Why is the technology ecosystem so important to SMEs? What is it, and why should business owners care? In this blog I look at how forward-thinking businesses are re-writing the playbook to help them move faster and beat bigger rivals.
When you’re re-writing the play book, you’ll need a strategy. Our guide, Strategic Planning: An Essential Guide to More Success may help. It’s an in-depth article to help you create a more successful business future. It’s a step-by-step guide from theory to action.
Let’s start the journey by looking at the traditional IT department. Their aim is to keep everything running smoothly and kept secure. A world of building, buying and managing applications. These run in a secure fortress of firewalls and internal controls. There’s the big bad outside world and safety and control within the IT landscape. That sounds awesome, what’s the problem?
There’s no problem if the world stayed still and there was plenty of surplus cash. At this point I need SME owners to suspend judgement for a moment. You might think this doesn’t apply, after all you’re probably using cloud. Hold that thought. In a changing and competitive world, there are a couple downsides of traditional IT that hurt bigger players.
Firstly, it’s expensive. Every application has its own concepts, processes and terminology. It’s costly to run and maintain in house. Then there is the cost of adapting to changing business needs and making it work with other systems.
Secondly, it takes too long to innovate. The business will invest heavily in integration and customisation. These don’t change on a dime. They are complex and difficult to change. You only have so much cash to throw at problems, so you tend to have a big backlog of business changes.
What is a Technology Ecosystem?
Now to the exciting bit, the technology ecosystem! Imagine having access to a world of innovation. A world full of smart people coming up with endless ideas to help your business.
As an example, let’s look at Facebook, Twitter or LinkedIn as a selling ecosystem. That’s outside your business, yet it’s tech used for social selling. Or what about SaaS customer relationship management or payment systems. They provide capabilities that you didn’t buy, and you don’t run or maintain.
With the internet of things (IoT) we live in a changing world with Cisco saying there will be 50 billion connected devices by 2020. In a previous blog, we talked about one company increasing sales by twenty three percent using weather data. Then there’s the trove of data held by google. Imagine what you could do with all that data!
SMEs can move faster by reusing building blocks in the technology ecosystem. For example, you can listen to this blog because it reuses services from Amazon. Amazon provides a range of reusable building blocks (of course, there are many other providers). One example is creating all the different video formats for social media etc… Once upon a time you’d create a film for TV or the cinema. These days every streaming and social media platform wants video. Each requires a different format. Instead of buying different costly systems, you can use the Amazon pay as you go service to create all the different formats from a single source.
I mentioned a world of smart people that have great ideas to improve your business. Ecosystems enable those smart people to create new apps. We’re happy to download apps on our phone. Now imagine having access to business grade apps designed to work in an ecosystem.
Barriers to using technology ecosystems
I’m sure many SME owners would now be patting themselves on the back and saying I’m glad I’m using social media and cloud. The question is, have CEO and business owners kept pace and changed their view of technology in their business? It’s one thing to use social media and cloud, another to make full use of the technology ecosystem to advance a business.
In the past decade, our relationship with technology has changed rapidly with advances in mobile and cloud. Business owners might feel like covering their ears and saying, “la la la”, when it comes to the flood of new technology. They might feel overwhelmed with so many options to choose from. This and lack of time can become a barrier to experimentation and adoption. Owners may prefer to avoid the risk and uncertainty of using technology to move the business forward.
There are also new problems and risks with using technology ecosystems. Then there are the service level agreements, partner relationships, integration and security. For businesses to take advantage of technologies, they need to create a more plug and play approach to working with new vendors.
Why should SME leaders care?
SME leaders should care about technology, in part because it’s reality, and if they don’t, rivals will. That’s a given. Understanding how a technology ecosystem provides building blocks for new capabilities is the future. Effective use of these building blocks enables SMEs to move faster and compete with bigger players.