SMEs that embrace digital tech grow faster than those that don’t – research

Research shows correlation between digital transformation and faster growth among small and midsized enterprises

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‘The overwhelming message from this report is that digital transformation has a big impact on small businesses around the world’


Small and midsized enterprises that have embraced digital technology show faster growth than companies that have not, according to new research.

In a global study of 3,210 SMEs, conducted by analyst firm IDC for IT company SAP, 39% of respondents said active participation in the digital economy will be essential to their company’s survival in the next three to five years.

SMEs in the study that had grown revenue by 10% in the previous year – one third of all respondents and 45% of those with between 500 and 999 employees – said they are “well underway” in applying technology to connect people, devices and businesses.

At least half of SMEs across all regions surveyed said they use collaborative software as a result of their digital transformation, making it the most used technology in the survey.

CRM and business analytics software were the next most used by SMEs, with at least 38% and 37% of respondents in every region using the respective technologies.

Between 53% and 60% percent of SMEs surveyed said new technology solutions have allowed them to begin or continue revising their workflow and processes to streamline operations and improve productivity.

>See also: Digital transformation in 2016: how far have we come, and how far have we left to go?

The results of the study indicate that SMEs around the world understand and benefit from the value of analytics, collaborative and customer relationship management (CRM) software to help them run simpler and compete with larger enterprises. 

The research also revealed that SMEs are conscious of certain risks and challenges associated with digital transformation, many of which were most prevalent among respondents in North America, Asia Pacific and EMEA. A quarter of respondents in North America, for example, said they have “done little to no work” regarding their digital transformation.

Meanwhile, around a third of SMEs surveyed agreed that personal relationships among company employees have not been strengthened by their adoption of technology, with larger companies agreeing more.

Between 35% and 45% percent of the SMEs surveyed were “concerned” that they will rely too much on data to make effective business decisions. This concern was more prevalent among larger SMEs.

“The overwhelming message from this report is that digital transformation has a big impact on small businesses around the world,” said Rodolpho Cardenuto, president of global channels and general business at SAP. “It is proven that companies using these technologies run simpler and grow faster.

“It is also clear that personal connections and business instincts continue to play an important role in making the right decision. SMEs should think about navigating a digital transformation journey that lets them combine the best of both worlds.”