There’s little denying that tech has helped level the playing field for small businesses. With social media allowing SMEs to market on a budget and cloud access and remote working tools letting them forgo expensive physical premises, it’s clear plenty of start-ups are embracing technology like never before. But understanding what actually drives small businesses to pick up on technological innovations – and what causes them to drag their feet – isn’t always so clear.
Innovation has certainly become the domain of smaller businesses. There is no shortage of small businesses embracing new models and this inevitably requires embracing new tools and techniques. “I’d suggest 25% of businesses have really changed their model,” says Mike Tomlinson, director of small business at EE, the mobile network. In the last few decades, we have seen a proliferation of new business models rise to prominence and start-ups certainly aren’t shy about embracing this. “For example, in pop-up retail people have already changed their business model,” he says. “Technology is supporting that.”
Certainly it is hard to imagine pop-up locations without cloud access to their data or mobile point of sale (MPOS) solutions, but it isn’t always easy to see how they become so firmly embedded in start-up culture. “There is a group that trail-blazes,” says Tomlinson.
“You talk to those guys and they are about as stereotypical as you’d think. They just want the latest tech; they want to see it, they want to prove it for you.” With these tech-savants so quick to pick up new solutions and techniques, one doesn’t have to look far to find evidence of how a new solution might aid one’s business.
These trailblazers often open the door for those who follow; it’s hard for the rest of the community to ignore when one of their contemporaries sees a significant boost from their tech experimentations. “If small businesses see it working and they get positive feedback from someone they trust then the seed gets planted,” Tomlinson explains. Additionally, he believes advocacy and coverage from other areas, including trusted brands and the media, means that small businesses form a familiarity with new solutions and are more likely to hop on board with later iterations. “When the first iPhone came out, for example, it was obviously a much harder sell than the third or fourth iPhone,” he says.
Gradually, through this route, what was once niche becomes mainstream and a mainstay of the small business toolkit. But what is it that actually encourages businesses to embrace new technology?
Often it needs to be based on a clear business case of how it will impact on their daily work. When EE was trying to raise awareness of 4G, it was aware that solely focusing on increased bandwidth was unlikely to make a significant impact on businesses.
Instead it employed a variety of case studies showing how it could make a difference to people’s work, ranging from the attention grabbing – facilitating aerial photography – to the practical – plumbers getting instant feedback on their work from customers via photos and video. “It wasn’t just about moving onto the 4G network,” Tomlinson says. “It was about thinking through how this can really make a difference to your business model.”
And this will inevitably be the focus of any tech adoption by small businesses; rather than being a narrative of why enterprise should adopt one technological advance over others, the real benefit comes from considering the blend that can best benefit a business. “If you take 4G in isolation, you take apps in isolation, you take cloud in isolation, you can do some good there,” Tomlinson says. “We’re trying to just push it a bit further and say, ‘If you really combine these things, you can end up with a truly mobile workforce, a truly mobile operating model for your business.’”
But while the strength of the business case for adopting new tech can’t be refuted, it still doesn’t entirely explain why small businesses tend to pick up new solutions quicker than corporates. “In general, small businesses are leaner, fitter, faster decision-makers,” Tomlinson says. In part, SMEs quick adoption of tech is driven by necessity, as, unlike their larger brethren, they can’t afford to be bound by quarterly operating cycles. “The time taken to make a decision is short because they just haven’t got the time,” he explains. “They can’t deliberate.”
However, Tomlinson does note that there are still plenty of cases where small businesses are behind the curve. “When you dig into it, you find that 75% of them are still on Windows 7,” he says. “You get that dichotomy of: ‘hang on a minute: if you are totally ahead of the game in terms of your innovation, why have you still got clunky software on your PC?’”
So what is it holding some businesses back? Certainly there’s an argument to be made that as human beings we’re more comfortable with the familiar. But in cases where there it is obvious how new tech can benefit a business, what is it that makes small businesses drag their feet?
Inevitably, the word that will be at the front of any entrepreneur’s mind is security. “Once you start taking business mobile, there’s a basic aspect of trust,” he says. “It’s a human thing: how many of your employees do you trust to have your data on their device?”
However, while he feels it’s entirely understandable businesses have these kinds of concerns, he’s keen to stress that we’re unlikely to see the same security fallout with mobile that we saw with the web. “When everybody got onto the web, people woke up to security about five years too late when everyone was getting viruses and data had been stolen,” he says. “But now we’re already very conscious of security; it’s built in right from the beginning. We’re not going to have five years of disastrous examples of why you need it before we put it on.”
While trust is still a big sticking point for small business owners in adopting new tech, from cloud to business apps, some of the industry’s big players are sitting up and taking notice. One example is EE’s Business Apps, through which the mobile provider handpicks reputable apps and provides deals on them to encourage adoption among its small-business customers. For the more cautious of small businesses, big brands adding their credibility to trustworthy solutions stands to win over some of those who sit on the fence.
“There are cons of being a big business but there a pros as well,” he concludes. “There’s an expectation that we will protect our customer data. And obviously we take that seriously.”