By Greg Summey
“Whatever made you successful in the past won’t in the future.” – Lewis E. Platt
When he said those words, the late Lewis E. Platt, who was the CEO of Hewlett-Packard from 1992-1999, may not have realized just how suitable they were for small and mid-sized businesses. They should be the mantra of every SMB trying to get ahead in today’s market because they remind us that tomorrow isn’t a given. You must keep changing and innovating to reach and maintain success.
Nowhere is that more obvious than in SMB IT. And yet, some SMBs still doubt the value of IT investments. These businesses struggle with the old way of doing IT. Either the business owner or a particularly knowledgeable employee serves as the IT department, and the business stumbles along relying on a $200 an hour repair person to keep their servers and computers functioning as long as possible.
To put that into today’s terms, it’s an unsustainable model. Your business might last awhile, but it certainly won’t grow, or innovate, and remaining competitive is out of the question.
IT as a Strategy
Businesses that survive all realize one important fact about IT—it helps them increase profits. In fact, a Deloitte study found that SMBs that invest in IT saw a 45% growth over the prior 12 months. Technologies drive business, and SMBs who realize this are no longer just getting by. They’re investing in IT as a business strategy to move toward better targeted and more ambitious goals than the competition.
For example, SMBs who invest in customer relationship management tools understand that 86 percent of buyers will pay more for better customer experiences. It’s easier to justify a higher cost for your products and services if your customers feel they are important, understood, and prioritized.
Another great example of how SMBs are leveraging technology as a strategy is in the current growth of mobile proximity payment capabilities. Apps like Google Wallet, Samsung Pay, and Apple Pay are all the rage, but they require IT capabilities. SMBs that invested in the technologies to support these payment methods are on the front end of a growing trend that Javelin Strategy estimates will increase to more than $92 billion by 2019.
Improving Business Processes and Capabilities
While customer-facing technologies are the ones that get most of the attention, the importance of IT in the back-office shouldn’t be ignored. More and more SMBs are leveraging IT capabilities such as cloud services for email hosting, website hosting, backup and recovery, and even productivity apps like Microsoft Office 365. These are capabilities that can create efficiencies and automate the drudgery of doing business. SMBs use the time freed by IT resources in more productive, innovative activities that drive the business forward.
Barely there IT won’t support strategic capabilities. Neither will older equipment and applications. SMBs that are serious about growth understand the importance of investing in the tools needed to feed that growth, and they find ways to work that investment into their budgets. The alternative, falling behind IT savvy competition, simply isn’t an alternative.