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Smart SMEs put people, digital, and data first
Don’t succumb to the 300,000 business a year churn says Deloitte report
9 October 2014: A new report from Deloitte Access Economics, commissioned by salesforce.com, confirms that talented staff members are the differentiators in small to medium sized enterprises (SMEs) as they manage the increasing intensity of digital. The smartest SMEs are also using analytics to get a deeper understanding of their customers as they grow their online delivery services, and shift from website only innovations to mobile engagement and delivery.
The Australian survey of 500 businesses with 16-100 employees - amplified by qualitative research - examines the changing competitive and digital landscape for SMEs over the medium term. It also highlights the adoption and increasing maturity of the cloud used by the smartest SMEs alongside social and mobile to better connect with their customers in real time, anytime.
The competitive landscape gets tougher
Deloitte Access Economics paints a picture of a fast growing, challenging competitive environment of online-only businesses with lower overheads and broader market reach as 300,000 new businesses come online each year and 300,000 cease to operate . “Given that half of the customers in this SME sector are SMEs themselves, it’s a constantly evolving, volatile and increasingly demanding customer base,” said lead researcher, Deloitte Access Economics’ Director John O’Mahony.
“Businesses have most commonly identified the quality of their goods as their major differentiator – almost 21% identified this as most important to the success of their organisation. However we know from our research into innovation and growth, that just competing on quality and service (the second most important factor at 13.7%) won’t sustain a business in the medium to long term,” O’Mahony said.
Navigating to the Future: 2014 Deloitte Access Economics Pty Ltd
People are the differentiators
Jeff Downs, CEO of Redback Conferencing, one of the four case studies in the SME research, points out that people are the differentiators: “You need to take a leap of faith at some point. Stop working IN the business and start working ON it. It’s about empowering and trusting your employees.
“And the best way to empower employees we have found is through the use of smart connected technologies – like mobile and the cloud. In this way we can grow capacity, stop churn and save costs.”
Deloitte research shows that each year some 11 per cent of employees change their employer, and for more than one in five, it is because of unsatisfactory working conditions - conditions that can be ameliorated by a digitally connected workplace.
Deloitte Private Partner, Joshua Tanchel, confirmed the new Deloitte Access Economics’ research points to the need to recruit the right talent as the number one differentiator for SMEs – almost twice as important as improving the supply chain, diversifying revenue, or acquiring another business.
He said: “Businesses believe future growth is more likely to come from recruiting the right talent (37%) as well as increasing productivity (35.5%), the second most important factor for growth.”
He added: “A key incentive to prevent churn and retain employees, is being able to act on the fact that employees are motivated by more than just perks and pay. The most engaged employees are those that access good analytics, work in a digitised business and can access collaborative technology.”
Navigating to the Future: 2014 Deloitte Access Economics Pty Ltd
Digital with data changes the game
Given the challenging and constantly evolving environment that SMEs operate in, the ability to capture, analyse and derive insights from data is becoming a critical factor for successful SMEs.
Deeps De Silva, Senior Manager Product Marketing, salesforce.com said: “Understanding what is important to customers is going to change the way businesses connect with their customers. Managing that relationship with social, mobile and cloud technology delivers the smarts not just to understand the customer, but the ability to act on that understanding."
Tanchel agreed, adding that SMEs have been increasingly drawn to cloud platforms over the past two years, whether to manage their own business, its clients or to generate new leads. He said: “Cloud platforms are a cost-effective way for businesses to get the best technology available and compete with established players.”
O’Mahony concluded that the Deloitte Access Economics’ survey paints a picture of an increasingly sophisticated, savvy SME sector with its eye on business profits, and an understanding that any gap in experience and skills can be either outsourced or insourced to ensure the best possible advice and planning. He said: “Businesses have realised they have to move fast and be agile to stay profitable.”
Last Updated: Monday, 13 October 2014
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