Who should SMEs turn to for digital help?

Camille Mendler, practice leader, Ovum

Almost half of Asia’s smaller businesses are digitally illiterate – unable to keep up with the lightning pace of technological change or not using digital approaches to doing business, according to Ovum research. This is an urgent problem to solve because small and medium sized enterprises (SMEs) are Asia’s biggest employers and creators of jobs.

But who should SMEs turn to for help? Ovum believes that SMEs are a huge opportunity for digital service providers (DSPs) willing to listen to SMEs’ needs and take them by the hand.

The SME universe is vast: there are almost 3 billion SMEs (including micro, small and medium enterprises) in 15 key Asia markets (Australia, China, Hong Kong, India, Indonesia, Japan, Myanmar, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam). Together, they contribute between 35% and 60% of national GDP and play a pivotal role in driving a country’s economic health.

From a technology investment perspective, a recent Ovum survey found that 50% of Asia’s SMEs want to spend more on mobile services and 46% want to spend more on cloud computing.  The Internet of Things is also on the investment agenda: more than half of the Asian SMEs surveyed are considering asset tracking.

With changing workforce demographics across Asia, more tech-savvy millennials or digital disruptors are entering the workforce, but they are still a minority in a small business universe dominated by established, family-owned firms. Yet attitudes to technology are very positive: nine out of 10 SMEs – irrespective of age – believe that ICT investment could make their business more competitive if they knew how to apply it.

What many digital service providers have overlooked is the fact that SMEs need digital transformation as much as large multinationals. The reality is that many DSPs have lavished 70% of their B2B resources and attention on less than 1% of the enterprise universe demographically. It could cost them dearly, as SMEs start spending more on technology – and give their business to those they trust most.

Today, SMEs’ most trusted advisors are those within local reach: their colleagues very often, but also nearby organizations that can provide advice – IT advisors, smaller integrators and technology resellers. Telecom operators are in the mix, but are often viewed as unwilling to educate or advise. Others might include accountants, digital agencies, co-working providers and trade associations.

SME trust is fragmented, but what they crave from their suppliers is more customer intimacy. That does demand getting to know them better. DSPs do their homework correctly: they must investigate the needs of their SMEs targets not just by size or turnover, but by what they do, by location, by business contexts, by ownership, and by qualities such as whether they are new businesses, or well established. What’s certain is that one size does not fit all: the small business universe is huge and diverse, and DSPs must decide quickly which personas to target.