Common mistakes, keys to success, case study, and practical action plan
SMEs are often said to be the backbone that supports the UK’s economic growth. Therefore, to drive and maintain long-term growth and efficiency, it is key that these businesses make informed, strategic investments for now and the future.
At the top of many SMEs’ agenda is technology, which is crucial to facilitating their journey towards growth, as neglecting it could have far-reaching impacts on businesses.
While SMEs in the West Midlands are increasingly looking towards digital innovation, many need to make smarter, more effective decisions to invest in technology that aligns with their business plan. Handily, they can take advantage of localised support, funding and assistance to help them reach those goals.
While many businesses have set funds aside for technology investment, too many make misguided choices that may end up costing more in the long term in time, money and resources. For example, 30% of SMEs in the West Midlands were dissatisfied with their technology investments, according to a report from Barclays Eagle Labs, with significant issues including incompatibility and lack of integration with existing systems.
There is a danger in focusing on immediate needs rather than long-term strategy .A survey by the West Midlands Combined Authority (WMCA) found 25% of SMEs made technology purchases that did not align with their long-term strategy.
Seeing technology spend to manage cost and administration, such as IT, misses the point that it can be a revenue or expense driver in itself.
For example, outdated hardware and software can cause compatibility issues and flaws in security, such as data being compromised. It can lead to repair costs beginning to exceed replacement costs.
Another common mistake is investing in tech but not arranging sufficient training. Rather than a distant voice on a phone line or automated IT support, specialised, local and reliable IT support may be a more effective tool.
Some businesses focus on ‘what’ a tech solution does, rather than ‘how’ it will suit that organisation and its specific needs. Others look to cheap solutions that may cause problems with integration and performance where a more considered option may bring a greater return on investment.
This kind of strategy can backfire, with a sizeable impact on both running costs and profit resulting from using outdated, unsuitable or low-quality solutions.
Finally, like any investment or major change, not having a long-term strategy in place for how to successfully make use technological innovations is a major pitfall. If SMEs are to make these digital transformations work, they must take a comprehensive approach, considering the integration and their overall business strategy.
When an SME makes an investment in technology, it should treat it as a piece of strategic planning just like any other. Companies should align their purchases with specific business outcomes rather than immediate outputs. This involves setting clear goals, working with specialists, and prioritising user experience. This can help ensure that their technology investments drive productivity, efficiency and long-term success.
Technological advances never stay still for long. According to data from Beaming, UK-based SMEs will invest £60.3 billion in new technology in 2024, with automation, AI and e-commerce among the top technology priorities. Companies clearly need to ensure they are budgeting for digital transformation to stay competitive and build sustained success
It’s also true that employees can be more productive with better technology tools at their disposal. Some 87% of SME leaders noticed an improvement in productivity when they supply employees with new tech, alongside 77% noticing a boost in morale, according to Virgin Media O2 Business’s Tech Untapped report.
There are wide-ranging benefits of taking on a digital transformation strategy. From enhanced efficiency and productivity to increased agility and flexibility, the advantages will be apparent to SMEs. Digital channels such as social media, eCommerce and real-time responses can boost the customer experience and give a competitive advantage.
One of the key factors that can hinder how SMEs use their new tech efficiently is not getting the right kind of support once they’ve purchased it. It’s important to consult with experts who can help them make the most effective use of these new functions effectively, to back up the investment they have made by implementing automated processes, IT hardware, cybersecurity solutions or collaboration tools.
It is vital to build a strategic, phased approach to implementing technology. SMEs should first evaluate their business strategies and operational goals. They can then begin to leverage the benefits of local expertise as a tool to guide them through digital transformation.
Localised technology clusters can offer support for smaller businesses to grow at their own pace and can provide resources to suit SMEs’ own specific needs. In the past five years, there has been a significant increase in tech hubs beyond London. These provide an opportunity for regional specialisation, to provide local SMEs with access to tools and strategies, and to make it easier for local businesses to achieve sustained growth.
In the West Midlands, Made Smarter provides guidance for SMEs to develop an action plan for adopting digital technology. This includes creating a detailed roadmap to help ensure the firm makes the most of its technology investments, which could include employee training, funding, or expert support.
Technological innovation can have a driving force of its own. By continuously assessing and refining their digital strategies, businesses can achieve sustained success.
Bridge Cheese is a Telford-based cheese processing and packing business. It recognised that digital transformation was a crucial part of improving efficiency and achieving growth. To do this, the firm worked with Made Smarter West Midlands to implement digital technologies and improve its operations.
One of the first things they did was to implement a data-driven approach through the Enterprise Resource Planning (ERP) system. The new technology integrated aspects such as production, inventory, and order management. The ERP system enabled them to collect and analyse data more effectively and make more informed decisions.
Training and development in digital skills was vital too. The company’s leaders took part in Made Smarter’s Digital Leadership programme to gain insights into digital transformation strategies.
This digital transformation streamlined their processes and improved overall efficiency. The benefits included enhanced inventory management, production planning and better visibility into business operations. These developments resulted in better strategic decisions and increased market competitiveness for Bridge Cheese and helped them look forward to future growth.
By using a local partner such as Made Smarter, Bridge Cheese was able to access the support and funding they needed to buy and implementing the right technologies for their business growth.
Think holistically: consider what the impact might be on the entire business
Adopt a phased implementation approach
Set specific, targeted and timed goals and focus on outcomes
Work together with specialists and leverage local expertise.
Don’t rush into technology investments without proper planning
Don’t focus solely on short-term solutions
Don’t overlook integration and long-term strategy
Don’t neglect user experience and change management.
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