Techaisle's extensive and unique survey research (N=1476) on US SMB & Midmarket Digitalization trends shows a great belief in SMBs’ organizational commitment to digitalization strategies. Survey data shows more than 40% of small (10-99 employees) and midmarket (100-999 employees) businesses believe that they are “holistic” with respect to digital transformation – that within their firms, the Internet and digital technologies impact every aspect of the business and are at the core of organizational strategy. Another large proportion of the SMB population – 30% of small businesses, 43% of midmarket firms – report that their organizations are best categorized as “inclusive,” seeing digital as important to the business, but as a relatively minor factor in strategic planning, and not having organization-wide impact. Lesser proportions of both populations (20% of small, 12% mf midmarket) see themselves as ‘siloed’ with respect to digital initiatives, and less than 5% of both groups believe that their digital strategies are either ‘in the shadows’ or ‘nonexistent.’
Constraints to digitalization strategies
Is it likely that the claims of 40%+ of SMBs to be ‘holistic’ with respect to digital transformation would survive careful case-by-case scrutiny? There is at least some reason to doubt it. A follow-on question asked about inhibitors found that 30% of SMBs “lack the skills” to embrace digital business practices; nearly as many (28%, rising to 36% in small business) cite staff or management reluctance to change current practices as a barrier to digital business adoption, and substantial proportions of the SMB community also point to “lack of investment capital/budget” (26%, and again, higher within small business) a risk averse corporate culture (24%) and inadequate installed technology (23%). In all, seven different constraints were cited by at least 20% of SMB respondents – highlighting the fact that SMBs face numerous challenges to development and adoption of effective digital business strategies.
Anticipated digitalization business benefits
If the constraints are so widespread and varied why does the research find such a high proportion of SMBs dedicated to holistic digital strategies? The answer is found in ‘the upside’ – the benefits that SMBs believe that they will capture through digitalization.
To develop insight into SMB expectations of digital business benefits, Techaisle included two complementary questions on its latest survey. The first read, “What are the business outcomes that your organization is expecting as a result of increased digitization?” The second, restricted to the categories selected in the first question, asked “If you were to quantify the percent change in business outcomes what you would say, the change your organization is expecting? For example, 10% more increase in revenue as a result of increase in digitization.”
Results to these questions are arresting. More than half of SMBs believe that their digital business strategies will deliver increased revenue, and they peg the magnitude of that increase at 16%. A similar proportion see digital business boosting profitability – again, by 16%. “Better customer satisfaction and retention” (42% of respondents, average of 19% improvement), “decreased cost” (38% of respondents, average savings of 13%) and “increased sales reach (33% of firms, average improvement of 17%) were also cited as digital business benefits by one-third or more of SMBs surveyed.
There are two clear observations from this. The first is that the expectation level is unrealistic: a company increasing revenue by 16% that also increased margins by 16% would realize a nearly 20% bottom line improvement from its digital business investment. The other, though, is that belief in digitalization is extremely high within the SMB community. Marketers are wise to investigate ways of tying their messaging and positioning to digitalization.
The US SMB & Midmarket Digitalization trends survey report is designed to provide guidance to IT vendors and channel partners responsible for digitalization strategies that affect sales and marketing of advanced IT solutions to SMBs & midmarket firms in the US market. The report is an essential guide, driven by deep data analysis, that addresses issues critical to formulating and executing on go-to-market strategy predicated on digitalization.
The report is based on a 21-minute telephone survey conducted by Techaisle. A total of 1,476 US small and midmarket businesses completed the survey. The respondents were a mix of IT and Business decison makers. I most origanziations there were multiple respondents. Sampling quotas were fixed to ensure representation of six employee-size segments: 10-19, 20-49, 50-99, 100-249, 250-400 and 500-999. All data and analysis included in this report is based on surveys conducted with US-based respondent organizations. A sample of 1,476 is outstanding for single-country, SMB-specific research, and is considered accurate at a 95% confidence level (19 times out of 20) at a margin of error of +/- 2.7%.
Techaisle believes that the size, robustness and recency of this data makes it the most reliable source of information on digitization in the US SMB market.
SMB Data You Can Rely On | Analysis You Can Act Upon