT – in fact the analyst house predicted that SMBs would spend $1 trillion by this year, while it also found that SMBs account for 40 percent of total IT spending by businesses of all sizes.
This is particularly important as SMB’s challengers will either be large enterprises that have huge amounts of resources to spend on IT, or they could be digital-native start-ups that are already well equipped to deal with the type of experience that customers are expecting – and to adapt when those expectations change. So SMBs need to invest in the right technology to compete, but should do this in a calculated way, with a strategy in place, and the openness to gain valuable advice from experts that have helped other SMBs through this transition before.
The strategy should also take into account changing working environments, with the rise of mobile workers, communication methods, and expectations of employees to be able to use the same technology they’re comfortable with at home, in the enterprise. Processes are therefore worth considering changing in order to accommodate these changing attitudes and new technologies.
To be completely geared up for the digital age, businesses need to have the right employees. This is easier said than done, however, and therefore SMBs may need to consider new ways of obtaining the skills they need, including overhauling their recruitment processes, changing or adapting existing roles, training staff and using automation.
To scale the business up, businesses have to recognise that they need to cohesively bring people, process and technology together for a more relevant business.
What’s helping SMBs achieve business scalability?
In the recent Techworld and Dell survey, a surprising 24 percent of IT decision makers (ITDMs) said that nothing is preventing their business from scaling up. However, for the majority of SMBs, this is simply not the case.
The obstacle that was selected the most by ITDMs was ‘limited human resources in regards to skills and staff’ (38 percent). A need for new talent was emphasised further when ITDMs were asked what one thing would help them to innovate or grow their business today – as 52 percent cited ‘more skilled resources’ as the key credential, which was far higher than any other factor (the next highest was only picked by 20 percent).
SMBs are likely to need new skills in order to exploit new technology to its full potential. While this could mean revamping recruitment processes and considering training programmes for existing staff, there is a trend with ITDMs responses in the survey, as other factors cited as stopping SMBs from scaling included:
- A lack of time (22 percent)
- Increased funding and support from senior management (20 percent)
- Culture/legacy thinking from senior management (12 percent)
This suggests that ‘softer’ issues like skills and culture are hindering progress, and this may be as a result of senior management’s attitudes and strategy. Without buy-in from senior management to recruit new personnel, and change the way the business operates, there is little chance for SMBs to make the strides necessary to be equipped for the digital age. Furthermore, the ‘lack of time’ that many referred to may be because of a lack of skilled staff and legacy processes, culture and technology that is currently in place within the business.
Digital transformation can actually free up time and resources to focus on scaling the business. For example, new personnel could work more efficiently, enabling other staff to focus purely on business growth. Equally, support and funding from senior management can increase morale which could subsequently boost productivity. It’s important to note that many of these obstacles are intertwined; if one of these issues were solved, it would likely lead to a positive resolution for another.
While these softer issues clearly need focusing on, technology still plays a big part of SMB’s strategy to scale up.
Legacy IT infrastructure (8 percent) was cited by ITDMs as a factor stopping them from scaling their business, but SMBs are clearly attempting to put this right.
According to IDC’s Worldwide Semi-annual Small and Medium Business Spending Guide, total SMB IT spending is predicted to grow by 4.9 percent in 2018, reaching almost $602 billion globally.
“SMBs around the world are increasingly interested in investing in resources to improve employee productivity and improve their competitive positions,” said Roy Boggs, vice president of SMB Research at IDC.
“While SMBs, especially smaller ones, have immediate tactical needs to sharpen performance, they are also looking to coordinate resources in a meaningful way. For many this will be an important step in their digital transformation,” he added.
In other words, technology can play a part in helping to overcome some of these obstacles. For example, automation and analytics could help SMBs to become better at recruitment, while better platforms could increase efficiency – and therefore provide more time for employees to focus on scaling up the business. Simplifying the existing IT set-up is paramount to being able to scale, and it is stated by 32 percent of ITDMs as the primary challenge around their IT environment.
But this does not mean that SMBs are avoiding new technologies. Indeed, in the IDG survey, four percent of ITDMs said modern IT equipment and infrastructure is the one thing that would help them to innovate or grow their business today, while they are also deploying and testing a range of emerging technologies such as data analytics (52 percent), IoT (38 percent), AI/machine learning (34 percent) and containers/microservices (30 percent). In short, organisations want to improve existing IT but add to it with new technology, which is no easy feat.
It’s important to note the growing importance of data here - as it is a crucial element of all these emerging technologies. Data is growing both on volume and in terms of importance; IDC forecasts that there will be 44 trillion gigabytes of data in existence by 2020.
These new technologies will help SMBs to make more of their data, enabling them to provide better customer experiences, and perhaps even helping those ITDMs who said that a limited customer base (18 percent) was stopping them from scaling their business to grow their number of customers. After all, with better datasets, governance and quality of data – and the right technologies and personnel to handle the data, ITDMs will be able to better target prospective customers and retain existing customers.
How Dell can help
When asked what one thing would help their businesses to grow or innovate, four percent said a trusted third-party vendor who can support business growth. While this suggests that many organisations would rather try to implement change themselves, there is merit to being advised by trusted third parties – particularly because SMBs often need tailored solutions that cannot be purchased ‘off the shelf’.
With over 30 years of experience in helping small businesses to thrive, Dell is dedicated to creating the products and services growing businesses require, also offering a personal level of partnership for peace of mind that an SMB’s technology will perform the way it needs, even as the business evolves. A tailored solution may also help to get buy-in from senior management, as the company can decide how it wants the products and services to fit within the business. It could also fit the existing resources the business has – and lessen the need for new skilled resources.
A partner can also help to find the necessary skills that an SMB is seeking and ensure that the emerging technologies that a business is looking to deploy can be integrated and can provide actual business value, enabling the SMB to scale.
While it is clear that SMBs all have different priorities and obstacles – they are all faced with the overarching challenge of the new digital landscape, with new challengers and reinvigorated rivals to compete with.
They have to get themselves up-to-date in the digital age and scale up in order to have an edge over their rivals. To do this requires a combination of digital transformation, talent, technology and tenacity.
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