I’ve recently posted a series of blogs based on the findings of the Oxford Economics study, SMEs . As the study indicates, successful SMEs are not just striving to keep up. Rather, they are reinventing themselves to successfully compete with rivals both large and small. And, they are doing so by focusing on four key areas:
- Adopting a global mindset to grow into new markets or defend their home turf from international competitors
- Focusing on transformation – in their business model, operations, and go-to-market strategies
- Dealing with the human factors of skills, hiring, and culture, which touch on nearly every part of the business
- Planning for innovation and differentiation – never more critical than today.
Twenty years ago, no one could have predicted how critical technology would become to running a business. Yet today, technology is the enabler and – even more so – the great equalizer, making it possible for SMEs to transform, innovate, and ultimately compete to win. The future is technology-driven and innovation is a strategic priority for SMEs.
The initiatives SMEs have identified as most critical to success are:
- Driving innovation, cost reduction, and efficiencies
- Expanding product and service offerings
- Strengthening customer relationships
- Global expansion
- Penetrating new markets
- Domestic expansion
What are the key technologies SMEs have identified as the key enablers to achieving their goals?
SMEs will increase their use of technology across the board over the next three years. When it comes to investment strategy, SMEs are prioritizing technologies that enable them to gain better understanding and insight across the enterprise – leading across the SME category are business management software, business analytics, mobile and cloud computing.
Mobile technology: The leading driver of competitive advantage and customer service improvement, mobile technology also benefits product and service development, supply chain, innovation initiatives, and cost cutting. 60% of SMEs surveyed say it is transforming their business.
Business management software (BMS): An investment in BMS is seen as critical to supporting long-term growth in a global marketplace. Smaller companies are emphasizing investment in BMS, catching up to their peers with these established tools.
Data Analytics: A thorough understanding of business performance is making analytics a prized addition to the SME toolkit. While usage will increase among small and midsize SMEs over the next three years, smaller firms emphasize investment in analytics – again, realizing a need to catch up to their larger peers.
Social media: SMEs identify better customer service and improved product and service development as key benefits of using social media. While SMEs indicate an understanding of the importance of adopting social media technologies, cultural issues exist, which should lesson over time as the human factors are addressed to help employees embrace the technology. SMEs will want to consider the benefits of leveraging social media internally as well and improve overall collaboration and communication – leading to building and strengthening a culture of innovation.
Cloud computing: While SMEs are more cautious about the cloud, they also note its benefits, such as simpler and less-expensive implementation of BMS and analytics software. Too important to ignore, cloud investments will enable SMEs to operate at their full potential efficiently and effectively.
With the quest for competitive advantage driven by increased pressure from international rivals, larger companies, and firms with superior technology capabilities, innovation is essential to business growth and longevity. SMEs recognize this — 34% of SMEs believe a culture of innovation is a top priority. The choice is clear – SMEs must innovate to differentiate.
Interested in learning more? Visit our Community Experts website to download papers and infographics, or to follow our SMEs: Equipped to Compete blog series.