Navigating Success for Small and Midsize Businesses: Four Key Growth Considerations

Small and midsize businesses (SMBs) are the growth engines of the future—and many of these businesses are growing dramatically. Yet, in an uncertain economic climate, SMBs must lean into technology to increase efficiencies and optimize resources. To compete with their larger counterparts, digitally savvy SMBs should leverage new technology and increase budgets for IT solutions and connectivity services that drive greater business, operational, and customer agility. 

“IDC FutureScape: Worldwide Small and Medium-Sized Business and Digital-Native Business 2023 Predictions” outlines key technology developments that are essential areas of investment for SMBs in the coming years. Below are the top four predictions and their significance in enhancing agility and efficiency, and capitalizing on emerging opportunities for these businesses.

1. Empowering Efficiency and Productivity with Automation 

Rapid advances in enterprise technology have ushered in a new era for SMBs in which automation plays a central role in helping organizations optimize business-critical resources. 

According to IDC, by 2027, two-thirds of SMBs will increase investments in automation and digital tools to make up for the shortage of workers and increased labor costs, reduce manual processes, and boost productivity. 

Survey data reveals that 31% of SMB respondents already consider automation a top priority, particularly at medium-sized companies with 100 to 999 employees. As inflation drives up the costs of skilled labor and businesses are forced to reassess their workforce strategies, automation stands out as an increasingly attractive solution. Powered by AI and machine learning (ML), innovative technologies provide SMBs with cost-effective ways to streamline operations, reduce human error, and enhance efficiency.

Embracing automation, however, isn’t just about integrating technology; it’s a strategic move that demands careful consideration. SMB leaders must focus on automation solutions that leverage AI and ML to drive more strategic value from data, while simultaneously eliminating manual processes that burden staff and lead to human error. Standout examples of this type of machine-learning-based automation are programs that refine marketing strategies or identify fraudulent transactions by learning from past patterns. 

When integrating automation into established workflows, it’s important to start small and target specific areas of the business that will drive immediate impact. Instead of attempting to automate everything all at once, companies can identify the low-hanging fruit, such as mundane and time-consuming tasks, that can be automated quickly by integrating new tools into existing systems.

2. Fostering Business Agility Through Cloud Adoption

Cloud computing has transformed the way SMBs operate, providing access to scalable technologies without hefty up-front investments. The shift toward cloud-based services enables businesses to adapt to changing needs and market demands seamlessly and with minimal up-front investments. Because of this, IDC anticipates that by 2025, 30% of SMBs will shift half of their core workloads to the cloud to drive business agility and future resilience. 

This shift to the cloud signifies a transformation. While SMBs historically lagged behind larger enterprises in adopting cloud solutions, they are finally catching up and realizing the strategic advantages of the cloud. In an uncertain economic environment, facilitating cost-effective operations and enabling greater real-time visibility to power data-driven decisions can make or break an organization. 

Unlike traditional on-premise infrastructure, cloud services give businesses freedom and flexibility to pay for the computing power they need, precisely when they need it. This flexibility, in turn, enables SMBs to respond to rapidly changing market conditions and demands. 

As with automation, transitioning workloads to the cloud isn’t just about adopting new technology or a simple “lift and shift” approach—it demands a well-considered strategy. To maximize the benefits of cloud solutions while maintaining their cost-effectiveness, SMBs must create a long-term roadmap for cloud technology investments and establish metrics to track ROI. 

A key piece of the roadmap requires IT decision-makers to convince business leaders of the strategic importance of the cloud and demonstrate its direct link to increased business value. A comprehensive strategy will likewise require careful consideration of how cloud solutions will integrate with existing on-premise systems and a willingness to evaluate and adjust approaches, as necessary. Moreover, migrating to the cloud requires new skills, whether through hiring new talent or upskilling existing employees. Assessing internal cloud enablement skills is vital to identify areas for improvement before undertaking any sort of migration. 

