Digital transformation is not something that only large enterprises need to think about. The march of digitalisation – and the benefits it will bring – will have an impact on businesses of all sizes in all industries. If anything, small and medium sized businesses (SMBs) have more to gain.
The cloud is an integral component of this megatrend. The adoption of cloud platforms combined with the greater collection and analysis of data will transform existing processes and enable entirely new ways of working.
Thanks to the cloud, smaller businesses can now access technologies, skills and resources that had previously been reserved for larger competitors. Efficiency and productivity gains will open up new sources of revenue and allow SMBs to be more competitive in the sectors in which they operate.
Most SMBs acknowledge the potential of digital transformation, with 95% of IT professionals implementing digital initiatives either in the past year or planning to do so over the next 12 months.
The initial focus has been around enhancing customer experience, but there is also an understanding that there is a link between external and internal transformation. After customer experience, the areas that SMBs think digital technologies will have the most impact on are operational efficiency and workplace productivity (both 42%).
In short, digital technologies provide SMBs with the agility and flexibility to scale as the organisation grows and to drive efficiencies, empower employees and engage customers.
However, this awareness is tempered by several barriers to entry that could limit the ability for SMBs to capitalise on the opportunities afforded by digitalisation.
Budget is cited as one of the top three challenges by 44% of IT professionals at SMBs. Many IT departments are tasked with the twin roles of maintenance and innovation, but budgets are not increasing to match these increased responsibilities. Two thirds of businesses feel they are being set up to fail as a result, while 60% say they have concerns about cost and efficiency.
As a result, IT departments must make trade-offs and prioritise certain areas. In many cases, this means day-to-day operations take precedence over innovation.
There are also concerns about a lack of skills. IT departments at smaller organisations can be less resourced than larger competitors and this can hamper adoption of new technologies such as cloud infrastructure and platforms.
Specifically, there is a fear of adopting cloud technology without fully understanding the potential impact to legacy systems and the knock-on effect this can have on the business. Two fifths (40%) say they lack the necessary skills for cloud environments. Other transformative technologies are also affected. Nearly two thirds (60%) of SMBs are considering investments in 5G networks but say a lack of skills is holding them back.
Finally, security is a constant consideration for all IT departments. SMBs acknowledge that cloud will be the primary vehicle for business transformation and will enable the innovations that comprise digitalisation, but 50% say managing evolving security threats is a constant challenge.
Compounding all of these issues is a lack of support from vendors and partners.
Nearly half (49%) of SMBs say integrating new technologies with legacy systems is very or extremely challenging when dealing with IT service providers. Visibility and transparency with regards to billing is also viewed as challenge.
It is this context, that can help explain why a recent survey found that 68% of SMBs won’t increase their investments in technology this year despite the fact that cost and operational efficiency is the most pressing concern of 58% of SMBs.
The barriers of budget, security and skills must be overcome if SMBs are to achieve the full operational and financial benefits of digitalisation. In the digital era, cloud is not just a desirable technology, it is an essential platform for innovation that can ease budgetary constraints and boost security.
Cloud services like Microsoft Azure and Microsoft 365 maximise data assets to power new applications and processes that drive efficiency, productivity and revenues. A consumption-based model enables a shift from a CapEx to OpeX model, minimising up-front expenses. Businesses can spread the cost of upgrades across an extended period of time, rather than allocate huge amounts of budget to IT upgrades.
This potential for innovation is supported by third-party maintenance that eases the burden on IT departments. Updates and security patches are applied automatically, meaning the cloud is actually more secure than on-premise infrastructure.
But the effectiveness of the cloud can be hindered by sub-optimal implementation. SMBs with experience in integrating software and hardware in their own data centres might feel they can go it alone with cloud – especially if they feel vendors and partners are incapable of understanding their requirements. However, as the research shows, in-house teams lack the experience and capabilities.
An ideal partner will be able to assist with all stages of cloud adoption. This starts with migration and deployment, and continues with ongoing support that delivers visibility over consumption as well as maximising the efficiency of hybrid environments.
With the right help and a technical roadmap that allows for scalable growth, there is no reason why SMBs cannot fulfil their digital potential and maximise outcomes.
Contact Insight Security Services to see how your organisation can overcome the security challenge of cloud adoption and remove a crucial barrier to digitalisation.