Davids of business add tech to slings, turn tables on Goliaths

Conventional wisdom has it that small and medium enterprises do not have the financial resources, nor the technical skills, to embrace new technology at the same pace as large corporations.

For at least the first decade of World Wide Worx's SME Survey, from 2003 to 2013, South Africa's largest representative sample of small business use of technology revealed resistance by business decision-makers. Unless the technology was tried and tested - usually by large businesses - there was no appetite for the risk or cost of being at the cutting edge.

"If it's a no-brainer and saves us money, we'll use it" was the mantra of small business.

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At the same time, in large enterprises, entire information technology departments were given the task of taking companies into the future - and increasing the gap between big and small.

But the tables are turning. Back in 2015, the survey showed that SMEs had embraced cloud computing, even when they didn't realise they were doing it. Among SMEs, e-mail, back-ups and accounting are moving rapidly to the cloud, while the corporate world remains wary.

Only intensive education from organisations such as VMware, Microsoft and Amazon Web Services persuades the enterprise behemoths to embrace the obvious benefits of accessing any data and applications from anywhere and on any device.

Meanwhile, small businesses are beginning to race ahead. The turning of the tables was neatly summed up by Gary Turner, co-founder of the New Zealand-based accounting software company Xero, one of the world's fastest-growing financial technology companies.

"SMEs are adopting modern technology more quickly than larger business, because large businesses have an inertia that small business don't," he told Business Times during a recent visit to South Africa.

"The corporation may have a chief technology officer, but migration to the cloud is a massive problem for these executives. The small business simply does it."

Twenty years ago, he said, it had been far more challenging to run a small business effectively. Thanks to technology, that challenge has moved up the ladder to mid-sized businesses.

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"Beyond 100 people, in the middle ground between small and large business, they don't have the financial power of a large corporation, but now have the complexity of a large entity. This mid-section of the economy has to wrestle with the same complexity, but doesn't have the equivalent assets to do so. Their scale becomes more of a liability.

"It is now more about throwing technology at the challenge than throwing people at it. Small businesses have more agility in that regard."

There is a deeper significance to this trend. Turner believes that micro enterprises - businesses with fewer than 10 employees - will be next to embrace business technologies such as cloud computing and process automation. These tiny drivers of the economy are about to become aggressive players in the competitive landscape.

"If you look at the emerging uptake of technology by micro businesses, and extrapolate that 10 years, it changes the landscape of the economy. It is the first time many micro businesses are using technology, and it means they are going from grossly inefficient to super-efficient."

Soon, large organisations will be taking their lessons from the tiniest of businesses.

Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter @art2gee and on YouTube. He gave a talk on emerging technologies at CES 2017