SMEs must leverage technology

As transformation of business processes becomes essential, SMEs must learn how to leverage technology, writes CHRIS WELHAM.

2014 is the year for ‚”transformation‚” to be more than just a buzz word: rather it must be an actionable tactic that leverages technology. Worldwide, small and medium enterprises (SMEs) are facing more and more pressure to transform their businesses. The reasons are, among other, a need to grow, become more competitive, adjust or change the way they do business or to better manage their supply chain. In addition, globalisation is a very real source of competition for SMEs, resulting in many seeking sources of revenue beyond their home country’s borders.

In a survey conducted by Oxford Economics in 2013 of SMEs across the globe, more than half (59%) of respondents saw technology as a key differentiator for their firms, and as many as 57% cited technology as core to their business transformation efforts.

But who should drive this change? Nearly two-thirds (63%) of respondents said their CEOs viewed technology as critical to future success. However, when one looks at the results by region, CEOs of EMEA (Europe, Middle East and Africa) companies were far less likely to drive these changes than CEOs of North American companies (34% vs 52%). On top of this, nearly half (47%) admitted that they struggled to determine the best transformation strategy.

Technology has become more than just an essential tool to do business. It has become integral to virtually anything we do. For example, the correct use of technology in customer service can be the difference between being able to delight one’s customer consistently or not. For many businesses, all business transactions are in the digital world consider ecommerce, software managed supply chains, ERP, electronic invoices and statements. South Africa’s very own SARS is a very good example of how technology can significantly improve a business.

People have adopted technology in their lives even more than in business. This will only accelerate, with some of the big ticket items at the recent Consumer Electronic Show (CES 2014) in Las Vegas being wearable technology (eg: Google Glass and smart watches), the integration of smart phones into cars and how the ‚”Internet of Things‚” is fast changing into the ‚”Internet of Everything‚”, as more and more of what we use is digitally enabled and available to monitor, measure and even control via the internet.

While some people bemoan the rapid rate of change and others argue that most technological innovations make our lives better, there can be little doubt that to survive in business, how IT and in the broader sense technology is leveraged will, in most cases, set apart the companies that grow from those that shrink.

In many companies IT is a significant expense item that is constantly being targeted. To survive the challenges of today’s business world, SMEs absolutely must bridge the gap between business and IT and work together to discover how technology can be leveraged to further business objectives and goals. This will only be possible, though, if understood and led by the senior business leaders, including the CEO.

Affordable and credible frameworks to help those SMEs that want to embark on a digital transformation are almost non-existent, posing a very real challenge for these forward-thinking business leaders. This is very likely to change, possibly even within this year, as early adopters look for solutions and the leading service providers seek to respond to this new need.