SMBs (Small and Medium Businesses) are the backbone of any economy. They account for 50%+ of the GDP and 60%+ of employment. SMBs are characterized by low operational margins and resource struggles in terms of capital needs, skill-set, access to new markets among others. These issues have been compounded by the COVID 19 pandemic as it brought about many disruptions. As SMBs adjust to the new normal, they need to rethink the way they operate in terms of business models, organization structures, and growth trajectories.
In this context, perceiving ‘Information Technology (IT)’ as just another support function may stifle the growth and operations of an organization. It was often an afterthought for SMBs which helped find alternatives when paper or Excel did not suffice. Technology decisions were usually ad-hoc, with a myopic lens on specific needs rather than the bigger picture. The
IT landscape is evolving and today technology can enable SMBs to leapfrog their growth orbits. In fact, SMBs that chose to go for a digital transformation have been able to weather the pandemic more resiliently.
When it comes to Information Technology, the following are 7 key guidelines to consider:
- Embrace Technology – IT has the potential to be a strong enabler and a growth driver for SMBs, beyond just bringing in operational efficiencies and cost benefits. SMBs need to include technology as an integral part of the overall business planning process.
- Focus on the right talent – Previously, finding the right technology talent for SMBs was a challenge and seemed daunting. Now there are several possibilities that SMBs can leverage, to ensure the right expertise at the top for IT – e.g., VCIO or virtual CIO, fractional IT leaders (where one doesn’t pay for a full-time resource), SMB focused technology firms amongst others. Don’t be shy to ask your VCIO or CIO or Tech. partner
what are you getting as rate of return on the IT spend. Topline and/or Bottom line.
- Develop an IT roadmap and digital blueprint – Develop and 1-year, 3-year, and 5-year plan to ensure technology decisions incorporate the right long-term vision. It is imperative to let business priorities drive the technology decisions rather than adopting technology that is prevailing market trend.
- Build solid technology architecture – Build the right IT foundation. Don’t bring together disparate systems or software. This will be addressed if the technology planning is done along with the overall business strategy and plan instead of individual departments
approaching IT independently.
Be laser-focused on execution – Execution must be a key focus to realize true value from technology investments. The key execution pillars should be:
- IT Strategy and Planning
- Tools/Systems, Data
- Revisit your IT roadmap every 3-6 months – Getting IT right is an iterative process that needs to adapt to ever-changing business needs as well as the overall market landscape. Evaluate and adopt new technologies – Don’t be afraid to assess cutting-edge technologies like artificial intelligence, machine learning, and augmented /virtual reality.
These new-age technologies could make an exponential impact on the capabilities of smaller businesses. But be careful to not use these in silos and/or purely driven by the “coolness” factor. If SMBs focus on the above 7 key things, they will be able to drive significant value from technology investments. As the world moves more and more digital, having the right
technology is no longer an “IF”, but a “MUST-HAVE”.
As SMBs try to get Information Technology right, we looked at some key technology trends that will shape the IT landscape for SMBs in 2021 and beyond.
- Cloud-based technologies – Cloud computing offers software, platforms, and infrastructure as a service with the pay-as-you-go model. It converts IT spends from Capex to Opex and hence enables SMBs to adopt world-class technologies at low cost. If you are an SMB and are not using the cloud, you need to explore this space.
- Automation – is the first step to a digital transformation. A Salesforce study found that businesses automating their processes are 1.6-times more likely to be growing rapidly than those that don’t. Process automation has evolved from automating repetitive back-office
tasks to including front office functions (like sales and marketing). Irrespective of your level of automation, an audit of your business functions from an automation perspective, will surely help identify opportunities to increase efficiencies and reduce costs. This enables
the team to devote its energies to value-creating activities like planning and innovation.
- Cyber Security & Resilience – With increasing exposure due to multiple entry points in digitized processes, cyber threats pose an imminent risk to SMBs. It is essential to ensure that your organization has a comprehensive cybersecurity plan – encompassing all your digital touchpoints across employees, vendors, customers, and any other partners.
- Virtual workspace enablement – Multi-location and a remote employee base have become a permanent reality. SMBs are realizing this and making virtual environments a focus area. Employee motivation, engagement, and growth in a virtual setup are critical to driving employee productivity. Current business processes need to be revamped to address end-to-end employee management for in-office as well as virtual-office environments.
- Use of Social media – Social media has become the biggest platform for marketing and communication with all key stakeholders. SMBs need to tap into this to promote, gain mindshare and engage customers. Organic social media, which is often free or low cost, is a good starting point.
- Mobile Experience – Everything that a company offers will ultimately need to be Mobile enabled. Some companies are ahead of the curve and are already doing it while others are catching up. SMBs that can have a seamless mobile experience for their customers will the true winners in the long-term. Brand loyalty is an eroding concept in many categories and people easily shift to ‘ease of use’ as their preferred option.
We hope that the 7 guidelines and the 6 trends that have been explored, will provide key insights for SMBs as they get their IT mandate right.
Now, more than ever before, technology is creating an equal playing field for companies of all sizes. SMBs need to focus on positioning themselves to take advantage of this evolution.