A recent study of Australian small businesses revealed higher tech investments lead to faster revenue growth and increased employment. However, respondents noted they invest less than one per cent of their annual revenue into new technology.
In a slowing economy, reason would call for slowing down investments especially for the more vulnerable SMEs. However, I believe tech should be viewed as an opportunity to stand out and grow even when the economy may be slowing. Giant corporations are generally more risk-averse. A small technology investment during these times can create a competitive advantage. Here are a few reasons why:
Change does not happen overnight, and implementing new systems takes time. SMEs’ size and agility enable managers to react more quickly to evolving tech and business needs. They can move at speed to receive stakeholders’ buy-in, implement technological change and achieve rapid adoption. Smaller teams make technology transitions simpler and far less disruptive.
A key advantage SMEs have over larger competitors is the closeness of the relationships they are able to build with their clients, aligned with a focus on executing high-quality work. To keep this advantage, small businesses need tools to execute and manage plans effectively. This makes it important that they invest in technology like automation and process management, so they can consistently over-deliver on their promises and keep customers coming back for more.
These tech investments are also helpful when recruiting and retaining employees. Talent will always prefer employers that offer smart tools to complete their work. And customers often want to work with companies that stand out in the way they operate their businesses.
The emergence of subscription-based and software-as-a-service models have significantly decreased the cost of tech in the past decade. Businesses can now access scalable solutions for only a few hundred dollars per year. This sharp decrease in costs has significantly lowered the risk of investing in technology, opening opened the doors for SMEs to test, learn and iterate, just as larger organisations do.
Digital transformation has evolved into business transformation. Implementing operational change to build efficiencies and drive productivity can help safeguard against a slowing economy. SMEs have to realise their size is an inherent advantage thanks to the nimbleness and agility to make changes that benefit them now and into the future.
For businesses ready to consider new tech investments, consider this five-step guide:
Fintan Lalor, Regional Manager – APAC, Wrike