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Competing in the Digital Economy

How SMEs Use Technology to Be Leaner, Faster, and Smarter

by Steve Graham | SAPinsider, Volume 16, Issue 4

October 9, 2015

Today’s digital economy has helped small and midsize enterprises (SME) compete more effectively in previously inaccessible markets. Yet it also allows suddenly nimble large companies to compete in the same space. Read this article to learn how SMEs can fend off these challenges and enter new markets by leveraging new technology in the SAP SME Solutions portfolio to become leaner, faster, and smarter. 

 

The emergence of the digital economy has resulted in profound shifts in the competitive landscape for companies of all sizes. Through the innovative use of technology, companies are becoming more connected, more resourceful, and less constrained by the traditional middlemen. Companies such as Airbnb, Uber, and Netflix are just a few examples of firms uprooting the status quo in their industries by using emerging technology in creative ways.

For small and midsize enterprises (SMEs), the digital economy helps level the playing field so they can more effectively compete in markets that were previously inaccessible. But at the same time, it opens the door for large companies to become more nimble. It helps them better connect with customers and take action, and it provides them with a fresh perspective on new markets and opportunities. Market segments that once looked unattractive and unprofitable are suddenly much more interesting when they can be pursued in aggregate, or at a much lower cost.

This is the business reality facing SMEs around the world. They must be constantly on the lookout for opportunities to exploit technology advances in the markets they serve, yet defend themselves from the incursion of larger companies using technology to expand their reach.  

 

The digital economy helps level the playing field so SMEs can more effectively compete in markets that were previously inaccessible. But at the same time, it opens the door for large companies to become more nimble. 

Leaner, Faster, Smarter

To handle these market challenges, SMEs are finding ways to use technology to put prevailing business trends to work — to be leaner, faster, and smarter: 

  • Leaner: SMEs are making a huge impact with a smaller staff, and their goal is to stay that way. They’re leading the charge to make greater use of freelancers and remote workers, with fewer dedicated, full-time office workers. But more importantly, leading companies are taking a page from the “lean startup” movement, a business methodology that originated within the startup community, but whose principles are being embraced by companies of all sizes. The methodology helps companies improve their chances of success by following its principles of failing fast and continually learning.
  • Faster: In the current business climate, success requires scale. To become scalable, you need to conquer complexity by focusing on simplicity. Any direction you go, it’s about being able to quickly take favorable behaviors and make them expand across your company — if you can’t scale, you can’t grow fast. According to the work of Verne Harnish, a thought leader in the small business space, companies wishing to overcome complexity must focus on three things: enhancing the skills and capabilities of the leadership team throughout the organization; developing a scalable infrastructure to help manage increasing complexity that is often synonymous with growth; and increasing marketing effectiveness.1
  • Smarter: To compete effectively, SMEs often view advanced technology as an essential ingredient to their core business. These companies are poised to reinvent marketing, for example, for the new buyer journey, and they understand the value of social media as the backbone of an effective marketing approach. With easier and more economical access to solutions in the cloud, in-memory technology, and user-friendly analytics solutions, SMEs can obtain and act on valuable information, and thus better compete and grow.

Enabling the Next Generation of SMEs

With the complexity of SME business challenges, and the unique requirements within specific industries or markets, a one-size-fits-all approach to SME solutions just doesn’t work. 

The SAP SME Solutions portfolio is the result of ongoing innovation from SAP and our partner ecosystem. The portfolio has been carefully crafted, nuanced, developed, and matured to give SMEs everything they need to run their business. It’s all powered by SAP HANA and all available on premise or in the cloud (see Figure 1). The SAP partner ecosystem, which consists of 13,000 partners, plays a significant role by providing industry-specific extensions, in-market implementation expertise, and complementary products and services.

 

Figure 1: The SAP SME Solutions portfolio is available on premise and in the cloud

 

The SAP SME Solutions portfolio consists of four products: SAP Anywhere,2 SAP Business One, SAP Business ByDesign, and SAP Business All-in-One (see Figure 2). But companies should consider these offerings as just the starting point — the SAP technology available for SMEs goes far beyond these four products. From the Ariba Network to Concur’s tools to manage travel and expenses, SAP has opened the door to provide SMEs with a broad spectrum of options. More than 230,000 SME customers use SAP technology in more than 190 countries worldwide. This is a substantial group of companies, which collectively represent more than 80% of SAP customers.  

 

Figure 2: An overview of the SAP SME Solutions portfolio

The SAP SME Solutions portfolio runs on the same innovative SAP HANA platform used by the world’s largest companies, but is streamlined to meet the specific needs — and scale — of an enterprise of any size. SAP HANA provides customers with the power and the insight of in-memory computing that doesn’t slow down your business. It’s a benefit realized by Anyou Biotechnology Group, which provides high-quality feed to farmers in 26 provinces across China and Southeast Asia.

By working with SAP partner MTC to deploy its industry solution based on SAP Business One, Anyou increased operational efficiency by 60% and reduced its monthly accounting and closing cycle from six days to two days.

The stability and scalability of SAP Business One, combined with real-time data access and analytics possible through the SAP HANA platform, help Anyou stay ahead of customer demand and make better inventory and overall business decisions.

Solutions Designed to Win

Building a successful company is hard work. SAP is committed to providing SMEs with the innovative technology they need to run their business, grow, and win. Together with our partner ecosystem, SAP can help create a customer experience that is simple, elegant, and prepared for the digital economy.

To further explore the SAP SME Solutions portfolio, visit www.sap.com/community/ebook/2015-01-sap-guide

 

 

 

1 Inc., “The 3 Barriers to Scaling Up Your Business” (November 2014; www.inc.com/dave-kerpen/the-3-barriers-to-scaling-up-your-business.html). [back]

2 See the article “More Than Just an Online Storefront” in this issue of SAPinsider. [back]

 

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Steve Graham
Steve Graham

Steve Graham (s.graham@sap.com) is Vice President of Global Partner Operations — Marketing and Communications, at SAP. Over the course of his marketing and industry analyst career, he has published research and delivered presentations on topics including technology ecosystems, partner-to-partner networks, shifting technology industry business models, and intellectual property trends in the software industry.



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