Management

Why Small Businesses Need a Digital Strategy

Research finds that organizations know they need to embrace technology to grow, but don’t know where to start.

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Laurie McCabe is a partner at the SMB Group and one of BizTech magazine’s 30 Must-Read Small Business IT Bloggers.

Here’s a question: If small businesses know they need to invest in new technologies to support and enable growth — and research indicates clearly that they do — then why aren’t more of them planning more aggressive tech investments?

According to Spiceworks, among businesses with fewer than 100 employees, only 36 percent expect to increase their IT budgets in 2019; 48 percent plan to keep their budgets the same.

The problem isn’t that leaders are unconvinced of the value of tech as a business driver: 74 percent of business leaders SMB Group surveyed last year agreed that “using new technology effectively is key to our company’s survival and growth.”

And it’s no coincidence that 76 percent of those making new tech investments are forecasting revenue growth.

Lack of Strategy, Not Funding, Hold IT Budgets Back

So, what’s the disconnect? What really holds businesses back isn’t so much lack of money, but lack of a digital strategy.

When we asked small businesses to define their biggest barriers to adopting and deploying new technology in transformative ways, 34 percent cited budget constraints.

But roughly as many respondents worried about difficulty integrating new technology with their existing IT infrastructure (34 percent); lack of internal IT resources to support new solutions (33 percent); and challenges determining which solutions are right for them (31 percent).

In our survey, only 23 percent of business leaders strongly agreed that they “have a well-defined strategy to use new technology solutions to transform their businesses.”

What really holds businesses back isn’t so much lack of money, but lack of a digital strategy."

Laurie McCabe Partner, SMB Group

Although this problem isn’t unique to small businesses, it is more common among them because they’re less likely to employ CIOs, who tend to lead long-term IT planning processes in larger organizations. But whether it has a CIO or not, every small business needs a digital strategy.

A good digital strategy seeks to align an organization’s business objectives with its technology. That includes an inventory of what it is using now; identification of the tech categories needed to drive toward the business’s goals; and guidance on how it will integrate new tech with its existing infrastructure, or whether it will consider more wholesale changes to that infrastructure. It should also define how it will manage and secure its technology over time.

In other words, it should directly address each of the tech-oriented concerns small businesses cite in surveys such as ours. The digital strategy will then inform its budget decisions.

3 Key Trends Driving Digital Strategy

Those developing or updating their digital strategies now should bear in mind three high-level trends that are now converging:

Analytics, worker productivity and customer experience are top priorities. Small businesses most often start with these solution areas because this is where technology’s transformative power can most easily be seen.
Cloud is king. Many SMBs were initially drawn to the cloud because it provided a cheaper and easier way to manage business solutions. But they’re now finding that modern cloud platforms also serve as a springboard to more advanced technology, such as AI and machine learning, which vendors are building into their solutions.
The workforce is changing. As millennials enter their prime work years, employee expectations of work are shifting. Businesses must provide technologies for employees to work anywhere, anytime and to collaborate digitally just as easily as they do in person.

Small businesses are embracing technology as a driver of change. But many remain unsure about where to start their digital journeys. What I tell businesses is simple: Start with a strategy that joins the business’s unique goals with the solutions that support success.

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