Breaking through the small business glass ceiling
Peter Ross, Director, On Demand Solutions
How many fantastic small companies are hitting a glass ceiling? Fear of overextending is constraining the expansion of some great business ideas into a broader market. The business challenges are the same: A small distribution or wholesale organisation faces the same challenges and business needs as larger competitors - from real-time performance information and integrated e-commerce to just in time stock management and mobile workers.
Yet most organisations face the unpalatable choice: stay small with current technology or risk the business on a major investment to access the technology and innovation required to take the next step.
There are many challenges to starting a new business, but today technology is not one of them. Entry level finance, customer relationship management, even web sites are accessible and affordable.
It is 18 months down the line, however, when the business is expanding and it needs to take the next step that the problems arise. Extending the functionality of the web site to offer true e-commerce; creating a fully integrated solution to provide end to end visibility and streamline processes; achieving real-time reporting – to acquire this level of technology solution will cost upwards of £150,000. Few organisations can justify that sort of budget.
Yet since entry level solutions are inadequate to support a growing business, it cannot expand. Not only do these systems lack functionality, any organisation reliant upon different CRM, warehousing, finance and e-commerce systems will struggle to scale effectively.
So how can a small business compete against large organisations with large IT budgets? The key is to fight back against the constraints of current IT pricing models.
Right now the IT industry is dictating the terms. Organisations have little choice but to gradually – and expensively – work their way up through a tier of solutions, finally attaining the functionality and features of the enterprise class solution. The only alternative is to take the risk of opting for multiple different solutions and embarking upon expensive and time consuming integration in the hope of achieving some kind of end-to-end solution as a result.
Either approach is fundamentally flawed. Enterprise class features are as relevant to the smaller organisation as the large; but the pricing model means that they are out of reach to all but the largest companies.
How can the small or medium sized distributor deliver not only web based ordering 24/7 but attain a fully integrated e-commerce system that provides real-time stock information and a choice of delivery options? Or ensure the solution can automatically provide each customer with customised pricing based on both contracts and manufacturer promotions?
Breaking the Chain
It is time for the small business to take a different approach. Rather than waste money on incrementally stepping up through a range of IT solutions they should go enterprise class from day one. There is no need to delay expansion due to technology limitations: the same solution should scale from one to thousands of users, have the functionality to enable the business to operate effectively, adopt streamlined processes and embrace innovation.
With access to the right technology, agile smaller businesses should and could have an edge. The key is to gain access to that enterprise class solution and avoid being fobbed off with inadequate and disconnected entry level options that the industry deems worthy of the smaller business. With a fully functional solution from day one, the glass ceiling is removed. Finally, business growth is dependent upon market opportunities and economic viability – not the vagaries of IT vendor strategies.