A recent NZIER report  “Going digital in 2025: The economic benefits of digital tools” discusses how accelerating small and medium size enterprises (or SMEs) is a major economic opportunity with the ability to boost our country’s output by NZ$8.6 billion in 2025 alone.

The report highlights a number of global trends where digitisation is accelerating and reshaping industries and economies. 

It’s a compelling case for adopting digital tools, but is aimed at policymakers, not the market it addresses – New Zealand’s small and medium sized businesses.

The upsides are big:

“Organisations that proactively embrace these trends are better positioned to thrive in the evolving digital landscape.”

But, it’s also complicated, as the report highlights:

 “the multifaceted nature of digitalisation, encompassing technological advancement, security, sustainability, and inclusivity. “

If you are a SME business owner, but not involved in IT, how on earth do you make the most of these opportunities? It got the Edge team (we’re an SME) to thinking about practical steps businesses can take to move along the path to gain some of those economic benefits.

How can business owners make decisions that don’t cost the earth, avoid the hype associated with many technology solutions, but provide a path forward for improvement?

Here are some things to consider when prioritising your uptake of technology:

1.      Be aware of the tech ‘hype cycle’
There is a real hype cycle with new technologies as suppliers and manufacturers (with very large marketing budgets) make claims about their products that sound straight-forward and are ‘must haves’. However, they can be difficult to take advantage of, particularly in the early stages of adoption, when the reality of using the technology may not initially match up with the promises made. Artificial Intelligence (AI) is the most obvious example at present, but CRMs and mobile technology are other examples of technology solutions that have gone through a hype cycle.

What you can do:  only try or piloting new things that make sense for your business. Start on a small scale, set up timelines and goals for evaluation.

AI is a good example. Work to understand what the technology offers. See if it works and iron out the problems, or at least understand the issues and business value, before launching into significant change or cost.

2.      A lot of technology change becomes “must dos” to keep competitive
Some technology implementations are really keeping up with others in the industry. NZIER writes:

Digitalisation is increasingly recognised as a critical driver of SMEs’ growth, productivity, and resilience. As the global economy becomes more digitised, the ability of SMEs to adopt and integrate digital tools, such as cloud computing, AI, and data analytics, has become essential to their competitiveness and sustainability.

What to do: This is essentially keeping up with the others in your industry to keep competitive. If everyone else around you is adopting some form of technology, you need to too, as the ‘status quo’ means you are going to lose market share.   Allocate budget, identify the key priorities and how fast adoption is moving in your industry.

3.      There is a first mover advantage, but it is often short-lived as others in the industry catch up and use the technology to innovate themselves.

When I first started in the tech industry, the most common improvement in productivity was moving basic office tasks to electronic versions – document creation and electronic spreadsheets. These allowed firms to cut costs and improve and speed up decision-making. Now, Microsoft Word and Excel are simply standards for office work and are used be all organisations.

However, smaller businesses can take advantage of technology faster than large companies with legacy systems that are harder to change. This means first mover advantage can apply to SMEs as much as large companies with bigger budgets.

What to do: identify where technology can give you an advantage over your bigger competitors.  Act ‘scrappy’ to get things implemented quickly to give benefits to your customers, while larger organisations may struggle.

4.      Access to world class software

Many cloud-based services, typically bought or trialled at low or no cost, provide organisations with access to very capable systems previously only available to only to companies with large budgets and IT capability. This is a significant opportunity for SMEs.

For example, HubSpot or Salesforce provide CRM (Customer and sales management) capability (and more) that was previously only available to large companies (because CRMs required multiple servers, database support and application management). Now these are purchased via credit card with incredible personalisation available off the shelf.

What to do: make use of these technologies to run your business.

The cost to implement is much higher than the software cost alone, so planning is key. I have made this mistake myself as I’ve enthusiastically embraced new technologies. Data integration with other applications, application set up, staff training and a focused approach to solving immediate problems must be considered.

5.      Look for relatively easy things to invest in first
What paper-based systems make sense to digitise? Can a digital workflow replace a manual one? Are you finding data is shifting between systems? Is this a manual operation (slowing down information flows and making mistakes easier), can the data flows be electronically integrated? What processes are complicated or time-consuming? How can these be sped up?

All of these things reduce effort and improve accuracy.

What to do: start with an audit, ask staff for suggestions or bring a third-party in to help.

6.      Are your existing systems ‘modern’ and do you have control over these?
If you have local servers or storage, are these needed (they may be)? Are they being backed up properly? Is there a cloud option? is your security up to standard for a business of your size?

Larger companies usually address these things formally and as a result consider the risks and benefits in a purposeful way.

What to do: conduct a simple risk assessment of your key systems.  Smaller businesses need to at least think through the consequences and put in place practical actions to resolve potential problems.

7.      Manage the numbers of technology end points

It surprises us how often organisations end up with unused services, or services that are partly used.

What to do: schedule a regular audit for all your systems - everything from software licences to mobile phones and understand duplicated services.  You can quickly get an idea of what can be saved.  It is very common to be paying for services that are not being used. These are quick wins.

Do it once a year.

8.      Manage change carefully.
Larger businesses tend to have more resource to focus on business change using project managers and change managers. The key is fast but planned change.

Suppliers are a great source of solutions, but are not the right people to help your organisation change.

What to do: set up project management for big or critical pieces of work.  If you don’t have internal resource or expertise, get someone to help you on a short-term contract basis.

9.      You need a framework to help prioritise and size new initiatives, such as the ones mentioned above.
Even though our team have tried to distil the learnings from the NZIER report to make it easier for small and medium businesses, we still acknowledge there is a lot in there which may, at times feel overwhelming.

I have found while business leaders conceptualise new tech quickly, the time it takes to implement new systems is underestimated and by implication under costed. Having a framework, or ruler to gauge the performance of your business against is helpful and answers questions like:

o   Where am I best to spend effort and expense?

o   What existing services are most in need of improvement?

o   What is the best guess of implementation cost and disruption?

o   What is the best order for projects to be completed in?

o   Where should new initiatives be prioritised?

o   Is my current IT spend effective?

o   Are my current IT suppliers performing adequately and are they the right ones for your business?

If you’d like to have a chat about any of this for your business, get in touch. Call Kerry on 021 436550 or email Kerry.McFetridge@edgeconsulting.nz

We are independent IT consultants and we’ve worked with organisations throughout New Zealand and helped them turn technology into business advantage, bringing expertise and delivering programmes of work on time and on-budget.