Over the past 10 years alone, technology has changed the world almost beyond recognition. In a time when cloud computing, big data analytics and digital-first consumer experiences are the norm, it is hard to believe that it was only in 2009 that music streaming went mainstream and the video-on-demand market exploded.
Against this backdrop, American Express’ latest research into the business strategies of the UK’s small and medium sized enterprises found that these businesses are prioritising harnessing the latest technology to unlock growth and opportunity. In fact, almost two-thirds (65pc) of SMEs believe that digital technology will create new business opportunities, while the majority of UK SMEs rank adopting the latest tech as one of the top business challenges they’ll be working hardest to address over the next three years.
The UK’s SMEs are also clear on the types of technologies they want and need. The top three they plan to implement in the next three years are workforce productivity tools, faster and more reliable communications systems and integrated enterprise-wide software platforms and enterprise applications. In addition to these more functional applications, SMEs also have big plans to introduce some cutting-edge tech too – as, although not reliant on them now, over one in five UK SMEs plan to use robotics (21pc) as well as machine learning, smart algorithms, and artificial intelligence (22pc) over the next three years.
But, while these businesses are ambitious in their plans for using tech to transform their businesses over the coming years, there is also a lack of confidence when it comes to buying-in tech. Less than half of UK SMEs (46pc) rate themselves as effective at applying the latest technology compared to their competitors.
So, what steps do SMEs need to take to ensure when buying-in tech that they’re implementing it the most financially prudent and most effective way??
#1 – Take time to identify the right solution for you
When considering new technologies for your business it can be easy to quickly become overwhelmed. To avoid going “technology blind”, it is important to think about what it is that you want to achieve from a business performance perspective – and use this as a checklist to assess the right technology solutions for you.
For example, knowing that you want to focus on improving productivity which, according to our research, is the thing that 34pc of SMEs think will contribute most to their financial performance over the next three years – and putting some clear goals against this – could help you to work out your best solution.
#2 – Slow and steady wins the race
Similarly, don’t be tempted to rush to onboard new technology – it is far better to test and refine your solution than to implement one that isn’t right for you. Adding technology into your business is always easier than taking it away.
And, don’t expect all aspects of the deployment to be perfect first-time round. While new tech can achieve some amazing things for small businesses, be prepared for worst case scenarios and ensure you’ve set aside the necessary time and resources to deal with any issues that arise.
#3 – Think long term
As a small business with limited resources, it can be tempting to upgrade tech solutions by simply adding “patches” onto existing ones. While this might work in some cases, it is always worth taking the time to think about whether a bigger investment upfront could save costs repairing or replacing tech solutions further down the line.
There are also several steps you can take to help plan for, and fund, substantial investments in new technology. Things like supply chain financing – where a third party makes payments on behalf of the buyer, meaning that they can access capital until the end of the agreed billing cycle – can enable SMEs to access the funds they need to make the right tech purchase for the long-term future of the business.
#4 – Communicate clearly cross-business
Buying-in tech can have a significant impact on your whole organisation – from operations to marketing. Make sure you have a plan in place to communicate what you’re doing and why you’re doing it with the whole company, even customers, if it could impact their experience working with you in any way.
Tech is understandably a priority for UK SMEs over the coming years, with tools to streamline processes around people and administration topping their lists. These technologies have the potential to transform SMEs, freeing up time to focus on the things that will enable them to achieve their ambitious growth plans. Every business is different, but these four steps are a good starting point for SMEs setting out to embrace new technologies.
Colin O’Flaherty is general manager global commercial services UK at American Express