With all the business challenges faced by small and medium sized enterprises – unstable economic conditions, a constantly changing competitive landscape, the proliferation of technology – to name a few – it’s no wonder that they often question whether they even want to grow into a larger organisation with all the trappings of growth that would accompany it. But in our experience, small doesn’t always mean the most efficient either.
When SMEs remain small they do have certain advantages:
- More flexibility in the way they work
- Fewer people (or no one) to answer to and justify decisions made
- A closer company culture that is able to remain true to its traditional values
- A better understanding of and closeness to their market
- Fewer concerns about competing with larger organisations
However, these advantages are also countered by the limitations often faced, including:
- Lack of strategic decision making; often within family businesses the same methods have been followed for years without reviewing their effectiveness
- Multiple, disparate systems and processes used across all business functions; usually resulting in repetitive and inefficient activities
- Less business support in areas such as marketing, branding, IT, finance to help shape future objectives; reactive rather than proactive approach
- Little or no investment in the development of professional skills of employees
- Risk averse approach can result in lost opportunities; with no clear business insights, it’s difficult to make confident decisions
- No defined management approach can result in fractured operational processes
Where’s the balance for SMEs?
A possible way for smaller businesses to approach this challenge is to take the best of both worlds – act big while still being small. By improving efficiency whilst still growing, businesses can better position themselves when the growth opportunities come along, in the knowledge that they are ready for the next stage. It also helps to make them look more attractive to outside investors or merging companies if the basics are already running like a well-oiled machine.
What would this look like?
Depending on the management structure, the industry and future growth plans, areas where your organisation could ‘act big’ include:
- IT – have the right support person/team on board now who can identify inefficient processes, systems and hardware and work on a simple plan to increase efficiency, productivity and value for money. This might result in decommissioning old and ineffective systems, streamlining duplications and using cloud technology.
- Marketing – with today’s multitude of free and low cost apps, you can experiment cheaply and easily with emerging social media tools that can help you to reach more of your target audience with little time and financial investment.
- Finance – bringing together your organisation’s financial data is possibly one of the biggest ways to be even more successful while remaining small. Collating your reports and having better insights into your cash flow could help you make the right decision faster whilst trying to remain agile.
- Human Resources – even if you don’t have a full HR team yet, your employees could still leverage the numerous SME grants and initiatives available for skills development. Check out SPRING Singapore for more information.
Where can the right technology fit in?
Possibly the biggest advantage your smaller company has over a larger organisation is the depth of knowledge and commitment from the owners or senior managers – this should never be underestimated because it’s what made the company what it is today.
By complementing this with small business-specific technology, like SAP Business One and SAP Version for HANA, small business can really leverage the best of both worlds.
Despite the commonly held perception that ‘my business is too small for SAP’, more and more SMEs are realising that they can prepare themselves for growth without needing to worry about catching up when the time comes, or even worse, missing out on a lucrative opportunity.
SAP Business One and SAP Version for HANA can help SMEs become more efficient, while still growing, by:
- Implementing a robust decision making framework, based on real time facts and figures
- Identifying opportunities for growth by using pervasive analytics
- Reducing or eliminating manual and repetitive processes across finance, operations, and in the warehouse
- Providing instant cash flow and other reporting capabilities to better manage risks and opportunities
- Creating a sought-after internal culture to attract and retain the talent needed to grow the business
As an SME you will also have access to financial support to make this important investment as well as extensive user training and help as and when needed.
Note: This story has also been adapted for publication in Steemit.