Small-medium enterprises are the backbone of any economy. Starting off with the most important aspect, the statistics about the small-medium enterprise, today, SMEs account for the majority of the businesses worldwide. They are the most important contributors to job creation and global economic development. Talking about their financial standing in the economy, SMEs represent about 90% of businesses and more than 50% of employment worldwide.
Taking this into account, it is essential to understand that SMEs must embrace emerging technologies. Day to day, year to year, technology is advancing; there are multiple ways to solve the usual traditional problems. Ways that are efficient, problem-solving techniques that require relatively lesser time and flows that reduce human dependency – but in the end, it all comes to businesses having to adopt them.
This article focuses on why small-medium enterprises should embrace emerging technologies and gives a detailed understanding of them. The article is structured and focuses on each aspect of emerging technologies at a grass-root level.
Before we try to understand the relationship of SMEs with emerging technologies, it is essential to look at what emerging technologies really mean? What they are and how they are helping the day-to-day activities step up the ladder.
Emerging Technology basically is a term that refers to new technology or a continuing development in the existing technology. This term gives a glimpse of the developing technologies to become more efficient or introduce a new segment into society. While we understand that these have played a vital role in generating new opportunities and giving rise to new features, they have created more problems too.
Understanding this through examples, consider the development of new digital communication technologies such as Whatsapp and Facebook and media channels. Where these have made communication and information availability easy, they have given rise to new legal challenges that include issues related to copyrights, trademarks, patents, royalties, and licensing. Secondly, machine automation is a significant example of emerging technology. It has made different processes smooth and has increased time efficiency, but it has majorly cut up the job market. This reflects lower jobs for unskilled labor, which has increased poverty issues.
Today, we all understand that emerging technologies are essential for every business out there, be it established businesses or small-medium enterprises. But apart from their usual benefits, no one understands why SMEs need to take this step; let us focus on the grass-root level.
Emerging Technologies today make you make or break the deal; they level up your business game and let you do more of what you do at a reduced cost. Technology at the start may be an expenditure for your business but think of it in the long term, how you can make this expenditure an investment.
Markets today are becoming more competitive than ever; what your business offers may be offered by hundreds of other companies operating in the same market. Here comes the point, how can you differentiate from the offering? What is your unique selling point? Before you think about these aspects, you must ensure that your business is in the same standing as the other businesses in the market. Today, adopting emerging technologies is the bare minimum for SMEs. Small and medium-sized enterprises are readily adopting technologies today to transform and stay relevant in the market.
To stay up to date with market trends, SMEs are continuously looking for ways that can stop them from lagging behind. They are attempting to maximize profits without compromising on quality, cost, and efficiency.
Here are some points on why we think that Small and Medium enterprises should adopt emerging technologies:
a.) Reducing Operating Costs
One of the significant expenses of any SME is their cost to function, the cost to carry out its day-to-day operations, which is known as the operating costs. Consider an SME working on designing and selling daily wear outfits. In this example, the business has appointed a manager that is responsible for reaching out to customers and maintaining a log of orders manually. The operating cost in this scenario is the salary of the manager and the paper expense – not to mention the extra time that is required to get the job done.
This SME must embrace emerging technology such as an online presence such as a website with an automated backlog to keep track of orders. This way, the brand will reach out to more customers having higher brand recognition, and it will automatically maintain a log of orders on the website. This may be an expenditure for the business at the start. Still, it will significantly reduce the monthly operating cost of paying the manager and will cut up on the excess paper waste as well as expenses. This is how emerging technologies reduce operational costs for small businesses!
b.) Take Forecasted Decisions
Modern-day technologies such as the use of big data and ML can help businesses have insights into ongoing consumer interests. This allows SMEs to structure their offerings in a way that benefits the customers and, in turn, increases their revenues. That’s precisely what businesses aim for!
Consider an example of a small grocery store that uses big data. This particular store keeps a record of every incoming customer and their purchasing habits. They know how many customers from each income class come to shop there and what their interest is – this helps them design deals that increase sales and attracts more footfalls. This includes sales near celebration days such as Easter, Christmas, and Eid or sending out promotional messages to a particular consumer segment.
c.) Contributing to Business Development
Integrating emerging technologies into small and medium enterprises is one of the most significant growth drivers for business revenue. This helps entrepreneurs be more focused on working on bringing new advancements rather than looking toward redundant business flows.
New technology tools help SMEs reach a broader target market and explore new horizons for the existing business. For example, integration of bookkeeping in business helps one-person show, the entrepreneur, to look upon new business opportunities rather than keep working on maintaining accounts.
Some of the emerging technologies that have changed the business dynamics of today and made small and medium enterprises efficient include:
i.) Cloud Computing
Cloud Computing is the delivery of different computing services that include servers, storage databases, networking, software, and analytics. Cloud computing helps store and process data in a location that is online and separate from the end-users. AWS’ cloud products and services have been rated as the best by SMEs.
ii.) Automation and Resource Planning
Automation and resource planning is a strategic approach that ensures resources are being utilized in the right way. This may be a single portfolio of work or a single project which provides a smooth flow. When executed properly, resource planning helps in achieving maximum efficiency and optimization without under or over-utilizing any one resource.
iii.) Internet of Things
The Internet of things refers to a rapidly growing network of connected objects that can collect and exchange data in real-time using embedded sensors. These include thermostats, cars, lights, and many more appliances that can all be connected to the IoT.
iv.) Artificial Intelligence
Artificial Intelligence is the simulation of human intelligence processes by machines, particularly computer systems. Artificial Intelligence optimizes the customer experience by providing personalized recommendations to people based on their searches and purchases or cookies.
v.) Big Data and Business Analytics
Big Data Analytics is a complex process of examining big data to uncover information. This includes hidden patterns, correlations, market trends, and customer preferences which help organizations make informed business decisions.
vi.) Mobile and Payments
The world has progressed, and now you can make mobile payments sitting at home without having to go somewhere. This includes making money payment made for a product or service through a portable electronic device which includes tablets or cell phones. Applications include PayPal and Venmo etc.
I.) Intelligent Data-driven decision making
Big data helps businesses in making informed decisions that enable SMEs to boost revenue and make profits. It helps design packages that attract customers and increase footfall. This information helps in making data-driven decisions making using facts, metrics, and data to guide strategic business decisions.
II.) Increase in Productivity
Emerging Technologies help businesses increase productivity levels as there is more time for entrepreneurs to invest in different business dynamics. Reduced work redundancy means more business ideas and exploring opportunities.
III.) Better Customer Experience
Emerging technologies help understand customers and their demographics which helps in a better customer experience. Customer feedback helps develop an in-depth understanding of customers. Enabling technologies and implementing a system is the key way to collect feedback, analyze it, and act on it regularly. Emerging technologies help to bring personalization of customer experience to SMEs which were earlier the forte of big players only.
IV.) Increase in Margins and Profits
Emerging technologies help businesses increase productivity levels, reduce marketing costs, help in time tracking and hence reduce overall costs. This helps increase margins and profits, which are critical drivers for the business to excel.
V.) Compete Globally
A good organization with an excellent system enables emerging technologies to help businesses in competing globally and release their product offerings at an international level. Technology allows increasing a company’s ability to coordinate its activities regionally and nationally and create a competitive advantage.
To say it in a nutshell, emerging technologies have leveled up the game for small and medium enterprises as they are the economy pioneers today. It comes with its own set of advantages and disadvantages. Still, emerging technologies are essential for SMEs to ensure that they compete globally, increasing job opportunities – the need for the hour!