How much can technology power up your business? The answer might surprise you. In a study performed by the Boston Consulting Group for Microsoft, small and midsized companies that led in adoption of technology increased annual sales 15 percentage points faster than companies that didn’t adopt new technology—and they created jobs almost twice as fast.
The study, which surveyed over 4,000 small and midsized companies in five countries including the U.S., breaks business owners into three categories:
Leaders use a variety of technologies including cloud-based services and apps; online, social and mobile capabilities; VoIP and messenger apps; and productivity hardware and software. They’re willing to explore what the latest technology can do, such as managing customer relationships or analyzing data.
Followers aren’t Luddites, but they’re not early adopters, either. They typically take up technology tools once the tools are well established. For instance, 30 percent use VoIP and 60 percent have a website. However, they’re still not using cloud-based solutions and they’re only minimally making use of mobile apps. Their revenues and job growth is “dramatically” lower than the leaders’.
Laggards—well, it’s hard for me to believe there are still business owners like this. These entrepreneurs have no online presence; only 60 percent of them even use computers, go online or use productivity solutions. No wonder their businesses perform far worse than those of either leaders or followers.
I certainly hope you’re not a laggard (you wouldn’t be reading this if you were), but if, like most, you’re a follower, stepping up to leadership can pay big dividends. The study compares cloud technology to transformational changes like the adoption of the PC and the Internet as business tools—except, it says, cloud technology “creates the potential for even more far-reaching innovation and business growth.”
So what does it take to be a technology leader? The study identifies five ways leaders tap into technology:
- They use it to connect with new markets, collaborators and customers. Cloud-based communications tools such as VoIP, online portals and social networks help companies build stronger relationships and more satisfied customers.
- They capitalize on the scalability and flexibility cloud technology offers. If your company gets mentioned on TV and sees a surge of orders, for example, you can use pay-as-you-go cloud services to quickly scale up so your website doesn’t crash and you can handle the traffic.
- They use technology creatively to streamline operations. Cloud technology helps you manage your people and your data better. Smart entrepreneurs are using it to collaborate, gather information and sort through the information to plan their business strategy.
- They use technology to innovate and experiment. Five times as many leaders as followers or laggards say they are usually the first in their markets to use new technologies. Thanks to pay-as-you-go models, they can test technology and see what works without a huge financial commitment.
- They adopt technology cost-effectively. Technology leaders don’t just throw money after new bells and whistles. The study found spending more didn’t correlate with growth. Instead, tech leaders look for tech tools that offer flexible payment models. On the other hand, it’s about value, not cost: They’re willing to assess the long-term value of technology and also tap into expert advice for help when they need it.
If you’re not sure how technology could power up your business, tap into the expertise of SCORE and talk to a SCORE mentor who can help.