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Small businesses face big challenges when it comes to adopting new technologies. From significant financial considerations to obstacles with implementation and — due to the rapid pace at which technology changes — fear of obsolescence, many small businesses are hesitant to make any technological changes to their operations.
However, forgoing new technologies isn't always the best move for small businesses. Staying with old — and even antiquated — systems can actually end up becoming more costly to small businesses. Solutions such as cloud computing, mobile, social and analytics can help businesses immensely by making it easier to run the organization, offering more efficient processes and providing more effective ways to engage with customers. The question is, how do small businesses know when it's time to make the leap?
"Small businesses think long and hard about where to invest the resources they have," said John Mason, general manager, midmarket at IBM. "[This includes] where they can make the most impact and best deliver real innovation to the market. For most small businesses, this means not investing heavily in an IT department."
The decision is made even more difficult by the sheer volume of technology choices available today, Mason added. And it's not just about the different types of technologies that exist — there's also the matter of whether they are suitable for smaller companies.
"[Choices range] from consumer products applied to small enterprise, to large enterprise solutions you might try to scale to smaller enterprise use, to those created especially for start-ups, and just about everywhere in between," Mason said.
Moreover, there are several related issues that go into the decision-making process, such as the people involved and a business's capability to actually implement new technologies.
"Thinking ahead about what new technology to adopt often falls to people running other parts of the business, who are often pretty tech-savvy but already overloaded," Mason explained. "Combine this with a somewhat limited access to capital, and the task of choosing and implementing new technologies can seem overwhelming."
All of these challenges shouldn't prevent small businesses from making changes, however. Today's technological advancements have actually made it even easier for small businesses to adopt new devices, software, services and other types of technology. One example is cloud computing, which has allowed small start-ups to compete with larger, more established businesses.
"The convergence of cloud, mobile, social and analytics is acting as a force multiplier for small businesses, making it possible for them to rapidly invent, get to market and compete, and outmaneuver bigger rivals," Mason said. "No longer is a small business constrained by its IT department or CAPEX [capital expenditure] challenges. In fact, with cloud, virtually any technology needed to make a business run smarter is within reach."
Mason, who is also the global head of IBM's sales to small and midsize businesses (SMBs), spoke with Business News Daily about how the cloud, mobile, social, analytics and other tech solutions are helping small businesses grow and solve problems in new ways. He also offered tools and tips that small businesses may be overlooking but that may ultimately help their operations and how they engage with consumers.
Business News Daily: How have cloud services changed over the years to better benefit and be more accessible to small businesses?
John Mason: Over the years, the capability in the cloud has expanded, now addressing most of the IT needs of small businesses. Many small enterprises don't realize all that can be done in the cloud and how it can benefit their business.
For example, infrastructure as a service (IaaS) is a great option for small businesses with small or no IT staff, providing shared or private computing resources both on and off premises. Another benefit of cloud is the ever-growing availability of enterprise applications — everything from customer relationship management to mobile device management. Today, 85 percent of new software is built for the cloud, according to the IDC report "IT Cloud Services at the Crossroads."
What makes the cloud ideal for small businesses is the minimal upfront investment and fast implementation time, making technology solutions more accessible to small businesses than ever before. The cloud is transforming IT and business processes and enabling a new world of creativity and innovation for today's small businesses. With the cloud, they can focus on core capabilities and growth, not IT and infrastructure costs and requirements.
BND: How are mobile technologies helping small businesses grow?
J.M.: The spread of cloud-based mobile solutions is helping small business owners easily and affordably arm their workforce with key applications and company information on the go. Having valuable customer data or inventory information at the touch of a finger can help improve efficiency and enhance customer relationships as they grow their business.
This new level of mobility also enables small entrepreneurial businesses that historically were confined by geography to establish a global presence.
In addition, many businesses, including a new breed of "born on the cloud" businesses, are leveraging mobile apps to drive their business. In a day and age where customers expect to have everything they need on a mobile device, being able to easily provide an app that makes it easier and more convenient to do business with your company is a huge competitive advantage. Many companies are building "mobile-first" businesses — those driven through mobile experiences based on the cloud. Companies like MyMenu, a mobile food-ordering business, and Good.co, a self-discovery app that helps individuals find the right career, have used IBM BlueMix to quickly develop their mobile businesses via the cloud.
BND: What are some of the best technologies small businesses can use to better engage with customers and increase sales?
J.M.: I think it's a combination of cloud-based solutions and analytics, combined with smart use of mobile technology and backed by a social media strategy. Using cloud-based solutions removes big upfront capital investments in technology and staff.
Social analytics can help our clients better understand their customers — deriving insights from social data to uncover trends, preferences and predictions.
