Despite impending recession, the UK’s small and medium-sized enterprise (SME) sector is showing no signs of cutting back on communications technology and services, understanding that such investments will be key in improving business resilience, according to research from Beyond Now.
The orchestration and digital platform provider’s report CSPs: it’s time to reacquaint yourselves with today’s SMBs, was concluded in August 2022 by independent research consultancy Coleman Parkes. It found that as many as 85% of SMEs recognise the importance of technology to the success of their businesses, with 51% ranking tech as very to crucially important.
However, it also showed that SMEs need help from communications service providers (CSPs) to realise those improvements, with just over two-thirds (68%) of SMEs wanting a single platform for technology systems.
The research found that SMEs are more sophisticated adopters of technology than many give them credit for. They are digitally minded and their business priorities are closely aligned with what technology can help them achieve. In the next 12 months, 70% of SMEs believe that technology can help them achieve efficiency improvements and further digitise their businesses, with some also exploring business growth, customer experience improvements, and easing issues caused by a lack of time and human resources.
Although SMEs are cost-conscious, they were found to currently invest 8% of their annual revenues in technology products and services. And despite economic uncertainty, those investments will increase.
Beyond Now found that over the next year, half of SMEs will increase their technology spend by an average of 6%; in the next two years, 59% will increase investments by an average of 7.5%; and in five years, 64% expect to boost technology investment by an average of 9%.
Notably, the study showed that SMEs recognise the business impact of a range of bleeding-edge technologies. It is expected that they would see IT security and cloud technology as delivering significant value. But what is surprising is that SMEs recognise the potential value in more nascent technologies, including blockchain (72%), artificial intelligence/machine learning (71%), edge computing (70%) and even robotics (56%).
Also, they are already thinking about 5G use cases, with 73% perceiving value from the technology and expecting CSPs to help them realise the potential of 5G beyond standard connectivity offerings.
However, the study also showed SMEs reporting administrative headaches over having to manage multiple technology providers to meet their needs. Some 62% said there were gaps in off-the-shelf technology products to help them meet their business priorities and 64% wanted technology providers to work together to build joint solutions to help them achieve their goals.
Just under two-thirds (65%) of SMEs said they would prefer to buy all their ICT from one source, and would pay a premium for this. One-third would be willing to pay between 1% and 5% more, and 45% were willing to pay between 5% and 10% more.
The research findings were accompanied by a playbook outlining how CSPs could develop successful SME lines of business. Beyond Now noted that SMEs, regardless of industry and sector, have common pain points that they need technology to address and CSPs cannot ignore.
“It’s fascinating that at a time when the industry is so focused on enabling digital transformation for large enterprises, that many SMEs are already digitally transformed businesses,” said Beyond Now CEO Angus Ward. “Against the backdrop of an economic downturn, SMEs want to achieve business resilience through technology, and CSPs should be the ones to step up and help them.
“But SMEs are in a hurry and, traditionally, CSPs have not done enough to get to know their SME customers. That means building solutions around SME needs, finding repeatable patterns and embracing digital channels that are key for developing viable business models. This involves creating a digital marketplace that can deliver the scale and automation necessary to meet the diverse requirements of the SME sector.”
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