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The power of technology

Written by Piers Linney on Tuesday, 03 August 2021. Posted in Insight, Innovation, Analysis, Technology

Entrepreneur Piers Linney identifies the reasons why SME owners often struggle to embrace technological change.

The power of technology

Entrepreneur Piers Linney identifies the reasons why SME owners often struggle to embrace technological change.

I spend a huge amount of my time supporting entrepreneurs and small business owners. I do this through writing content, attending and speaking at events, and in my role as a non-executive director of the UK’s development bank – British Business Bank. This bank has facilitated over £90bn of financial support for UK businesses. 

I have founded, partnered with, invested in, advised, and even acquired many small and new businesses. And I am a firm believer in the power of technology, which can empower small businesses and entrepreneurs.

Technology creates opportunity while levelling playing fields. It provides access to new markets, automates regular and mundane processes, saves time, and turns local niche operations into global opportunities. With the click of an icon, small business owners can now generate data, analyse statistics and remove the guesswork from expensive activities such as marketing. 

Technology helps to increase revenue and build stronger customer relationships. Perhaps, most importantly, there is the need for technology and modern business to drive efficiency and boost productivity, so that more can be done with the resources in the time available. The benefit for small business owners is greater income, reduced costs and less risk. The Covid-19 pandemic has accelerated the pace at which businesses have embraced technology and the changes are permanent; we will not be returning to 2019.

Research carried out by Be The Business illustrates that it took just three months for three years of forecast innovation and technological advancement to occur at the outset of the pandemic. Although small businesses are the backbone of the UK economy, their take-up of modern technology and business tools has been woefully low. The lack of innovation being deployed is resulting in reduced productivity, lower growth, smaller profits and lower employment.  

On average, UK small businesses are losing one day-a-week in productivity by their failure to adopt available technology. Yet this is not due to any lack of ambition. Small business owners are often neglected, misunderstood, oversold and badly advised by traditional suppliers. Existing suppliers are just not set up to provide good guidance for small businesses. 

Here are four areas where small business owners would benefit by upgrading to new software solutions, if only they could identify the best choice for them.

Sales and marketing

Digital sales and marketing offers a huge opportunity for growth. However, many SME owners find this complex and confusing. They struggle to identify the best available software, how to make the most of it, and how to develop and execute digital marketing strategies or manage sales funnels. Many find concepts such as search engine optimisation (SEO) difficult to master.

Financial management

On programmes such as Dragons’ Den, budding entrepreneurs are often destroyed by their failure to know their numbers. And this is despite the availability of excellent software products that provides accurate information on accounting, data analytics, financial forecasting and even employee performance. Accurate financial data can now be acquired in real time to improve decision making.

Operations and productivity

Any business can use technology to streamline and simplify operations, and maintain a handle on security. Software is important, but companies can now also access modern business tools, such as HR or legal support, and even talent over the internet.

Administration

Technology can be used to automate almost anything, such as expenses, overtime and monthly pay. Admin is unavoidable, yet time-consuming. It needs to be minimised, especially for time-poor business owners who sometimes don’t find enough hours in the day to spend on running their business.

All sounds so sensible, but why isn’t technology being used to solve these issues?  There are seven main reasons why small businesses are failing to embrace available technology which would increase productivity and boost profits.

1: The cloud services model

There was a time when a local IT professional dealt with everything from hardware, software, security and data storage. Another local business would assist with communications, before the power of ‘cloud computing’ changed all of this. Nowadays, infrastructure and software is available via a subscription. It no longer costs for a local IT or communications’ specialist to support such solutions. And they no longer have hardware sales opportunities as the infrastructure has moved to the cloud. What was once capital expenditure is now a monthly expense, and can be scaled up and down to satisfy the needs at any given time. In theory, small businesses can now access the same infrastructure as large ones. However, access to support, guidance and the information required to purchase, deploy and manage these solutions is almost non-existent for SMEs.

