The word “free technology” is a myth, it is never really just about buying a tool and installing it. The very IT industry and its various service branches are proof to the fact that tech adoption at any level involves multiple costs; be it with regard to installation, integration, testing, maintenance, employee training & acclimatization – adopting technology is never a one-step process and definitely not free.
Apart from these, there are also hidden costs in the form of disruption to established workflows, irrelevance of certain functions and employees in the new order, that need to be taken into account before any major investment. The true challenge lies in de-risking adoption of technology by lowering these upfront costs and enabling greater accessibility of the new setup to talent through proper training and support.
However, despite these challenges, it is also true that when compared to the past, the cost of owning and developing technology/software is rapidly falling. There are multiple choices now and the speed at which these choices are becoming available is also increasing.
Cloud & mobile technology have made technology more accessible and available through flexible models such as Saas, Paas, etc. And SMEs too are not ignorant of the benefits that technology can bring to their operations and solutions.
The question now is not whether SMEs will benefit from tech adoption, it is more fitting to ask whether technology has rendered these businesses more relevant or not, given the fast pace in which the technology environment is growing and changing world over. Without a doubt, technology has and will render SMEs more relevant especially in today’s context where, economies of scale is fast losing ground, there is a rapid move towards economic & political protectionism globally, and workforce preferences are dramatically evolving.
*The ability to produce more and offer products/services at a lower cost need not spell success anymore. A good example of the same would be the P2P lending providers, who have broken down the traditional authority of banks and other financial institutions by connecting users through technology and thus, made the intermediary irrelevant. Expertise in niche technology enables SMEs to offer services that were out of their league thus far. This dis-intermediating role of technology has also made size of an organization less important and enables SMEs to create impact across industries and service areas such as Customer Acquisition, Supply Chain or Service Delivery.
*The current political and economic environment around the world is one that is moving towards extensive protectionism as evident in the case of Brexit & the Trump administration policies, and governments worldwide are increasing focus on generating local employment, and “turn inward”. The verdict is still out on whether it is a smart move and if long-term repercussions will be beneficial, but it cannot be denied that this represents an opportunity for tech-strong SMEs & start-ups to up their game and make their presence felt in their respective domestic markets.
*The shift to technology has resulted in many companies facing widening skill gaps in areas such as Internet of (Nano) Things, AI or advance data analytics, Augmented / Virtual Reality, robotics, etc. However, this technology-led approach is also coinciding with the rise of the “Gig Economy” – companies investing in hiring freelance, part-time, contingent, virtual employees with specialized skills for a period of time. Not only does the rising gig economy offer SMEs a chance to hire the best talent in a particular tech field, but the technically gifted millennial workforce themselves are seeking employment that will reward them with a flexible and dynamic work culture, offer flexible work timings, and an environment that enables them to steadily upgrade their skills. It is no longer only about compensation, employees now seek a work culture that is more personal and promotes multi-dimensional development. Given such a scenario, time is ripe for SMEs to jump on the technology band wagon and strengthen their ante in the market.
All the above developments are driving companies towards greater collaborative offerings rather than those based on the “we-do-it-all” composite approach. Partnerships (with high degree of technology integration) seem to be the way forward to, with customer acquisition, integrated delivery of products/services, optimizing operations, managing risk & compliance – being examples of spaces within a corporate ecosystem for SMEs to establish themselves.