Metamorphosis can bring all kinds of possibilities. Case in point: the transformation of a caterpillar to a butterfly. In the early stages the caterpillar invests the majority of its time and effort into feeding and growing. Once it transforms to a butterfly the activity shifts to reproduction and sustaining the species. In our last Equipped to Compete blog, we looked at how a fast-growing business can transform to scale its operations to support an ambitious growth strategy. This time we look at one of its distinct advantages over larger competitors: technology as an enabler of sustainable growth.
According to a recent research report , “Scaling SMEs: Building a flexible platform for growth” by the Economist Intelligence Unit larger companies are often hampered by outdated business processes and systems that have grown to the point of slowing them down, but SMEs can invest in accessible, flexible IT platforms that grow with the business. As David Howden, founder and CEO of Hyperion Insurance Group in the UK points out in the study “Some large companies are lumbered with old systems that are slowing them down, rather than speeding them up. One of our competitive advantages was that we built the business from scratch and therefore we weren’t saddled with legacy systems.”
This often starts with cloud computing. The days of tying up huge amounts of capital in server farms are over. Your people can access immense computing power in the cloud from smartphones. Information is accessible to everyone who needs it and costs are coming down every day.
Smaller companies are also wise to rely on general purpose technologies, rather than specialized or custom-built software and hardware. The more customized the technology, the more likely it is to suffer from delays and limitations. Taking the general purpose route makes it much easier to scale.
This ‘software as a service’ model also means that sophisticated management information is more within reach of smaller companies than ever before. Larger companies no longer have a monopoly on insight derived from high volumes of data. Now SMEs can access business applications such as Enterprise Resource Planning (ERP) systems, customer relationship management (CRM) systems and analytics on their tablets and smartphones.