David vs Goliath: Arming SMEs to take on the giants

Small and medium businesses are better positioned than ever before to take on their larger competitors, but only if they have the systems in place to support new growth.

During much of the past decade SMEs have seen impressive rates of growth. Between 2002 and 2008, SMEs in the EU were the most important European Economy job engine. According to the European Commission, with 9.4 million jobs created during this time, SMEs outperformed even large firms.

The onset of the financial and economic crisis in 2008 meant that positive growth within the SME sector ground to a halt. According to the European Union, 150,000 businesses failed last year. Yet as Europe slowly emerges from the recession, there are signs for cautious optimism within SMEs.

For those companies which have survived the past few years intact, with fewer competitors and demand starting to build, there has never been a better time for smaller, more agile businesses to raise their game to work on a new level alongside some of the larger, more established players.

Those SMEs that have survived the economic downturn have every reason to be excited about the future, their products or services are clearly robust and in demand, and should benefit from a recovery in the broader economy. But success brings its own risks, and businesses must proceed carefully.

Sales or service orders coming in thick and fast may sound like a dream come true for any business, but rapid expansion can cause big problems for small firms. One of the key reasons SMBs go out of business is they can grow too fast without the systems in place to be able to scale up to meet demand – this impacts performance, quality and ultimately reputation.

SMEs must ensure they are prepared, with the necessary systems in place to capitalise on potential growth opportunities. Here, we’ll outline some of the ways in which businesses can capitalise on the latest technologies to ensure they are best positioned to compete on a level playing field with even the biggest corporate organisations.

Small is the New Big

Following a period of belt-tightening, the marketplace is opening up to SMEs like never before. The days of the mega IT contract are over. Only recently, UK Cabinet Office Minister, Francis Maude told an audience of chief executives from some of the government’s biggest suppliers that future government IT contracts would be cheaper, smaller and off-the-shelf rather than expensive, bespoke systems, opening up the market to smaller suppliers as equal partners.

Small and medium business owners have a clear opportunity to play on their core strengths; their insight into niche specialist areas, their ability to innovate and form close customer relationships, their flexibility to pare costs to the bone to win business. For years SMEs have been forced to compete against larger enterprises with one hand tied behind their back.

Major organisations have been able to deploy impressive technological solutions which were simply not available to smaller companies and prevented them from getting a foot in. Thanks to the emergence of efficient, scalable and secure technology systems hosted ‘in the cloud,’ and delivered over robust enterprise standard networks, SMEs have access to the power, scale and flexibility they need to compete effectively for major enterprise business.

SMEs must retain a dual focus – their drive for growth must go hand-in-hand with the development of systems and structures to ensure the business can cope with rising demand. There are numerous examples of how a small company can become a big one very quickly – for example, by winning a big new contract, or even simply receiving a promotional boost from a reputable online source – but fast growth can be a double-edged sword.

Managing growth – high performance while growing quickly

Planning for potential growth is just as important to business success as winning new business, and having the right technology and business systems in place is absolutely vital to avoiding strained client relationships, system crashes and numerous other problems – from credibility to cash flow. So how can SMEs meet this challenge?

1. Enterprise grade services – by having enterprise grade IT systems in place, small and medium businesses can access the same computing power previously only available to big business, enabling them to offer more reliable services and compete on a level playing field with larger enterprises.

2. Service Level Agreements – by ensuring stringent service level guarantees are in place from their IT service provider, SMEs can enjoy the security of knowing that they are getting IT services they can rely on, that won’t fall down when needed most. This in turn allows SMEs to support their own customers, both large and small, with service guarantees of their own.

3. Scalable IT solutions – having a scalable technology solution in place is essential for managing the IT requirements of an expanding business or enterprise. In this way, companies only have to pay for the computing power required, safe in the knowledge that as more capacity is needed it will be easily available, allowing business growth while keeping control of costs.

4. Flexible IT solutions – with such a diverse range of businesses, each with their own unique requirements, a one size fits all approach to IT just won’t work for SMEs. Deploying a solution that is flexible and modular will allow you to build and tailor an IT solution that fits your needs – from Internet, email and security through to PC backup and voice.

5. Easily managed IT – Small companies, and even many midsize companies, don’t have large IT departments and in some cases, may not even have dedicated IT managers at all. Working with an IT service provider who can take care of the day to day IT support and operational management of your computer network frees SMEs to concentrate on growing their core business.

The future is bright for many small and medium businesses. New technologies mean that smaller, more agile businesses are now able to both provide services to and work alongside larger enterprises like never before. But having robust, scalable business grade IT systems in place is vital for any SME looking to grow quickly and cope with rising demand.

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Jenni Sach, Colt’s UK Market Manager has over 16 years telecoms experience in various commercial and marketing roles within Colt and Cable & Wireless. Jenni has a wide understanding and experience of the indirect channel and wholesale markets within the UK. She was one of the original switchless resale pioneers and is now embracing cloud services.