Using agility to resist economic instability and level the playing field

Published On : 10/28/2016

By Gavin Fell, General Manager Exact Cloud Solutions in the UK

In the aftermath of the 2008 economic crisis, there is no question that times have been challenging for smaller businesses. But at the same time, the changing global marketplace has presented new opportunities that have allowed many small and medium-size enterprises (SMEs) to kick-start growth and punch above their weight.

Since 2014, SMEs across Europe have continued to grow, according to research from the European Commission. In the period covered, SMEs accounted for 71.4% of European employment growth in non-financial businesses. Not only is this a reflection of the role that SMEs play in being the bedrock of most economies, but it is also a reflection of the growing trading opportunities open to today’s smaller organisations.

On the web – everyone is global

It was just 20 years ago, with the Web in its infancy, that SMEs were still just that – smaller businesses. Mail order and physical trading outlets were the norm, largely anchored to their country of origin as a marketplace. However, the rise of the Web as a dominant platform for commerce has completely changed the landscape. With e-commerce, every SME is now a global business. Furthermore, without physical premises on which to accurately judge size and scale, user expectations are the same as that of online businesses, regardless of actual size. E-commerce has levelled and democratised the global marketplace to the benefit of smaller traders.

A small business can be present on the Web, or a marketplace, selling its wares side-by-side with smaller and larger competitors – all with equal opportunity and potential for visibility. SMEs can compete head-on with larger rivals, can vie for larger shares of business, and can operate without the stigma of being “too small to deliver” – that could push some towards larger suppliers for safety. However, today’s e-commerce-savvy consumer and B2B buyers are looking less for safety, and more for innovation, disruptive business models and services, and the best deal – areas that agile, nimble and cost-effective SMEs can deliver, where larger rivals may struggle.

Being agile will allow an SME to pursue and respond to opportunities faster than its larger counterpart that, due to its size and processes, may be far slower to react. It’s like trying to rapidly turn an oil tanker. SMEs can move to offer new products and services quickly, taking ideas and turning them into real opportunities at speed. Larger businesses, with layers of internal processes, reviews and legacy systems, can seldom implement and deploy as fast.

Using agility for competitive advantage

Today, SMEs must contend with doing business at an international level, dealing with new forms of competition, and competing with disruptive business models. To win, businesses have to be more agile in order to take advantage of the business opportunities in the market and compete with larger challengers.

That being said, the marketplace challenge for SMEs is continuing to evolve. Expansion into new geographical markets also creates operational challenges. These come due to the expansion of the workforce and compliance with local laws, taxes and processes. Furthermore, there’s the issue of whether existing software and processes can scale with the growth of the business. It also means more people need access to business information, often in real-time.

Having nimble business systems will keep costs in check for the SME, helping them to ride out tougher economic times. Meanwhile, solutions that leverage the cloud for anytime, any place,anywhere working are key to enabling agility and allowing SMEs to operate a low-cost, high efficiency and high return business strategy. Additionally, cloud-based service providers can take on the burden of things like local accounting process compliance. Thus ensuring the accounting solution the SME is operating with is in-sync with current tax, accounting and reporting regulations in any given region where the SME is doing business. This will mean an SME with limited resources can focus on actual trading. Not having to tie up staff and money on costly, fragmented, multi-market accounting processes can make a huge difference to both the bottom line and the viability of expanding into a new market for a small trader.

Business administration and operation factors can significantly alter an SME’s ability to be adaptable and maintain an advantage over larger competitors. As they grow and expand, SMEs must fight the temptation to add complexity to their operating models. Staying lean and implementing flexible infrastructures, services and administration processes early on will allow SMEs to remain agile throughout their growth. Crucially, it allows SMEs to ensure resilience against economic uncertainty whilst continuing to expand and take on rivals on a more level playing field.

Wanda Rich

Wanda Rich has been the Editor-in-Chief of Global Banking & Finance Review since 2011, playing a pivotal role in shaping the publication’s content and direction. Under her leadership, the magazine has expanded its global reach and established itself as a trusted source of information and analysis across various financial sectors. She is known for conducting exclusive interviews with industry leaders and oversees the Global Banking & Finance Awards, which recognize innovation and leadership in finance. In addition to Global Banking & Finance Review, Wanda also serves as editor for numerous other platforms, including Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.