Australian SMEs continue to drag the digital chain: Larger businesses have it all over most SMEs in the digital world

Australian SMEs continue to drag the digital chain: Larger businesses have it all over most SMEs in the digital world

It always surprises people when I tell them about the relative slowness of our smaller businesses to embrace the digital world.

“But we are one of the fastest technology adopters on the planet” is a common response.

“We are the fastest adopters of smart phones in the world” cite others.

These are both true enough, but they relate to our consumers and not our smaller business operators. 

As consumers we really are world leaders when it comes to embracing new technology.  But this enthusiasm for all things techie does not automatically translate into the smaller business world.

In fact, Australian business lags many other first and developing economies when it comes to digital.

Technologically challenged Aussies

Back in 2010, a study by security technology company McAfee ranked Australia 16th when it came to adopting ‘Web 2.0’ technology, trailing far less developed economies like India (though its IT capabilities are well developed), Mexico and Poland.

Frankly this result may well be because most SME operators couldn’t tell you what Web 2.0 actually was!

But I’m writing this not at all to poke fun at our slower smaller business operators, but to identify why exactly smaller business operators lag their larger business counterparts when it comes to the digital world.

Speedy minnows prosper

The exception to the rule is a small percentage of smaller business operators that completely understand the digital world and are able to gain massive advantages over slower moving competitors. 

In fact some of these are now some of the biggest companies in the world.  Apple, Facebook, Google, Hewlett Packard and a bevy of others started out just like the rest of us – small, nimble and usually draftily accommodated.

But in their case it was their lack of size that allowed them to move ahead quickly, unhampered by the bureaucracy and often culture of larger companies.

What these businesses have in common with most smaller businesses though is that they are excellent at what they do best – in their case creating great technology products and services.

Not our core business

But to most businesses, IT is peripheral to their core business rather than the business itself, and so is not intrinsic to the way the business operates.

So even though technology is now critical to business from both an operational and strategic perspective, few SMEs take the technological bull by the horns and beat their competitors to the digital punch.

This notion of technology being peripheral to the business leads to a range of issues that few larger businesses encounter.

Because there is no digital ‘specialist’ driving new technology projects, smaller businesses have to spend time either learning about the area sufficiently to be able to find, hire and guide a provider.

Forced trial and error

And very few succeed with this first time round.  For example they will hire someone who may be technically proficient but lack the creative, content development or marketing skills to deliver an effective result.

Or vice versa – a very creative provider who is less than proficient with technology and so on.

Unfortunately a poorly conceived or executed website or other eMarketing project is likely to deliver poor results.  And commonly good money is often thrown after bad in trying to improve them.

As a result, the business operator can give up on their digital aspirations altogether –  until it becomes clear that a competitor’s digital efforts are blowing them out of the water.

And so they then have to embark on yet another round of self-education and provider search – which can be a lengthy and costly process.

Money talks online

Compare this situation to larger businesses.  Clearly the biggest advantage is the ability to properly resource their digital strategy.  They can hire professionals who are qualified and experienced in digital projects and otherwise resource fully professional online projects instead of trying to fit an education program into an already packed business schedule.

This level of resourcing generally leads to a high quality website, app or online marketing project which in turn yields the desired result, making the larger business even more successful.

So an interesting pattern emerges where a few digital savvy small businesses lead the pack, the bigger ones eventually come tumbling after them (or even buy them out) and a long way back in the pack, are the majority of smaller businesses.

What is certain is that the sooner you can learn about the online world and apply your learnings to your small business, the less likely the chance of a competitor stealing your customers using online techniques.

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