Ten Things That Could Change for SMBs in 2020

Connected enterprises, customer intimacy and embedded collaboration would be some of the themes that one could witness in the small and medium business (SMB) segment of the industry during 2020 with data analytics assisting end-to-end digitization goals that these companies would follow, says Anurag Agarwal, veteran market researcher and data analyst.

In his latest blog on SMB and midmarket technology-related predictions for 2020, Agarwal says while security would transition from a medieval castle approach to a hardening of the flexible parameter while adoption of 5G networks would change the scenario, provided these replace the older networks across the world in the next twelve months.

Given below is a gist of the predictions that Agarwal makes in his blog and provides clarity through some infographics:

1. Connected Business Will be Everyone’s Problem: The top focus of investments would be around ways a connected business can support previously unattainable objectives. The use of cloud, platforms, edge, devices, applications, security, collaboration, workspaces and insights would be the panacea for connected enterprises with focus on operational efficiency, customer intimacy, staff empowerment and product innovation.

2. Momentum Building for Consumption-based IT Acquisition: Discrete sales of individual products or integrated systems would be replaced by agreements to provide IT capacity and business functionality “as-a-Service”. The trend will be more midmarket driven than small businesses with 20% of midmarket firms shifting to OPEX-based agreements where these firms will look for flexibility and will prefer to acquire technology based on usage.
3. Customer intimacy Gets a New Meaning: This will be a ground-breaking year when customer intimacy (acquisition, retention, experience & satisfaction) will drive IT adoption and business process evolution. By the end of 2020, for 45% of SMBs, need for customer intimacy will drive IT adoption and 76% of new SaaS adoption will be customer focused. As a result, 15% of small businesses and 24% of midmarket firms will have “Top Notch” customer facing digital presence.

4. Need for Embedded Collaboration will be clear and present: Anywhere, anytime also means any type of collaboration. Collaboration solutions cannot be deployed on stand-alone platforms – they need to be viewed as a framework for integrating multiple capabilities, native to multiple applications. By the end of 2020, 80% of SMBs will benefit from embedded collaboration and for high-growth, innovative businesses, effective, efficient collaboration will be in their organizational DNA to deliver decision agility, business agility and innovation agility.

5. Regardless of the question, analytics will provide an answer: In 2020, SMBs will see a new attitude and culture that will value and use data as a meaningful way to gauge overall performance and specific areas of interest at a glance will become prevalent. SMBs will demand Key Performance Indicators (KPIs) as a standard part of application architectures as well as a meta-directory of KPIs that all applications can access. It may finally become possible for SMBs and Midmarket firms measure and optimize for elusive objectives like Return on Marketing Investment, Optimal Pricing, Cost of Acquisition and Lifetime Customer Value. By the end of 2020, 15% of SMBs will be highly data driven and 30% will be using cloud-based prescriptive analytics and 50% of midmarket firms will demand AI-driven analytical platforms to proactively prescribe actions that will mitigate risk / increase opportunity within the predicted future.

6. End-to-end Digitalization will be the goal: SMBs will turn their attention to their unautomated or poorly automated business processes. However, most IT suppliers will be ill-equipped to advise and provide digitalization solutions. Each will work within their narrow offerings leaving a trail of frustration for the SMBs or disconnected workflow systems. IT consultants will find the opportunity lucrative. End-to-end digitalization will be the goal and by the end of 2020, 30% of SMBs would have successfully automated their business processes and would have at least some of the tasks connected via automated workflow systems.

7. Security will transition from medieval castle approach to hardening the flexible perimeter: The edge shifts with the physical movement of each device-holding end-user, and the core assets are increasingly distributed between owned and as-a-Service facilities. For most SMBs, robust security will still be elusive, but in 2020, IT mature and innovative SMBs will demand that security as a feature be present within each layer of their IT stack and comprise of tactics and integrated technologies to ensure that they provide comprehensive coverage, that they do not leave holes between the various shields, and that they are able to respond to new threat sources as they arise. 50% of SMBs will aspire for end-to-end security but only 20% will have the sophistication to adopt.

8. 5G – still lots of smoke…but the fire is nearer: Widespread use of 5G within SMBs is clearly a bit further away than mass market adoption of cloud and analytics, but it may advance rapidly. 5G will represent an early adopter technology in 2020. Regardless of the fact that most smartphone launches will be 5G-enabled, applications and use cases will have a lot of catching-up to do but it will open up new opportunities for SMB-focused SD-WAN and IoT-focused suppliers. By the end of 2020, 20% of digitalized and sophisticated-IT SMBs will begin to take advantage of 5G, but adoption will be more prevalent in European and Asia/Pacific mature market countries than the US.
9. IT efficiency deficit will increase managed services adoption: Maintenance is detracting from IT’s ability to support key business objectives as 77% of staff time is spent on support. Compounding this with increasing reliance on technology as a key element of business success, burgeoning complexity and cost constraint will create an “IT efficiency deficit” compelling the SMB organization to outsource most of its technology consulting, architecture, deployment, support, maintenance and management. IT services will bridge the gaps between IT requirement and capacity thereby improving IT efficiency and optimizing time. As a result, by end of 2020, IT efficiency deficit may reduce by 12%.

10. AI aspirations will drive IT automation, cybersecurity, customer experience: Artificial intelligence adoption within SMBs is at a stage where cloud was a decade ago. Visibly absent within small businesses but notably present within midmarket firms. However, it is not a question of when AI adoption will take firm root but how. The responsibility will lie with the vendors and other suppliers for guidance, deployment alacrity and outcomes. By the end of 2020, 35% of AI deployment within SMBs will be in the areas of IT automation, marketing/advertising, customer experiences and cybersecurity.