Investing in cutting-edge technology is expensive, but it can pay off for SMBs.
Technological advancements have given small businesses (SMBs) the ability to compete on a larger scale than ever before. However, as technology advances at a rapid pace, many small companies struggle with knowing what specific types of technology they should invest in and ensuring that what they invest in adds value to their business.
As executive director of the International Council for Small Business (ICSB)and a professor of management at George Washington University's School of Business, Ayman El Tarabishy has helped businesses around the world answer some of those questions.
We recently spoke with El Tarabishy about the benefits of adopting cutting-edge technology for small businesses.
Q. If your current technology is still fitting your needs, what are the benefits of adopting new technology?
A. Technology is a tool that provides more efficiency and productivity within a business, large and small. The nature of technological change is a response to what is taking place in the marketplace, the vendors that supply the technology and increases in power/cost itself.
Many business owners may seek to gain an advantage in the marketplace by using the latest technology solutions available. This not only saves costs but may be more secure (cybersecurity), provide improved seamless integration and allow for remote access.
For example, many of us are pleased with our automobile but each year, new models provide more comfort, ease of use, improved safety and increased reliability. The previous year models did a great job of getting from point A to point B but the newer models have added improvements. Likewise with upgrading technological solutions for your business. Improvements and innovations are always taking place.
Q. Investing in new technology can be expensive for SMBs. What should they be doing to ensure they are putting their money in the right places?
A. The decision to stay up with improving technology can be a difficult one for small businesses. With so many "bells and whistles," the question becomes what is a must-have and what is a nice-to-have.
Some businesses will enter into agreements with vendors and suppliers of technology that allow them to lease technology rather than buy. This enables a small business to list the cost of technology as an expense and not a capital good.
The focus, I believe, is to make sure that your technology is secure (cybersecurity), efficiently used (no access our unused features) and will connect with your customer base. The use of technology is another way to provide solutions to your customer in a convenient and affordable manner.
Q. Are there certain areas of a business you would advise small businesses to focus their attention on when it comes to adding new technology?
A. There are certain businesses and sectors of an economy that must have the best and updated technology. Critical infrastructure detection, hospitals, banking, transportation, food production and preparation are just a few sectors that impact millions of lives. The wrong reading of an instrument or the improper access of data can create a critical or life-threatening situation. Regulations are also in place to make sure that the public is protected and privacy maintained by those who wish to do harm.
Q. How and why should SMBs incorporate artificial intelligence into their organization?
A. Artificial intelligence (AI) or machine-learning is becoming more commonplace in small businesses. Because of technological advancements, SMBs are able to provide services to myriad customers in diverse places.
The access point to these businesses in the past were individuals who periodically would take a manual reading of instruments or who had to physically travel to a customer site for repairs.
With AI and machine learning, a small business can now remotely access their customers' machines and instruments that are critical to their operations. This access provides not only for the reading and monitoring of data but also allows for repair and updates to be made to their systems.
SMBs are also taking advantage of other services (outsourcing or off-shoring) provided by other small businesses that can provide them an increased capacity to offer more services. Using AI, this is now possible and is done seamlessly.
Q. Are SMBs best suited by trying to stay ahead of the technology curve? Or is waiting to see which technologies take hold and then adopting them a better strategy?
A. Many SMBs in certain industries are uniquely positioned to take advantage of cutting-edge technologies and solutions. Businesses that are classified as early adopters are ones that recognize that their advantage in the marketplace is to provide improved customer service or offerings at an affordable price. These businesses will not serve the masses, like large businesses or the incumbents, but what these businesses bring is a nimble, fast-moving service to the marketplace.
Once these businesses have gained notice in the marketplace, a larger business may enter into a joint agreement with them or work to complete an acquisition. It is to the advantage for the SMB to bring something new (innovation) to the marketplace.
Q. To keep things running smoothly when a change is being made, what tips do you have for SMBs when it comes time for the actual implementation of new technology?
A. Small businesses should consider what is a must-have versus a nice-to-have technology or service to make them compete effectively in the marketplace.
The primary use of technology is to gain an advantage in the marketplace. One question could be will this technology allow me to keep my existing customers and add new customers as well? This includes the cost of technology, the training required to use technology as well as the scalability in the business.
Cybersecurity is now the No. 1 concern for SMBs. The saying goes, "an ounce of prevention is worth a pound of cure." It is imperative that safety and privacy protection must be core component of an SMB technology strategy. The buy-vs.-lease decision must also be considered in the technology adoption strategy.