Everyone can see that the business landscape is rapidly evolving.
With the emergence of new business innovations and new forms of competition, catalysed by advances in digitization, analytics, artificial intelligence, machine learning, internet of things or robotics — the capability to manage data as a corporate asset is now critical, allowing to yield the full potential of these new technologies to enable the competitive edge, that makes the difference in an increasingly competitive business environment.
Organizations have apprehended the importance of data in their businesses and are looking deeper into data to gain a competitive advantage, implementing machine learning and artificial intelligence to achieve new business objectives and to move ahead of competitors in the industry.
Small and Medium Enterprises (SME)
All of this is wonderful.
The truth is that when landing these technologies to SMEs, it’s an all new and complicated process, most organization will prefer to put these technologies aside without seeing the benefits they can gain from them.
I won’t be offering a solution here, for a reason or another, SMEs have somehow kept out of my radar, and I’ve only recently started reflecting on this and looking closer what can be the benefits and challenges for SMEs to become data-driven and on how this process can be conducted.
This said, every comment, input, about the questions I still didn’t ask myself and all the details I’ve overlooked are more than welcome. Thanks in advance.
First, to get a notion of the dimension of what we are talking about, and according to the World Bank:
“Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries. SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. They represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included. According to our estimates, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world. In emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs.”
These are quite impressive numbers, that show the potential benefits that the introduction of data-driven decision making, even if in a limited number of these organizations, can make in the lives of millions of people.
A few ideas on the table
- Be an early bird — SMEs typically don’t engage in this sort of data-driven mentality. So, SMEs who can use data within their business to operate in a way that they become far more adaptable and resilient, have huge opportunity to get ahead of competition.
- Find the lowest hanging fruit — The tendency is to do everything at once. But, with what resources? Identify the opportunities in the core business areas, operational, sales and marketing processes. The critical is to identify the business value that can be generated. It can be customer base growth, product repositioning, logistics optimization, etc. It’s important, especially at this scale to be extremely focused on what initiatives to start.
- Not all data is equal — Even for smaller organizations the volume of data grows rapidly, as the opportunities to expand insights by combining data. But it is the capability to see what is important that can make a difference to improve operations, customer experiences, and strategy. Almost every organization already has the data needed to face business problems, but simply don’t know how to use it to make key decisions. To overcome this there should be a more thorough look at data focusing specifically on the business problems and opportunities to address.
- Data strategy is there already — Within the business strategy. Within the business objectives to achieve, problems to tackle and opportunities to address, are the ones where data can have a determinant part.
- Outsource — Costs and know-how are the major obstacles are to start a data-driven transformation for SMEs. Skilful resources, infrastructure, tools, etc. are currently all available on the market. The only component that is not available is the know-how of our own business, and this is what is critical — everything else acts as support on the process.
- Focus on quick, strategic wins — Give priority to addressing specific problems with known consequences, defining initiatives that have a reasonable funding model, that are targeted, with focused effort, within short timeframes and that can deliver return also on a short timeframe — Apply an agile development mindset to all this process, start with a minimum viable solution and iterate, allow that visible results are presented in short time lapses.
Again, every comment and input, about these initial ideas and about what I might have overlooked are most welcome.