Mobile helps organizations fail faster and succeed sooner — getting the right information, experiences, products and services to users more quickly than their competition.
These technologies drive growth by allowing companies to go quickly from an innovative idea to an actual product or service, and often remove geographic constraints to opening new markets. All of these technologies are available to small businesses today, in forms that can scale as their business grows.
BND: Why is analytics so important for small businesses? What are the different types of analytics tools, and in which areas do they play the most significant roles?
J.M.: Analytics may be even more important for small businesses than it is for big businesses — it can reveal insights, patterns and predictions that time-pressured small organizations don't always have the time or expertise to come up with on their own.
Here's an example: Tacoma, Washington-based Point Defiance Zoo & Aquarium has just 80 full-time employees. On a daily basis, millions of data records are generated on visitor exhibit and special event preferences, along with significant visitor feedback generated on social channels, such as Facebook. The zoo used Big Data analytics to uncover patterns and trends in its data to help drive ticket sales and enhance visitor experiences. The result: Point Defiance Zoo's online ticket sales grew more than 700 percent in the first year, with online sales expected to increase by up to 25 percent.
With analytics, small businesses can gain insights from data that foster a deeper understanding of customers, operations and markets, enabling the organization to act when and where the positive business impact is greatest. This ranges from obtaining internal data about employees, to inventory management and prediction, to gaining deeper insight into customer needs, mining social media to better understand customer and prospect behaviors and managing company reputation.
BND: Which types of technologies do small businesses overlook the most?
J.M.: The one that is perhaps most underutilized, especially in terms of its payoffs, is Big Data analytics. I suspect the name may be off-putting for small businesses, which often view this as too complex, or something only big companies can afford. In fact, research by Small Business Group reveals that only about 18 percent of small businesses use business intelligence and analytics solutions.
We also see tremendous opportunity in mobile. While most small business owners are power users of their own phones and tablets, they don't often use mobile devices to their fullest potential within their company or put the right mobile device management in place to protect their valuable and proprietary company and customer information.
BND: Some small business owners think that tech is changing so fast that they'll implement something one day and something new will come out the next. What are your thoughts on this mindset?
J.M.: It's true that technology changes very quickly. Smartphones are a perfect example. I'm eagerly awaiting my new iPhone. But being reluctant to acquire new technology out of fear of obsolescence is a mindset that comes at a huge opportunity cost.
For example, the gains that a business can achieve by equipping its employees with mobile devices or acquiring an application that crunches its customer data and reveals surprising ways to grow revenues will far outweigh the cost of needing to move to an upgraded application or replace mobile devices periodically.
Another example is the emergence of cloud computing, which lets small business owners take advantage of the latest technologies and features without having to worry about managing servers or replacing software on each employee's PC.
Most technology is now available as a service, and that makes change easier.
BND: What would you say to small business owners who are hesitant to try new technologies?
J.M.: Start with a small trial. Pick just a few employees to test a new mobile app or buy just five or 10 licenses for a cloud solution you might want to try, or look into some of the try-and-buy offerings out there. Quite often, there's a free version of a product you can use that has some of the features disabled but will give you a good idea of what the solution might do for your business.
Go into the project with an idea of what your idea of success looks like, but don't be discouraged by setbacks or unexpected challenges. (It might help to keep in mind Thomas Edison's famous quote on his way to inventing the lightbulb: "I have not failed. I've just found 10,000 ways that won't work.")
The benefit of piloting a new technology with a small group is that it lets the rest of your business continue with little or no disruption. Secondly, take advantage of your network. Pick the brains of other small business owners or online communities like StartupNation or those designed specifically for small and midsize companies, like Midsize Insider.
BND: Where do you see the future of small business tech going?
J.M.: Mobile devices will play an increasingly central role in the operations and core capabilities of businesses, especially among small businesses, which often adopt a mobile-first approach. This trend will force advances in mobile security — for instance, the precautions needed around both employee bring-your-own-device (BYOD) and the protection of customer data.
But we're also seeing a growing trend among small businesses where they are really unleashing their creativity and becoming "collaborative innovators," focusing on their core competency and building things together, rather than operating in a proprietary, independent way. I see this among the start-ups in the SoftLayer Catalyst program and more broadly among start-ups everywhere.
Cloud computing, open APIs and explosive app development are making this type of collaboration possible on a larger scale and at a faster pace. I think innovative SMBs will continue to show the way and demonstrate that technology is an important tool that enables new forms of collaboration and direct engagement with customers, which is really the foundation of how small businesses operate.
This is such an exciting time for small business owners who can take advantage of their agility and imagination to put technology to work for them.
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