2: Services are not designed with small businesses in mind

Many software-based solutions are designed for large corporations and are merely tweaked for small business. I am always surprised that large enterprises use more technology per employee than small businesses. They better understand the power of technology and employ well-paid teams of people to create a highly efficient service. They benefit from services that can easily be deployed and integrated with a few clicks, or lines of code. There are solutions specifically available for small businesses but identifying them and then making sound purchasing decisions remains difficult. Therefore SMEs often miss out on the best precise packages, and usually end up purchasing more generic software which rarely hits the spot.

3: Adoption is too expensive or too difficult  

Buying new technology or business tools is one thing. Using it as it was intended is another. SME owners expect more from new investments and end up feeling frustrated. It can all seem like a waste of time and, even worse, money. Solutions designed for large enterprises, or those that require hours of training, are often not the right choice for owner-led businesses looking for fast and low cost improvements. They want everything from purchase, deployment, adoption and management of solutions to be simple. Some 53% of those who responded to the aforementioned Be The Business study had experienced an unsuccessful implementation of new technology.

4: The switch to a new software system is feared

The fear of losing time or customer data during a migration to a new system is often considered too risky and is frequently a barrier to change. This inertia creates business paralysis. Some ‘solutions’ are even purchased yet never deployed. More than 40% of respondents believe switching can be disruptive. Years of customer data may even remain in spreadsheets that are never backed up. Yet the fear of losing data when transferred to a cloud-based software solution remains real. The experience of a poorly executed migration can affect business owners for many years, perhaps even decades. More solutions should be designed for small business owners who suffer from this irrational fear of losing vital information. They require products that provide peace of mind.

5: Lack of expertise and support 

One of the main reasons why SME owners are reluctant to upgrade their software is simply a lack of understanding and knowledge about the options available. They may also not be aware of the support structure in place to assist them, when things go wrong. As referred to earlier, there is far less support and guidance available for small business owners, than there is for multi-nationals, while one-to-one support isn’t affordable for the vast majority of SMEs. These owners may even struggle to find the time to check out the various options, and when they do carry out research discover there is a plethora of conflicting advice. Fear, uncertainty and doubt (FUD) are the enemies for these owners, yet it’s imperative that they have access to objective guidance.

6: End-users don’t adopt solutions 

End-user adoption and training is the key for any business owner keen to maximise the return from investment in new technology. Employees typically don’t like change and may also be reluctant to ask for help. Access to guidance and support for these workers is fundamental, as well as being necessary for any successful deployment to occur. Sometimes they may avoid using the new software at all, and this increases risk, reduces control and may even threaten legal compliance. Software is upgraded, improved and evolves over time, so continued support and guidance is part of the overall process. Some service providers recognise this and provide assistance to ensure adoption rates are high. It is in their best interests to show customers useful and time-saving features. Without adoption, customers don’t return.

7: Apathy 

Good old fashioned human apathy cannot be underestimated. Apathy can be cultural, with many remarks such as: “If it ain’t broke, don’t fix it.” Many owners are worried about the cost or disruption, as well as the time required to learn a brand new system. Apathy dulls innovation and stunts growth in those businesses not prepared to embrace evolving technology which can certainly transform how they operate.

If you own a small business think about using technology to super-charge your operation. You can do more with less: Greater productivity, increased profits, reduced costs and risk and more time to enjoy other things.

Find out more and join the Moblox community at http://www.moblox.com

About the Author

Piers Linney

Piers Linney

Piers is an entrepreneur and investor with experience across a range of sectors including technology, converged communications, and additive manufacturing. He is the Founder and CEO of Moblox, a next generation technology and business tools platform for UK small business owners.  Piers is well-known as a champion of entrepreneurship and SMEs and a regular media commentator and is probably best known as a former Dragon investor on BBC 2’s Dragons’ Den and from Channel 4’s The Secret Millionaire.

Piers has a professional background as a qualified corporate finance solicitor and in M&A investment banking at Credit Suisse.  He was a non-executive director of the UK government’s development bank, British Business Bank during the roll-out of the £90bn Covid-19 business support loan schemes.  Piers has been recognised as one of the UK’s top 100 most influential Black Britons and in 2020 he was recognised as one of the UK’s top 20 Ethnic Minority Executives. Piers is an Adviser to Sky and sits on its Diversity Advisory Council.

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