In the last blog article, we looked at how SMEs see transformation as key to business success. This blog focuses on the growing role that technology is playing as SMEs reinvent business models and transform their products and services. Business transformation is imperative for growth-minded SMEs. According to the study, SMEs: Equipped to Compete, conducted by Oxford Economics among 2,100 SMEs in 21 countries, almost two-thirds (64%) believe technology is central to their transformation initiatives.
They believe technology is critical to sustainable growth and long-term viability – in other words, it’s become a necessity in order to compete globally. SMEs are also aware they must do things differently in order to compete with global rivals in the future. Over half (53%) say technology is rendering traditional business obsolete. This shift in attitude is leading SMEs to rethink business models and strategies, and adopt technologies that were once out of reach.
One of the biggest trends that SMEs know they need to respond to is the shift in customers’ wants and needs. Evolving customer expectations are seen as having the greatest impact in the retail (41%) and wholesale (34%) industries. Even for professional services (24%), where it is cited least, it still ranks it as the second-biggest trend.
Given this focus on the customer, it is not surprising that consumer products, retail, and wholesale companies are predicting the fastest growth in the use of analytics to help improve insight and meet dynamic customer demands. Alongside the power of analytics, today’s SMEs recognize that business management software can generate insight, revenue opportunities, and competitive advantage.
Increased access to technologies such as business management software and business analytics is helping SMEs operate in ways that are more sophisticated – and specific to their needs. For example, Michael Hecken, head of marketing and strategy for German bicycle-maker MIFA AG, foresees that technology will continue to transform his company for years to come. “I think there will be seamless integration of the whole value chain,” he says in the Oxford Economics research paper, Transformation and Technology. “That will mean more just-in-time delivery, where suppliers share systems to feed you information.”
At this level of sophistication, more SMEs are likely to feel that they are at no disadvantage in terms of technological capabilities – even when they consider the resources of global competitors. Combined with newer tools such as mobile, social media, and cloud computing, SMEs are fully equipped to compete on the international stage. And as current technologies mature and newer ones are introduced, SMEs will have more tools to support their changing strategies.
Two in five respondents to the study believe that mobile technologies can help them deliver innovative products and services. It pays off in terms of better customer service (25%) and improved product and service development (23%). North American (22%) and Asia Pacific (23%) companies – to a greater degree than companies in other regions – emphasize the role of enterprise mobility in improving innovation. Mobile technology is viewed as transformational by the most profitable firms, suggesting a correlation between readiness to invest in technology and top-line performance.
In 40% of cases, the CEO or business owner is driving the change, indicating that transformation is a competitive consideration at board level. While management sponsorship increases the chances of success, the study emphasizes that, ultimately, performance will be determined by how readily and effectively a company adopts game-changing technologies.