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Tech Spoils: How Small and Medium Businesses Are Pushing IT Sector Growth
Many economies around the world are facing declining growth and perhaps even recessions, so it may seem somewhat out of place that small and medium size businesses are expecting their spending on IT system integrators and managed service providers to increase by 12 percent, annually, until 2025.
Yet, most SMBs realise that by being technologically clever and up to date they can cut costs, optimise operations, stay competitive, and aptly manage customer expectations.
Satya Nadella, CEO of Microsoft, believes in this sentiment too, stating that there has never been a more urgent or clearer time for digital transformation, and that in an inflationary economy, digital technology can have a deflationary effect.
There are over 550,000 SMBs in New Zealand, and among these is a raft of start-ups and digitally cognizant businesses who are eager to invest in technology that accelerates growth, empowers talent, enhances digital security, and improves operational efficiencies. This provides a big opportunity for digital service providers.
SMBs in New Zealand are lucky to have access to an established range of industry-leading digital service providers and software companies, who will work alongside them to help them transform, expand, and achieve the best business outcomes.
Managed service providers have a particularly fruitful future with regard to SMBs. And the key to unlocking such fortune is not simply to understand where the opportunity may be, but to know how to develop to suit the ever-evolving needs of customers.
An estimated 40 percent of SMBs have changed their IT services in the past year because they were displeased with the service they were receiving. Focusing on this service is something service providers and resellers ought to keep in mind.
This shows that getting new customers is not enough, and to retain business service suppliers need to be acutely aware of their business priorities and be able to show that they are constantly adding value beyond the initial customer interaction.
How is this done?
It is important to understand what SMBs are really looking for from their technology partners. First, nearly 40 percent of SMBs say that they want assistance in understanding how tech investments and decisions will affect business.
The advantage will go to providers who can compare solutions and authoritatively speak on the differences between tech services, and moreover, to those providers who can analyse what this would look like on a business-wide level.
If IT companies want to seize this opportunity, they cannot just know tech, but they should really understand the customer’s business, and be willing to ask relevant questions to ascertain that information.
More businesses seem to be investing in specialists to help them understand these complexities. But the opportunity at hand is even bigger, as for years it has been clear that diversity, communication skills, and analysis are just as important as technical understanding and coding within the tech sector.
The demands of SMBs reflect this, as they increasingly want tech partners who understand their business, and who can explain the effects of their decisions in a comprehensible way.
It makes absolute sense then for IT companies to hire the sorts of people who have that skill and who see the world in the same way to their customers.
Proacting not Reacting is Key
Another quality that an estimated over 50 percent of SMBs are looking for is tech partners who are proactive in recommending new solutions. Meaning that SMBs want to know if there is a novel product or service that would help their business.
In the modern age of cybercrime, it is crucial that tech providers help SMBs to understand what risks they may be exposed to. Many SMBs have the mindset that cybercrime targets only large businesses with deep coffers, but that could not be further from reality.
In 2019 it was estimated that over 40 percent of SMBs had been targets of cybercrime. And as an increasing number of SMBs digitize, their exposure to cybercrime increases too. That is unless the correct protections are implemented, which is why one of the top four priorities for New Zealand SMBs is to fortify their digital security measures.
Many service providers have indicated that conversations with SMB customers have tended to focus on digital security measures. Smaller customers are even beating bigger competition to larger contracts across the tech service spectrum by improving their capabilities with value-added digital services.
Tech providers who prioritise security and the role of technology in constructing a fortified defence against cybercrime will be in a prime position to grow their business and offer real value to their customers.
Recent estimates suggest that two-thirds of SMBs have taken environmental, social, and governance goals (ESGs) into account, and are monitoring and assessing their progress. This is an encouraging statistic amidst the economic struggles and skill shortages that many SMBs are having to deal with.
Tech providers and resellers who assume a leadership role on setting ESG goals will quickly find that is aligns with the practice of many SMBs and is something that they are looking for in a tech partner.
The broad picture that recent findings on the attitude of SMBs paints is one of great opportunity for the technology sector. An opportunity that will only be seized if IT providers invest in the right capabilities, adopt a proactive stance, and take an educational approach to help SMBs comprehend the changes and understand the effect of their investment.
SMBs know that the correct investment in the most opportune place will place them in a stronger position during this ongoing period of economic uncertainty. Tech partners who share this outlook will similarly enjoy the same spoils.