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Digital transformation key to faster SME growth

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Small and midsized enterprises (SMEs) that have embraced digital technology show faster growth than companies that have not.
According to a new study by SAP that analyzed data from 3 210 respondents in 11 countries who work at a company with between 10 and 999 employees. The study, conducted by IT research firm IDC, indicates strongly that SMEs around the world understand and benefit from the value of analytics, collaborative and customer relationship management (CRM) software to help them run simple and compete with larger enterprises.
The study’s most significant findings about the adoption rate and benefits SMEs are experiencing from digital technologies include:
* More than 39% of SMEs in all regions agree that “active participation in the digital economy will be essential to our company’s survival in the next three to five years”;
* SMEs that grew revenue 10% or more in the last year, say they are “well underway in applying technology to connect people, devices and businesses” – representing more than one-third of all SMEs, and more than 45% of SMEs with between 500 and 999 employees in the survey;
* At least 50,6% of SMEs across all regions surveyed use collaborative software as a result of their digital transformation, making the technology the most used by SMEs. CRM and business analytics software were the next most used by SMEs, with at least 38% and 37% of SMEs in every region using the respective technologies; and
* Between 52,5% and 60,2% of SMEs surveyed said that “new technology solutions have allowed us to begin or continue revising our workflow and processes to streamline operations and improve productivity”.
The study also revealed that SMEs are conscious of certain risks and challenges associated with digital transformation. Many of these concerns were most prevalent among SMEs in North America, Asia Pacific and EMEA. Nearly one-quarter (24,7%) of SMEs in North America for example say they have “done little to no work” regarding their digital transformation.
Other notable findings from the report about digital transformation risks and challenges include:
* About one third (between 30,4% and 36,6%) of SMEs surveyed agreed that “personal relationships among company employees have not been strengthened by our adoption of technology”, with larger SMEs agreeing more.
* Between 35% and 45% of SMEs surveyed are “concerned that we will rely too much on data to make effective business decisions”. This concern was more prevalent among larger SMEs.
“The overwhelming message from this report is that digital transformation has a big impact on small businesses around the world,” says Rodolpho Cardenuto, president: global channels and general business at SAP. “Our portfolio – SAP Business One, SAP Business ByDesign, S/4HANA edition SAP Business All-in-One and SAP Anywhere digital customer experience – is the digital foundation for SMEs to thrive in today’s new digital transformation. It is proven that companies using these technologies run simpler and grow faster. It is also clear that personal connections and business instincts continue to play an important role in making the right decision. SMEs should think about navigating a digital transformation journey that lets them combine the best of both worlds.”