Why being a small business gives you a head-start in digital transformation

What do small, nimble companies have over huge, legacy systems based organisations? We lay out the advantages of being small.

There was once a time when being a small business meant you were at a disadvantage when it came to technology. There were too many systems to buy, too many pieces of essential hardware – and it all cost tens of thousands of dollars.

Now, the situation is nearly the exact opposite.

Not only do small businesses have an advantage when it comes to using technology, bigger businesses may also be at risk of being at a disadvantage – stuck in legacy systems that are too expensive to modernise.

It really is a startup’s world.

The primary shift has been the outsourcing of services to the cloud.

From email and accounting, to more complex CRM, cloud tech is reducing costs for startups and small businesses. There’s no need for costly infrastructure, nor human resources to maintain it.

Likewise, an increasing number of powerful products that provide machine learning and the analysis of large data sets – a critical development emerging across all industries – are becoming low-cost or even free.

This is a huge advantage over big businesses, many of which are struggling with legacy technology.

This is evidenced in a 2015 Deloitte survey that found that CIOs of larger businesses are struggling to prepare for some of the biggest shifts.

“Globally, three out of four CIOs picked analytics and digital as two technologies that will impact their business in the next two years. But many CIOs said that to take full advantage of these technologies, they would need to revamp their existing legacy and core infrastructure. Many are finding it hard to get the funding to do that.”

Meanwhile, smaller businesses are able to adopt newer tech that has analytics capability in-built, giving them access to deeper information across a wide range of businesses processes.

All of this combined with the fact that many cloud services are based on subscription fees and not large up-front costs, SMEs are at a huge advantage to scale quickly – if they use the right services.

Likewise, it is much easier for small businesses to adopt technology that provides a better customer experience, a factor that’s critical these days as the imperative for companies to compete on customer experience grows exponentially. When changes are necessary, SMEs and startups can make decisions speedily – differentiating themselves from their larger brethren.

But this advantage also comes with responsibility. SMEs must be nimble when it comes to adopting new systems, and also dispensing with systems that do not work anymore.

The good news is that businesses are already prepared to do this, as the following infographic drawn from Canon’s research reveals:

Small businesses are ready – and they recognise the long-term benefits of transforming IT services quickly. But there are also concerns:



This means any digital transformation needs to be resource efficient. But it remains essential.

Here are three ways small businesses should be using technology to their advantage when it comes to digital transformation.

1. Have a comprehensive digital strategy

As the Harvard Business Review found in its recent survey, companies that rate highly in both digital leadership, and management, have better results than their peers, “with stronger revenue growth and greater profit margins”.

Digital leadership starts from the top. Not having it costs you.

2. Make decisions, and make them quickly

In a McKinsey survey, the consultancy group found that large companies are poor at managing “return on attention”.

“In our experience, many companies are more comfortable analysing and debating than they are acting decisively and intuitively. Their default orientation toward more and better information binds and restricts their ability to move surely and quickly.”

Small businesses are able to counter this by making decisions quickly. Don’t move on a whim – but don’t dawdle. Be quick.

3. Start with the customer

It’s important to think about digital transformation from the customer’s perspective, and not from how things will change on the inside. As the Harvard Business Review has found, in a survey of CIOs, customers are everything.

“Starting with the customer is a fundamental principle for how we operate and engage” with IT services, one respondent – the head of marketing at a credit card company – told the survey.

Customers come first. Always.

Find out more about how digital transformation is changing the way SMEs work.

This article was originally published on Smart Company, and has been republished with permission.