A global study has found that four out of five small and midsize businesses (SMBs) see tangible benefits such as increased sales, decreased costs, ease of information access and improved customer service and worker productivity as they embark on digital transformation.
However, less than 7 per cent of SMBs have gone beyond integration to derive real-time insights that drive optimisation in processes and workflows to yield business results.
The survey, which focused on how SMBs in 13 countries around the world are transforming, found that almost 44 per cent are investing in technology to make an immediate difference in supporting current processes.
Use of collaborative software, customer relationship management (CRM) and e-commerce applications is widespread among SMBs, with these often serving as the first points of entry to digital transformation. One in three smaller firms polled said that they preferred that these applications be delivered through the cloud.
Overall, cloud implementation has made digital transformation simpler for small companies, with two in five stating that the rollout of their first solution was either easier than expected, or took no extra effort.
Fortunately many investments seem to be bearing fruit, with 73 per cent of companies which had adopted digital applications report that their expectations regarding technology investments were met or exceeded.
“Digital transformation could quickly become a cost of doing business for small and midsize businesses that want to maximise growth and profitability,” said Barry Padgett, president of the SMB team, SAP.
“This study shows that smaller companies are being proactive and strategic in how they invest in digital technologies. These investments, many of which have minimal requirements in terms of capital investments and IT staff, enable unprecedented opportunities for scale and efficiency by providing access to capabilities that were once out of reach for smaller companies.”
Australian and New Zealand businesses are slightly ahead of their global counterparts in being at the early stage of digital transformation (34 per cent versus 31 per cent), though 15 per cent of businesses have done little to no work in applying technology as part of digital transformation.
Fifty-two per cent of ANZ respondents said customer acquisition or acquiring new customers was the most immediate priority for the next 12 months, while the next two priorities were improving efficiency and productivity and reducing costs/expenses with equal responses (cited by 40 per cent each).
“SMBs globally are increasingly recognising the benefits of digital transformation and continue to add advanced technology resources,” said Ray Boggs, vice president, small and medium business research, IDC. “But the challenge is in connecting different technology areas for maximum impact. Firms that do that tend to grow faster and be more successful in an increasingly competitive environment.”