In the wake of the COVID-19 crisis, SMBs and SMEs accelerated their business plans to include technology spending to achieve even more. According to a report by the Entrepreneurial National initiative part of the Ministry of Economy in the UAE – SMEs that have digitalised were more likely to have found new business opportunities during the pandemic, at double, the rate of the least digitalised according to recent findings. Other studies have shown how digitalisation has built long term business resilience, increasing EBIT by 12-20% in the first year of going digital, and increasing speed to market by 40-50% on average.
This is further echoed in Sage commissioned largest global study, Small Business, Big Opportunity? into perspectives of businesses representing over 2 billion jobs and £44 trillion of GDP globally. The study cites that confidence levels are high among Small and Mid-sized Businesses (SMBs) with 81% expecting to return to pre-pandemic profitability within the next 12 months and 46% expecting to hire more people in 2022.
From investing in their websites and refreshing hardware to upping their spending on e-commerce, digital marketing, and customer relationship management (CRM), SMBs are earmarking significant digital, and IT budgets for the months to come. This reflects their growing confidence in an economic recovery, despite events in Ukraine, higher fuel prices, and the pandemic.
There is a growing acknowledgement that smart technology investments can pay for themselves multiple times over by enabling a business to cut costs and improve profitability or increasing top-line revenues. As we saw throughout the pandemic, technology is key to SMB resilience, giving businesses the agility to thrive through difficult times. According to Arthur D Little Survey of SMEs in the UAE, 76% found that digitalisation had attracted new customers, 65% found that it generated cost savings, and 50% found that it had opened new markets. Improved customer experience, increased agility and flexibility, lifetime customer value, and differentiation possibilities were also cited by SMEs as benefits, mostly among medium-sized companies and those achieving higher levels of digital maturity.
Another factor driving digital adoption is that the cloud and software-as-a-service models dramatically reduce upfront costs, deployment times, and risks of introducing new IT applications and systems. To get real value from their technology investments, however, it is important that SMBs create a sound business case for each investment.
The goal shouldn’t be to simply spend on technology but to drive a specific business outcome. Here are six key reasons we’re seeing SMBs invest in improving their IT capabilities:
Allowing routine processes to run hands-free
We’re operating in a volatile market with considerable inflationary pressure, and SMBs need to be efficient and flexible. Automation enables them to focus their human resources on strategy, customer service, and other value-added areas while routine processes run hands-free. Moving from time-consuming, inaccurate, and manual means of financial recordkeeping, for example, frees up human time and improves process accuracy and consistency.
Business insights drive growth
Innovative technology provides SMBs with the visibility, flexibility, and efficiency to manage finances, operations, and people. They can use real-time data from human resources, payroll and accounting platforms to get an accurate view of business performance, forecast future trends and, ultimately, improve their profitability.
Strengthening SMB resilience
With the right technology in place, SMBs can better adapt to change. Today’s cloud-based technology, for example, enables the work-from-anywhere and digital commerce models that allow SMBs to keep operating through uncertain times such as a pandemic. Furthermore, technology enables them to anticipate and respond to business threats and risks and is key to ensuring compliance with tax law and regulations.
Transforming how SMBs acquire, engage and manage people
In addition to streamlining manual processes, technologies like HR and payroll systems can be transformative for an SMB’s employee experience. For those seeking to become innovative people companies, integration between payroll and HR systems can enable self-service experiences that empower the workforce. Employees can use self-service on their mobile devices or computers to review and update their information, access payslips, apply for leave, and more.
Preparing for good times and bad
The pandemic has given SMBs a renewed appreciation for the importance of running agile, up-to-date IT systems. The right technology can position an SMB to grow and move swiftly to take advantage of new business opportunities. Equally, it can help SMBs navigate abrupt changes in their operating environments. As we look beyond the worst of COVID, now is ideal for SMBs to look at much-needed technology changes and upgrades, such as embracing cloud, artificial intelligence, and machine learning capabilities.