Small and midsize enterprises (SMEs) are making major changes to their business models to take advantage of new technologies such as cloud and social media, in order to compete with large enterprises in global markets. Additionally, the number of SMEs that do business in six or more countries is projected to more than double in the next three years, according to a recent survey of 2,100 executives from SMEs in 21 countries conducted by the Oxford Economics research program on behalf of SAP AG.
“The overarching finding of the study was that successful SMEs are going outside of their home market to accelerate growth. And by doing so, they face fierce competition from large multinational corporations and more empowered customers in new markets,” said Eric Duffaut, SAP AG president of global ecosystem and channels. “In their new international or even global landscape, business network and latest technology innovations are more and more required by SMEs to evolve their business models and effectively compete.”
The survey, which examined SMEs with annual revenue of $20 million -to- $750 million across the globe, found that old stereotypes of SMEs as technophobic, local or regional businesses are no longer applicable. Some of the findings include:
• SMEs are expected to grow outside their home markets while facing increasing global competition at home, with the 15 percent of respondents that currently do business in six or more countries increasing to 35 percent in the next three years and 59 percent of respondents indicating that they compete more with larger companies than in the past.
• Nearly 40 percent of SMEs cite forming strategic partnerships and alliances as a key challenge as they remake their companies for the global marketplace, with cloud computing and social media believed to be important enablers.
• Investing in new technologies is a top strategic priority as SMEs remake their businesses for the global marketplace, including business management software, data analytics, mobile, social media, and cloud computing, with almost two-thirds of those surveyed indicating they strongly believe technology helps them achieve longevity and sustainable growth.
• However, cultural obstacles to technology adoption are becoming a concern to SMEs: 39 percent find it increasingly difficult to recruit people with the right skills, 31 percent find encouraging employees to use mobile technology a challenge, 35 percent indicate a lack of understanding about cloud computing is an issue and 43 percent indicate trouble encouraging employees to embrace social media.
(For additional information, contact: Oxford Economics, www.oxfordeconomics.com; SAP AG, www.sap.com.)