Most people realize that digital technologies are reshaping our lives and changing the way we get work done. As cloud computing, artificial intelligence (AI) and machine learning, the Internet of Things (IoT), analytics, robotics, augmented reality (AR) and virtual reality (VR) mature and converge, the possibilities seem to be limited only by our imaginations.
But how are SMB (including small (1-99 employee), medium (100-999 employee) and upper midmarket (1,000-2,500 employee) businesses) decision-makers thinking about and planning for the changes that lie ahead? We found out in SMB Group’s freshly minted 2017 U.S. Small and Medium Business Digital Transformation Study, which takes an in-depth look at their views, attitudes and plans regarding business transformation for the digital age.
SMBs See the Ground Shifting
Many people still adhere to the old stereotype that painted SMBs as technology laggards. However, today’s SMBs are tuned into the digital revolution: Roughly three-quarters of respondents said they agree/strongly agree that digital technology is impacting their businesses and industries.
Figure 1: SMB Attitudes About Digital Technologies
Most SMBs Don’t Understand the Digital Transformation Label
However, only 23% strongly agree that their company has a well-defined digital business strategy. And, despite the fact that technology vendors often use the term “digital transformation” as shorthand for the endless ways that businesses can use digital technologies to evolve their businesses, the term hasn’t sunk in with most SMBs. Only 33% say that they have heard of digital transformation and understand what it means (Figure 2).
But, vendors appear to be making progress in getting their message across. Those SMB respondents that have heard of the term define it (unaided) with many of the same words and concepts that vendors use in their own definitions.
Figure 2: SMB Familiarity With “Digital Transformation”
Where Are SMBs on the Digital Transformation Curve?
When we designed the survey, we were pretty sure that many SMBs would be unfamiliar with the digital transformation term. So after we asked respondents if they’d heard of the term, and if so, asked how they define it, we provided this definition for them:
Digital Transformation: how businesses use digital technologies to create new/modify existing business processes, practices, models, culture and customer experiences.
Then, we asked respondents that had heard of the term to describe their company’s level of activity regarding digital transformation. We learned that 48% are in the planning stage, 36% are already implementing, and 16% have no plans or activities underway. The phase they’re in strongly correlates with company size (Figure 3). Upper mid-market and medium businesses are 2.6 and 1.9 times more likely, respectively, to say they’re currently engaged than small businesses.
Figure 3: Digital Transformation Phase*
Peeling Back the Digital Transformation Onion
From here, we drilled down to get a much more detailed picture. In many instances, there were significant differences based on company size, age of business and industry. For example, the top drivers for digital transformation vary significantly by business size (Figure 4).
Figure 4: Top Drivers and Inhibitors to Digital Transformation by Business Size
We also identified specific areas in which SMBs are investing in technology to further their business goals. We found that “improving decision-making” and improving “employee productivity” topped the list of eleven potential areas across all respondents.
We also asked in which areas in which SMBs are investing in entirely new solutions, versus areas in which they’re augmenting existing solutions. Respondents cited “adding a new sales channel” to be the top area for new investments.
Again, in both of these areas, however, responses varied greatly depending on business size, as well as by business age and industry.
Some of the other key areas we explored in the survey include:
- How far along are SMBs in their pursuit of specific transformation initiatives?
- What specific technologies (e.g. IoT, AI/machine learning, AR/VR, security solutions, cloud, converged IT infrastructure, 3D printing, mobile, etc.) are they investing in to help support their goals?
- Are they supporting new business initiatives and technology investments with existing IT budgets, or incremental funding?
- What vendors do they think are leading the digital transformation curve, and which do they think can help them to achieve their goals?
Want More Information?
We designed this study to help technology vendors deepen their understanding of SMB attitudes, appetite, readiness, priorities and requirements for business and digital transformation. Study results provide vendors with essential information to help plan, position and market products and services for SMBs.
If you’d like to learn more, please get in touch with Lisa Lincoln, who can provide you with a full table of contents, methodology, study pricing and any other information: lisa.lincoln70@smb-gr.com or (508) 734-5658.
Source: Laurie McCabe’s Blog