UK SMEs are investing in digital transformation for faster growth

UK small businesses are actively investing in digital technologies to increase their revenues and gain new customers.

Two thirds of UK SMEs are using technology to improve their business to keep up with digital transformation, according to an IDC custom study commissioned by SAP SE.

The research, which looked at the views of UK SMEs finds that most of these companies felt they could do more to exploit new technologies to take advantage of the digital transformation.

The global survey, which included responses from 300 UK leaders of SMEs with up to 999 employees, found that the main reasons for investing in technology innovation were revenue growth, customer acquisition and driving operational efficiencies. Almost 50 percent identified these aspects as immediate strategic priorities for digital investment.

The study also reveals that cloud adoption and digital transformation by SMEs is gaining traction, with the majority (56 percent) of UK companies of this size now using some form of cloud-based service.

However, the study identified that perceived security issues and recurring cost of ownership were slowing the move to cloud services, with 44 percent and 28 percent citing these factors respectively.

Mirroring the rise in mobile enterprise applications and demand for mobile working across the economy, over a fifth (21 percent) of SMEs are looking to improve mobile worker enablement through technology investment.

The agility and flexibility benefits of digital innovation, however, ranked low on the priority list for SMEs, with only 12 percent citing this as a reason for allocating resources to technology.

Cathy Daum, senior vice president, Global Channels & General Business EMEA, SAP, thinks the study shows that technology is a huge driver in helping these companies achieve their goals.

Daum continues, ‘The research also reveals that they’re looking for new ways to fully benefit from other areas of digital innovation. This includes strengthening business networks, improving mobile worker enablement and helping become a more agile organisation by investing in areas such as cloud-based services.

‘SMBs who want to maintain a competitive advantage need to build these innovations into their existing technology infrastructure to take full advantage of the digital economy and compete with larger businesses.’

Technology will help SMEs survive

The majority of SMEs are already using technology tools for employee collaboration (66 per cent), customer relationship management (63 per cent), business analytics (51 per cent) and e-commerce, including online order taking and billing (50 per cent).

More than half (55 per cent) of SMEs are prepared to deal with some disruption when implementing new technology solutions and would move cautiously to ensure proper operations even if it slowed the implementation process.

More than half (57 per cent) of UK SMEs cite improved internal efficiency as the greatest benefit of digital economy investments.

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Ray Boggs, vice president, Small and Medium Business Research, IDC, believes that it’s noteworthy that both small and midsize businesses in the UK lead in the implementation of new technologies to help achieve their business goals, especially when compared to other markets in EMEA.

Boggs adds, ‘With more than two thirds investing in digital innovation, according to our research, these businesses are setting themselves up for future growth.

‘What’s more, they’re going beyond using technology for most needs like collaboration and customer relationship management and starting to implement strategic tools like social analytics and IoT technologies. This underlines the strength of this sector and the role digital innovation is playing in supporting company success.’

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