85% of Small Business Owners Report that Use of Technology Aids Success
According to a recent study, a vast majority of SMBs that use digital tools say these tools help them improve business performance and remain competitive. The research, carried out by Deloitte, confirmes that digitally empowered SMBs achieve better financial results and higher employment growth.
Out of a thousand SMBs surveyed, 99% say they use at least one digital tool in their day-to-day operations. However, not all have the same level of sophistication in using technology. Deloitte divided the respondents into four categories according to where they are in their digital journey – basic (23%), intermediate (41%), high (17%), advanced (19%) users.
The study found a correlation between business performance and the level of digitalization. Businesses with advanced use of digital tools are five times more likely to reach new international customers than their less digitally advanced counterparts. Considering the fact that small businesses represent 97.6% of all exporting firms in the U.S., promoting the use of digital tools in SMBs is critical for staying competitive in the global economy.
Furthermore, tech-savvy businesses are three times more likely to create new products and services and are two times more likely to create jobs than those that don’t rely on technology as much. The study underlines that maintaining the status of the world leader in innovation depends on further digital empowerment of SMBs.
Research results also found that sophisticated users of digital tools are three times more likely to experience revenue growth and twice as profitable. So what are the operational areas that benefit from the use of technology the most?
According to the study, over 90% of all SMBs use digital tools for communication purposes, over 80% use them for internal management and logistic activities, and more than 40% rely on these tools for sales management.
Small business owners cite a wide range of digital tools that help them communicate effectively with their employees and customers. These include business email (75%), company website (68%), social media (53%), and company mobile app (24%).
Small businesses rely on software and digital services when it comes to internal management and logistic activities too. Cloud-based software (67%), CRM tools (30%), and intranet (24%) take the lead as the most used tools. Internal software to connect sales with supply-chain operations (21%), enterprise resource planning tools (20%), and corporate social networks (19%) also contribute to processes running smoothly.
A final group of tools considered in the report is used to support the sales process. Sales-oriented small businesses use them to facilitate bookings and purchases through online channels, such as the company website (31%) and the use of third party, e-commerce platforms (19%).
The effects of digital tools on both individual small businesses and the entire economy are highly positive, while the figures show there is room increasing their use. The fact that 70% of SMBs have plans to increase digital tool use in the future is encouraging.
However, 75% of small business owners say they are facing at least one barrier to meeting that goal. The lack of qualified staff who would implement digital tools in the company is the leading challenge, cited by 45% of respondents. Cost and financing (38%) and security concerns (31%) follow as the second and third most common issue.
Read the full report here.