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What SMEs can learn from e-commerce giants

About the Author

Steve Roberts is VP of Sales, UK SMB at SAP Concur.

Whenever anyone mentions the global economy, it's easy to imagine the world of big business. Brilliant skyscrapers, mahogany boardrooms and corporate acquisitions with cutthroats may come to mind – but they should not be our first thought.

In reality, smaller companies are the driving force behind our economy. A look at the UK figures shows why: small and medium-sized enterprises (SMEs) in the private sector account for 99.9% of all businesses, employ 60% of the workforce and generate more than half of total revenue. Not only are SMEs the engines that keep our economy running, but they are more than half of the aircraft.

Empowering this group of SMEs to be more efficient, productive and profitable can boost our economy. Applying data and insights to achieve realizable gains of just a few percent in these areas will directly drive more SMEs to hire, grow and stay in business. Small improvements can have a big impact if they are introduced on a large scale.

In order for SMEs to achieve this higher value, their B2B business partners need to pursue a new way of thinking. Regardless of whether SMEs are customers or part of their supply chain, large companies need to enable SMEs to work with them more easily and effectively ̵

1; and this needs to be scaled-up.

The Revolution of the Mind

New technologies are crucial to play in tackling this challenge. Today we are witnessing the emergence of an increasingly interconnected world in which the relationship between people, processes, things and information is rapidly changing.

This transformation, called the "Fourth Industrial Revolution" by the World Economic Forum, takes us from a world where machines support and expand human choices, to a world of ubiquitous automation and autonomous decision-making.

While the first industrial revolution was about horsepower, with manual production replaced by faster and cheaper factories, machines are now ready to automate brain performance. Not only does this mean that what used to take a team of 50 people can now be done in a group of half the size. The scalability of today's SMEs was unimaginable just two decades ago. This allows the team to significantly increase performance rather than just reducing the number of employees.

In addition, smaller companies are well positioned to capitalize on the growing trend of out-of-the-way, flexible and freelance activities that provide greater operational agility, easier access to talent and reduced business space expenses.

Large Scale Support for SMEs

From free trials and product discounts to supplier training and events, B2B companies have traditionally struggled to address the core issues of their SME partners and customers in a coherent manner. For example, SMEs are often forced to take incremental steps in sourcing the products and services they rely on on a daily basis. How can B2B companies change their approach to make the biggest difference to the broadest possible group of SMEs?

We can be inspired by the booming world of e-commerce. Retail giants like Amazon and Alibaba have changed the world by operating at unprecedented levels. In fact, Amazon now accounts for half of all online sales in the US alone. However, these companies are increasingly using the same attitude of the mass market to support the B2B world.

For an SMB retailer, Amazon now offers almost everything from a single source – a combination of digital shop, delivery logistics, web services and more in a corporate partner. This simplifies and simplifies the lives of SMEs, which can leverage Amazon's economies of scale to achieve a massive market, minimize operating costs, and grow seamlessly with demand.

Of course, this business model is also of great use to Amazon, as you would expect from a Top 10 Fortune 500 player. Once an SME enters the Amazon ecosystem, the company can easily provide additional services, all for a seamless one Cooperation are designed.

Since SMEs are understandably more interested in running their core business than in researching and managing different services, Amazon has a tremendous market advantage – in fact, almost a trapped target audience. With thousands of SMEs as the user base, the company has a fantastic foundation to build on when exploring new market opportunities.

B2B companies should leaf through the e-commerce book to better serve SMEs. Businesses need to do more than just solve their own internal challenges. They need to make sure that they can better serve their clients, focusing on the common issues that run throughout the SME community. We need to focus our attention on helping individual companies and partners release tangible changes in the way thousands of SMEs do business. SMEs can easily connect to a coherent ecosystem of functions that meet their core needs. By building a corporate network, B2B organizations can leverage data and insights to seamlessly solve SMB challenges and automatically deliver value.

For example, consider how this may affect the finance departments. At a fundamental level, link services can move the needle in areas such as the productivity of SMEs, such as allowing company cars to track trips to create expense reports, or submit restaurant vouchers via a mobile app. With a real-time, automated feed of information, financial teams can instantly view expenses and cash flows in a single dashboard instead of analyzing reports.

Yet, financial teams can take even more advantage of this interconnectivity. For example, with immediate insight into spending, an unissued customer care budget in one department could automatically be tagged for reassignment to another, so an upcoming event can become even bigger and better.

More and more companies are joining the dots Because of their capabilities, we can even envision scenarios in which smaller companies may be able to access an order of magnitude that was previously far beyond their reach. This, in turn, lowers the cost of core services by joining forces with other companies looking to purchase similar technologies or services. This type of interconnectivity is increasingly increasing the success of SMEs by eliminating wasting time, showing new opportunities and supporting growth.

Applying an "e-commerce mindset" has the potential to change many different business sectors. The unprecedented combination of innovation, agility and scalability that results can ultimately change the balance of power in the corporate world and shift the focus from big business to smaller companies.

With combined annual sales of £ 2 trillion in the UK alone, it is not only beneficial to owners, employees and B2B service providers that SMEs become more efficient and productive, but to the entire global economy.

Steve Roberts is Vice President of Sales, UK SMB at SAP Concur .

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