While this comprehensive approach may require additional time and resources in the short-term, it will ultimately ensure a smooth transition to the cloud and position SMBs for future long-term success.

3. Intelligent Decision Systems: Harnessing Data for Growth

Businesses know that data can be more valuable than gold. But without the right tools to extract business value from data, it can quickly become more of a liability than an asset. 

Intelligent decision systems, driven by AI and ML, are quickly becoming indispensable for SMBs. These systems help businesses make sense of vast amounts of data, transforming it into actionable insights. With the ability to analyze consumer behavior, optimize supply chains, and automate processes, intelligent systems empower SMBs to adapt swiftly to market changes. By investing in these technologies, businesses gain a competitive edge, foster innovation, and achieve sustainable growth.

Savvy SMB leaders already recognize how intelligent decision systems are redefining the business landscape, and others are starting to take note. By 2025, IDC estimates that 30% of SMBs will harness the power of AI and ML to revolutionize their research and development (R&D) efforts and to streamline their supply chain management processes. 

This shift toward intelligent decision-making is driven by a number of factors. Certainly, it reflects the rapid evolution of AI and ML technology and the proliferation of intelligent decisioning solutions available in the marketplace today. However, it’s also a response to the business challenges posed by recent macroeconomic shifts and to the accelerated digitalization of consumer interactions. 

Recent global events drove consumers to wholeheartedly embrace online business transactions, leading to a wealth of digital data. This rapid influx of data overwhelmed many SMBs, though, prompting the need for intelligent systems to mine this data for actionable insights. These systems not only make sense of vast amounts of data but also provide crucial guidance needed to prepare for the future. With their ability to improve forecasting and resource planning, support HR and workforce needs, and simplify supply chain management, intelligent decision systems will play a crucial role in helping businesses adapt quickly and achieve true resilience. 

Since intelligent decision systems rely on data, IT departments and business leaders must work together to break down silos and incorporate and optimize data from various business processes and workflows. This means finding ways to create a unified digital ecosystem centered around shared data platforms, and ensuring a common source of truth to enable real-time visibility and agility. By focusing on cost reduction, process optimization, and increasing agility through intelligent systems, SMBs can thrive in the face of evolving market demands.

4. Strategic Focus: Demonstrating Long-Term Business Outcomes

For the subset of SMBs that are digital-native businesses (DNBs), investors are increasingly prioritizing investment in companies that can demonstrate long-term outcomes over rapid market entry. In response, IDC projects that by 2025, 30% of DNBs will shift focus from speed to market to demonstrable business outcomes to secure capital, boost differentiation, and achieve sustainable and resilient growth. This will require DNBs to invest in flexible and scalable IT infrastructures that enable quick adaptation to evolving market demands. 

In particular, IT teams will need to prioritize technology investments in low-maintenance, high-yield solutions that enable greater automation and data-driven decision-making. Not only will investing in these technologies allow businesses to do more with less, but these types of investments will also be crucial for securing funding and helping businesses differentiate themselves in a crowded marketplace.

To make the most of these investments, SMBs and DNBs must think carefully about the vendors they select. In fact, instead of merely choosing a vendor, organizations should look for a technology partner that functions as a dedicated ally invested in their long-term business success. True technology partners provide comprehensive end-to-end solutions characterized by reliability, scalability, and security.

Seizing the Future

In conclusion, as SMBs face the challenges of growth in an uncertain economic climate, technology emerges as their strongest ally. Automation, cloud adoption, intelligent decision systems, and a strategic focus on long-term outcomes are the cornerstones for SMBs’ success in a rapidly evolving business landscape. By investing wisely in these areas, they can enhance efficiency, drive innovation, and foster resilience. 

To thrive in the face of ever-evolving market demands, SMBs should embark on their tech-driven journey with a well-considered strategy empowered by the right technology partners. These investments not only ensure a competitive edge, but also pave the way for long-term growth, turning SMBs into the growth engines of the future.

To learn more about these four technology trends and how implementing them will propel your business forward, check out this on-demand webinar.