Innovative IT enables SMEs to go global
In recent times, the SME segment is undergoing a lot of transformation. They are not only bringing innovation in their product portfolio, but are also making changes to their business models and go-to-market strategies in order to compete with the larger entities and also to cater to customers across the globe. Consequently, most SME decision makers are bullish on investing in emerging technologies that can drive efficiency and help them achieve sustainable growth.
A recent study by Oxford Economics reveals that companies that are investing in technology are more innovative, have a global approach to business and have some clear advantages over their larger counterparts. Almost two-thirds of the respondents mentioned technology as a key driver for achieving longevity and improving bottomline. “SME leaders are increasingly adopting a global approach because they face tremendous competition from large multinational corporations and more empowered customers in newer markets. They are realizing that only by investing in the right technology they can successfully compete with larger companies and reach out to global markets,” notes Eric Duffaut, President, Global Ecosystem and Channels, SAP AG.
“Earlier most SMBs were confined to their local or regional market and they were comfortable that way. But with the help of technology, especially the Web and mobile, their growth has transcended geographic barrier and today many are going outside of their home market to accelerate growth,” says Gaurav Issar, Co-Founder of JewelsNext, an e-commerce jewelry company. He believes that in this new international landscape, business network and latest technology innovations are must for SMEs to evolve their business models and effectively compete. As the Oxford Economics study also reveals that firms expecting to generate as much as 40 percent of their revenue internationally will double in the next three years.
Bringing innovation to the fore
Experts believe that investing in new technologies should be a top strategic priority as SMEs remake their businesses for the global marketplace. By investing in emerging technologies such as business management software, data analytics, mobile, social media and cloud computing, these businesses can create strong customer relationships across the world.
Duffaut also observes another innovative strategy for businesses in the mid-market segment is forming networks around the globe. The study shows SMEs are increasingly forming partnerships with suppliers and other vendors located in countries outside their home markets. Many business decision makers in the SMEs are increasingly collaborating with other firms through online business networks and platforms to help drive innovation and growth.
“Today, there are numerous online business networks and platforms that can boost collaboration. Cloud computing and social media are important enabler to this growth and small and mid-sized companies much adopt these technologies to achieve significant changes to their company’s business models, product offerings, or go-to-market strategy,” says Kalpit Jain, COO, Netcore.
Although IT can help this segment go global and garner greater revenues, SME leaders believe that they continue to face challenges such as recruiting people with the right IT skill-sets and selecting the right technology that can give them a greater ROI. Duffaut explains that these companies face hurdles with BYOD, cloud computing and social media due to lack of understanding of the concept, policies and often face issues with security and integration. However, despite these ongoing challenges, investing in these innovative technologies will be a major element of transformation for this segment. For example, despite challenges faced by BYOD, mobile technologies will continue to be an important driver of innovation, followed by analytics, social and cloud. And the growth is expected to come from the emerging markets such as India, China and Indonesia as well as some Latin American countries.
In India alone, SMBs will contribute to over one third of the total domestic IT spends by 2015, stated a recent Zinnov study. The study states that while the overall domestic IT spending is expected to grow at a CAGR of 12 per cent to reach $36 billion by 2015, SMBs at the same time will grow at a CAGR of 15 per cent contributing $15 billion by 2015, and garner a chunk of their revenues from the international markets.
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