To say that small-to-medium sized enterprises (SMEs) represent the heart and soul of the U.S. market is an understatement. More than 90 percent of all U.S. businesses – or approximately 28 million – fall into the SME category.
While no two SMEs are the same, many share similar challenges, including the adoption and cost of new software and other technologies needed to help manage their businesses. This Q&A with Kradle CEO, Michael Haddon, discusses some of the tech challenges that SMEs face, as well as trends and solutions within the market.
- Q. What trends are you seeing in the U.S. SME market?
A. Based on research we conducted in the U.S. in March 2018 (300 SMEs), there has been a major shift from cost reduction towards revenue generation. While it might not seem overly significant as all businesses want to spend less and make more profit, it does signify an increased confidence in the market as businesses are once again keen to invest rather than reduce cost as was the case in 2017.
- Q. How do you see the role of technology changing for SMEs?
A. We are seeing a distinct increase in awareness of the importance and challenge of keeping up with new technology. Over 63 percent of businesses in the survey believe that although management software is critical for their survival, they are struggling to find the right solution and often settle for disparate tools which don’t allow them to innovate and adapt to new demands. I believe that we are fast reaching a tipping point when businesses will no longer be able to get by using tools which restrict their growth and will need to invest more time researching and adopting new systems to keep up with competitors. It is a race that will be won by those who take action first.
- Q. Why do you think so many of those SMEs want technology to manage their business?
A. The main reason (by a significant margin) is to achieve greater operational efficiency. Businesses are hesitant to adopt new systems. Although they are trying to keep up with technology, they are concerned about the total cost of ownership and product support. Too often, businesses are faced with high license and implementation costs. Once the investment is made, support is unsatisfactory and they are forced to seek help from consultants/specialists at a cost the business cannot afford.
- Q. How do you see business management solutions evolving over the next few years?
A. Unlike larger organizations, SMEs struggle to keep up with technology as they are more price conscious. The decision to invest in new technology is a risky proposition and if they get it wrong, the decision could be the death knell for their business. The technology market is saturated with limited solutions for SMEs. SMEs cannot afford large fully integrated solutions and must select providers of individual components and work out how best to integrate each solution into their business. The alternative is to adopt a high-risk strategy and invest heavily into a complex system that locks the business in and from which there is no escape. This is where we will start to see the biggest evolution – flexible solutions which give control back to the business owner at little or no risk and is one that we are tackling specifically at Kradle.
- Q. How can SMEs benefit from the new generation of business management software?
A. In a nutshell, it comes down to improved productivity. If a business can maximize their existing resources, they will benefit from improved revenue and profitability. Visibility is a key component of survival and success. When management can track and measure performance, gaps can be identified and opportunities will arise. Making the right decisions based on accurate data and controls will positively impact the success of their business as they once more take charge of their destiny.
About the Author
Michael Haddon is the CEO of Kradle, which recently launched its flagship software – a fully customizable, self-managed solution for small and medium-sized businesses that allows them to manage their own operations. For more information, visit www.kradle.com.
