Digital technology has fundamentally changed the global economy. What’s less obvious is how Australian SMBs have embraced this shift and integrated it into their own business practices.
Ninety-nine percent of Australian SMBs are internet-connected and on average they do 34 percent of their procurement online, according to the last Sensis e-Business Report. Research for Telstra Business shows six-in-ten of them allow their staff to work from home and 34 percent have workers who spend more time away from the office than in it.
More than half of Australian SMBs use mobile broadband regularly and smartphones that can access email and the internet make up more than two-thirds of Australia’s SMBs mobile phones.
So what are the implications of these shifts, given that companies with fewer than 200 employees make up 96 percent of all businesses in Australia and are the engine room of employment growth in most sectors of the economy?
Firstly, if you’re a big business working with small businesses, listen well and make what you say both understandable and relevant. As a dedicated team serving SMBs, Telstra Business has just celebrated its sixth birthday and late last year we welcomed our one-millionth small business customer.
In that time we’ve learned many lessons. One is that small business is not one homogenous group. Some small business owners are very focused on fast growth and building scale. Others are more concerned with maintaining a balance, for themselves, their families and local community. For others, achieving a regular and stable income and building a buffer against hard times is challenging enough.
The commonality is they all want to know that whatever technology they invest in will make a tangible difference to their business.
Another great learning is being responsive to customer needs. Disruptive technologies are innovations that change a market in unexpected ways. Tablets are a great example.
Some of our research in late 2011 found that two-thirds of those Australian small business owners already using mobile broadband were considering buying a tablet such as an iPad. That compared with only nine percent who were using tablets at that time (a number which is rapidly on the rise). We asked businesses already using the devices how useful they were and found that 86 percent were “very satisfied” or “satisfied” with them.
Of course, these devices are only as good as the networks they are connected to, so when the new iPad launched in February, we made sure we channelled sufficient stock through Telstra Business Centres to meet small business demand and give business customers the best experience possible, by making sure they are connected to the best networks.
Small business people are going to lead the growing digital charge because they are quick learners and always on the lookout for productivity enhancing tools. In addition, unlike enterprise IT managers, they don’t face a range of complexity and “legacy” changeovers.
These decision-makers listen to and watch their peers – very closely. While a third are active embracers of technology, even the enthusiasts are careful to make sure there is a business benefit before acting.
Smartphones have been “the great enabler” for SMBs adopting digital technology because they allow a manager to work almost anywhere at any time where they have a wireless signal. Tablets will lead the second wave of digital adoption because they allow more flexibility and ease-of-use and as business software, like Microsoft Office, becomes widespread on smartphones and tablets over the next year, we will see that wave move rapidly through small and medium businesses.
Doing a bit of crystal ball gazing, here are five predictions about information and communication technology for managers Australian small businesses in 2012/13:
1. Unified Communications
Unified Communications means having all forms of digital communication – voice, video, documents, messages, whiteboards – enabled between various parties, whatever device they are using. Up until now, it’s been about users combining their phone with their desktop computer (and once you get used to clicking someone’s name in an email to call them, you quickly forget about pushing buttons on the phone!)
The really exciting next wave is the increasing adoption of smartphones that bring email, voice calls, SMS, cameras and the internet together – those using voice-to-text where mobile voicemail is also delivered as text in an SMS are already on this journey. What a great product it is when you need to quickly scan your incoming voicemail while in a meeting or even while talking on another customer call!
We’re going to see a dramatic rise in Unified Communications in small businesses because it’s becoming simpler and delivers a return on investment when customer calls are more reliably answered and productive time is maximised.
2. Faster networks mean mobility
Whilst each mobile network is different in different places, the fastest 3G networks (let alone 4G) are delivering download speeds once only thought possible on fixed networks). At the same time, the longer-term rollout of the NBN will see a step change for most businesses when working from their premises.
Speed is the game-changer driving SMBs to reassess how they use mobility in their working lives, because it enables more powerful visual presentations, marketing and collaboration – with customers or in a B2B context.
Time saved from getting things done faster frees a managers and staff to do more billable work, or simply have better work-life balance.
Faster broadband has made high-quality videoconferencing a reality but until recently, its cost meant it was the preserve of big business. Higher speeds and more powerful computers are making quality videoconferencing much more affordable for small business.
Some 45 percent of SMBs say they regularly have meetings with suppliers, clients and other key people, and almost nine-in-ten would rather do this face-to-face than by landline or email.
High definition videoconferencing will become very attractive for those SMBs that want to be more productive – especially with the cost of travel rising and the high opportunity cost of travel time – but for whom early, “cheap and cheerful” video is not sufficient for a quality customer interaction, or to share professional presentations.
4. Cloud computing
Cloud allows small businesses to enjoy the same cost and redundancy advantages as big businesses, by using computing applications and storing data on remote and secure servers. This can be on a pay-as-you-go subscription basis without large up-front licence fees or hardware costs. One recent economist’s report estimated that the total cost savings can be half or more compared to self-purchase of a server by small-medium businesses. Businesses going to the cloud may never need to buy another on-premise server.
Of the customers using Telstra’s online cloud software supermarket, T-Suite, a stunning 98 percent are SMBs. That customer base grew 110 percent in less than nine months so far this financial year and shows no signs of abating.
In the next year, cloud will make sense to even more SMBs and there will be a dramatic spike in its uptake.
5. A whole new way to sell
Many small businesses are already using the internet to increase productivity – our research shows greater than one-in-five of small businesses with a website are reaping an average of 41 percent of total turnover from their online channel.
What is rapidly becoming much better understood by small business is that online shopping isn’t just about people shopping from home on their PCs for goods than can be delivered by mail order. Smartphones are becoming a bargain shopper’s best friend in the USA, UK and Japan – and not just to let customers “fingers do the walking” (where Yellow Pages online is still more often used by people intending to buy, not just browse).
Free shopping apps make it easy to find nearby suppliers, and do product research just before the point of purchase – for example, photograph a product’s barcode, have it automatically uploaded to a database and see a range of comparative prices from other outlets within seconds.
We’ve already seen one major supermarket chain introduce its own barcode comparison app, and smartphone and internet comparison shopping will continue to throw down a challenge for SMBs working in retail. As many are now doing, they’ll need to promote their own differentiated service and/or product offerings online, using mobile-optimised web presences and demonstrating a strong understanding of search engine marketing.
And then there is social media – small businesses are increasingly using Twitter and Facebook to expand their reach in a very cost effective and targeted way to deliver on their promise of a differentiated experience.
We are in the midst of a quiet revolution in the tools available to small and medium business to increase productivity, expand their reach and generate new products and services. As in any business revolution, first mover advantage really matters, and the leading businesses of today, let alone tomorrow, are already well advanced.