How we use core technologies to give our SMEs superpowers
This is a guest blogpost by Chris Richards, Regional President UK&I, Unit4
It was pleasing to see the Chancellor reference the importance of encouraging SMEs to embrace key back office technologies such as ERP and CRM, as it is rare such a senior minister would reference what are (let’s face it) far less “trendy” technologies compared to artificial intelligence (AI), the Internet of Things or Quantum Computing. However, I would argue (and not just because I work in the sector), that helping our SMEs to adopt such core technologies is going to be vitally important if we are to fulfil the vision of ‘Global Britain’ and lofty aims such as making the UK a “Science Super Power.”
There is a clear corelation between technology investment and the competitiveness and productivity of businesses and countries. It is why the government’s Innovation Strategy has underlined the need to boost R&D investment to the same level as average spend across OECD countries and increase public investment in R&D to £22bn per year. There is a lot in the strategy announced in July 2021 to achieve the Vision 2035, but as I have said before, we need to place greater emphasis on our small to midsize businesses if we are to really turn around the UK’s productivity and innovation short comings. We should view our SMEs as the engine of our economy in the same way that Germany talks about its Mittelstand. We need to invest in our SMEs to give them “Superpowers” of their own.
Core technologies and the productivity problem
Why we need to look at core technologies is because the big challenge, as explained by Dr Mario Gruber during London Tech Week is productivity, particularly among SMEs. When I submitted evidence to the Public Accounts Committee earlier this year, I suggested that we had a once in a lifetime opportunity to address this issue with technology and create a clean slate for SMEs. To be successful, though, we must find ways to increase their understanding of these core technologies and how they can help their businesses. It is equally importantly to help SMEs develop both the technical and leadership skills to embrace the change that will come with such technology-led transformation.
The difficulty for SMEs has always been constrained resources when it comes to adopting the latest core technologies and developing the skills to use them. Without the expertise and experience to understand the impact of these core technologies on their businesses and the leadership skills to steer their organisations through what can be significant disruption, small businesses will struggle to maximise the benefits. It requires robust planning to calculate and justify the cost of change accompanying such investments. Often it is seen as a significant cost without fully understanding how automation and the simplification of processes can drive productivity – all part of the return-on-investment (ROI), both tangible and intangible.
It is positive that the Government is aware of these needs and has set up the Help to Grow programme, particularly the Help to Grow Management programme. It looks to address some of the key difficulties in evaluating new digital technologies and how business leaders can take employees on a journey with them to maximise their impact. It will be critical that the programme provides SMEs with the tools to assist and guide them when making such investments.
Additionally, SMEs need to understand how next generation core technologies will enable far greater agility and competitive advantage. With such constrained resources, being agile is even harder, but SMEs must build the processes and expertise that will help them to adjust their business models in line with the pace of technology change. It will support vastly different user experiences and dramatically change how companies interact with customers. The SMEs that can adopt technologies at speed to react to opportunities will have the potential for significant competitive advantage.
What the future could look like
Many industry analysts are talking about a modular future for core enterprise technologies. Forrester talks of digital operations platforms, which underpin organisations and give them the agile foundations to respond to market change. This will be enabled by lowcode/nocode tools, automated by AI and enhanced by predictive analytics. For many SMEs such language, never mind the underlying technology, is foreign.
Where I have found more success in explaining the value of such technologies to SMEs is illustrating the impact they will have on business models. For example, AI will automate standard processes such as booking holiday or auto-filling an invoice. From a productivity perspective it will take away basic, mundane tasks creating opportunities to redirect resources – Accenture has estimated that as much as 51% of an average employee’s time could be enhanced with smart technologies.
Understanding the impact of core technologies will have for SMEs can be summarised in three key questions:
- How do you evaluate these technologies to ensure you are only adopting those that benefit your business?
- If you implement these technologies how will you use the saved time and resources to drive productivity elsewhere?
- As you plan your transformation programme underpinned by these core technologies have you taken the time to envision how this will alter your business in the future?
However, based on the business learnings from the pandemic every SME should be asking itself the most fundamental of questions: what do you want your business to look like in the future? And how do you think your customers will want to interact with you in the future?
We have a unique moment in time for a clean slate for UK SMEs and together we must help to ensure we maximise its positive impact. I agree with the Chancellor, we do need to look at how we encourage SMEs to adopt core technologies. I’m not just saying that because of the company I work for, but because having worked in this sector for so long and understanding the competitive challenges our clients face, it is absolutely critical if we are to overcome the productivity lag in this country. Success depends on consistency in terms of support and encouragement from Government and the technology industry. Everyone must understand that investing in our SMEs is critical to all our futures and only if we can foster their ‘Superpowers’ will we get closer to achieving the visions for the UK.