Why do many small businesses spend more money on coffee and tea than on their information technology systems? Working in partnership with Dell, I recently moderated an expert Think Tank in Amsterdam covering how small and medium businesses invest in technology for growth. This was an incredibly insightful discussion from owners and managers in all types of small businesses and the challenges that they face.
The panel divided into two segments. On one side were those that built their business on technology and had a deep understanding of the strategic value of IT and felt that being able to leverage tools such as automation; and how to buy and operate these systems was a key differentiating advantage for them. On the other side of the discussion were a number of amazingly successful businesses who only used technology superficially within their business.
Undoubtedly there are types of business where technology can have a disproportionate effect on the leverage of an SME. David Hathiramani, co-founder of London-based (but international focused) online bespoke tailor A Suit That Fits depends on technology to reach his clients, to leverage low cost manufacturing in Nepal and to help automate fitting. He is a business owner who understands technology and knows how to create leverage above and beyond his company size. A Suit That Fits now makes more suits than all of the tailors in London’s prestigious Saville Row put together. Stéphanie Cardot, CEO of TO DO TODAY, a Paris-based corporate concierge service, is also growing her business at a quite incredible rate. Plainly, TO DO TODAY is a great business and Stéphanie recognizes that leveraging technology is key to continued growth and increased reach as she is searching for a key new hire, a director of digital marketing.
My key takeaway from the Think Tank is that many small businesses are hamstrung by a lack of understanding of how to make the most of IT and how to envision a new way of working that encompasses appropriate use of technology. Many small business owners see all of the technology marketing from vendors but fundamentally fail to understand how to apply these innovations to their business to drive value and growth. Technology companies and consultants are too focused on products and not focused enough on solutions. Having attended many recent Dell events including Dell World in Austin and Dell Technology Camp in Amsterdam, I can see that this is a big focus for the company, whose recent acquisitions are helping them build out their end-to-end solutions portfolio. Recent research shows that small and medium businesses are adopting Software as a Service (SaaS) solutions very rapidly. Perhaps this is happening as these have a defined outcome, tend to be business aligned and don't require lots of scarce technology skills to integrate and exploit.
Small and medium businesses desperately need help and guidance from trusted technology advisors who can bridge the digital divide and deliver business leverage. SMEs will continue to treat technology investments as a cost of doing business rather than a fundamental point of leverage that enables automation, customer interaction and sustainable growth unless this digital divide can be bridged. There is a huge opportunity for smart systems integrators, innovative vendors and a new way of working with SMEs to really accelerate the creation of jobs and value in our communities.
Steve O’Donnell, Analyst, Advisor, Chairman and CEO at GreenBytes Inc. Steve is an analyst, advisor and consultant with expertise in storage, cloud, data centres, and big data analytics amongst many other specialties. He previously held the role of Global Head of Operations for British Telecom and authored the book “What Every CIO Wants.” You can find Steve on Twitter @stephenodonnell.