In tough economic times the UK’s 4.8 million small businesses need to be innovative and efficient to survive and grow. To do this, small businesses need to make the best possible use of the technology available to them. The good news is there are lots of opportunities. Whether through enabling e-commerce, new ways of marketing or improving the efficiency of internal processes - technology offers small businesses many ways to boost their performance.
The internet in particular is powering the creation of thousands of new businesses and unleashing a whole new wave of entrepreneurship. The UK is the most ‘internet based major economy’ with the web contributing 8.3 per cent of GDP which is a bigger share than in any other G20 country. By 2016, this is forecast to grow to 12.4 per cent which is twice the G20 average. So there is a whole new generation of digital native, tech savvy small and medium sized businesses (SMBs) coming through which is good news for the UK economy as a whole.
According to the Boston Consulting Group study “Ahead of the Curve”, the internet has given SMBs the ability to compete with other companies, regardless of location. Cloud-based capabilities enable them to go head-to-head with companies of any size by providing a host of powerful, pay-as-you-go capabilities. Enterprise wide solutions such as infrastructure, platform and software as a service (IaaS, PaaS and SaaS) allow SMBs to build scale incrementally and flexibly. They eliminate the need for big, upfront capital expenditures in favour of more manageable, ongoing operational expenses. This applies not only to IT purchases, but also to the cost of entering a market. A company with these resources at its disposal no longer needs to open a new office or a new factory in a foreign country in order to gain access to its capabilities and customers.
However, not all SMBs are so confident or proficient in harnessing technology. A recent study by Booz & Company suggests that only a third of SMBs in the UK have a digital presence and only 14 per cent currently trade online. For many more established businesses, understanding how to integrate what seem like fast changing technologies into their businesses can also be daunting.
But all the evidence suggests that tech savvy SMBs grow faster, export more and employ more people. It is therefore clear that the UK economy will benefit if the effective adoption of technology across the whole of the SMB base is improved.
Tech-savvy businesses outperform their peers in the marketplace
Here are some facts from the BCG study that will make you rethink your IT strategy:
- Tech savvy SMBs grew revenue 15 percentage points faster and grew jobs nearly 2 times faster than SMBs using less advanced technology
- Growth trends in revenue and jobs are consistent across gender, industries and geography
- Those who adopted cloud services grew revenue 10 percentage points faster, allowing them access to:
- Flexible payment options
- Scalable services
- Guaranteed uptime
- Enhanced Security
- 95% of tech-savvy SMBs use Microsoft Office versus 43% among those using little tech
- Tech-savvy SMBs are 6 times more likely to have international customers
- Nearly 205 of tech-savvy SMBs in emerging markets have employees in other countries
- Nearly 2 of 3 tech-savvy SMBs say that new technologies will lead to higher revenues and profits or more jobs at their company
- Twice as many tech-savvy SMBs say they are innovative thanks to technology
Small businesses should take active steps to review their use of technology and assess how they could improve by taking the next steps to upgrade. There are as many benefits as opportunities for tech-savvy SMBs that we’d need hundreds of articles to explain. But we’re more than happy to share our expertise with you if considering upgrading your IT infrastructure. Let us know how we can help.
Original Sources
- “The Digital Imperative”, Federation of Small Businesses http://www.fsb.org.uk/frontpage/assets/fsb-intellect-april13.pdf
- “Ahead of the Curve: Lessons on Technology and Growth from Small Business Leaders”, Boston Consulting Group, www.bcgperspectives.com