Can the SME Hold Off the Online Giant?
Amazon in Australia, the SME and How Business Technology Can Help!
It’s a household name across the English-speaking world and beyond – Amazon; and unless you’ve been living in a remote island paradise for the last 18 months, you’d be aware of the buzz Amazon’s arrival on Australian shores has had. In the technology space, Amazon Web Services has been operating an Australian arm since 2012, but cue forward to 2018 and Amazon now also operates local retail operations on our shores. There can be no understating the effect that the US$150 billion online mega name has already and will continue to have on Australian retail competition and beyond.
It’s no surprise that Australian retailers are nervous-slash-shaking-in-their-boots: 52% see the arrival of Amazon as a serious threat, but only half this number actually have any sort of plan to compete. Investment bank UBS is predicting that the price wars sparked by Amazon’s arrival will have a -0.25% impact on the Australian CPI. What does this mean? Price wars! But does the Australian SME have any margin left to cut anyway?
The state of play for SMEs today
I’m not telling any SME leader reading this anything they don’t already know! The time-constrained, resource-strapped, and digital-skills-short SME is already suffering cost-cutting pressures and change headaches due to:
- Digital disruption of their own industries through the introduction of emerging technologies and disruptive business models. And we’re no longer just talking about the AirBnB’s and the Ubers. Think about your local travel agent competing with Trivago, the Freelance photography studio competing with Snappr, the Graphic designer competing with Fiverr or Canva, the personal loan broker competing with Nimble.
- Increasing pressure to make strategic investments in the very short term to ready themselves for major regulatory changes set to impact on the Australian marketplace in 2018. The triple whammy of new accounting standards and data privacy and compliance rules, the introduction of mandatory data breach reporting, and the effect that GDPR compliance will have on SMEs with EU customers. (It’s a global marketplace now, after all.)
- An onslaught of very invasive global-scale cyberattacks and ransomware that have netted many Australian SMEs in their hauls. With recent reports indicating that 31%of businesses would not even able to survive beyond a week if disabled by cyberattack, the urgency to invest now in more robust cybersecurity and business continuity planning is an added, albeit mission-critical, cost to SMEs.
For many SMEs, there simply is no more room to cut margins or compete on price in the immediate short term.
Does this mean it’s time to pack up our bats and go home?
Most definitely not. If anything Australians are known the world over for their tenacity, resourcefulness and can-do attitude, and our SMEs are certainly backed by some serious entrepreneurial grunt to stay in the game!
It is time, however, for SMEs to either build or revisit their business technology strategy. Truly strategic business technology investments are designed to generate efficiency and productivity gains that will translate into cost savings in the longer term. Overhauls of legacy systems and the introduction of all-new cloud-based operational models, themselves disruptive by nature, will most definitely deliver an ROI if implemented under a strategic business-wide plan, BUT the ROI may not be immediate. It’s a longer term, unite and conquer initiative.
So if the Australian SME cannot compete on price…what can they do?
Revisit their value proposition, find ways they can differentiate themselves from the competition and win and retain customers in areas other than price alone!
Three ways business technology can boost SMEs competitive power
1. Use a cloud-first strategy to level the playing field
Whilst Amazon is a multinational colossus backed by its own technology prowess, SMEs can be confident that they too have the cloud solutions available to them to level the playing field if used strategically.
The beauty of both the current and next-generation cloud services on offer is that they put access to truly enterprise-grade tools in the hands of the SME for relatively little cap-ex; usually on a subscription or per-user basis.
Business side, this gives organisations the opportunity to use cloud-first business technologies to redefine and reengineer if necessary their operating and business processes to ensure that their productivity and response-to-market times increase. Powerful cloud-based tools can also help SMEs turn dormant data into actionable information that they can draw fast insights from to speed up decision-making and action.
Fast decisions, fast actions, fast processes, fast responses = competitive edge!
2. Employ a data strategy to boost customer experience
Organisations can also build into their customer journey enterprise-grade tools for capturing, analysing and reporting on customer browsing, purchase, preference and experience data which will enable to SME to tailor its offerings in the same way that the likes of Amazon does, but in unique and different ways that will suit their market and give them a differentiator’s edge.
Also to assist customer side are some amazing customer review and comment tools can now be readily built into the SMEs customer journey to give the business the immediate opportunity to acknowledge, augment or rectify the great, good or possibly even not-so-great experiences the customer has with your business.
Customer-centric and super-responsive = competitive edge!
3. Build a truly mobile workforce
There are some amazing developments already here and about to become mainstream options for SMEs that will allow your workforce to become truly mobile. Offering more mobile workplace solutions allow you to:
- Access and retain broader range of talent with diverse schedules and work arrangements (including remote employees)
- Dramatically improve staff productivity and response-to-market time via a truly unified and secure mobile workspace
- New collaboration tools in mobile workplace solutions are designed specifically to boost team collaboration in dispersed workforce settings. A great way to build and maintain that great company culture that will be a big part of your new non-price based value proposition
Boost productivity and enhance a positive workplace culture that supports your value proposition = competitive edge!
Three readily accessible ways that SMEs with a strategic business technology plan can leverage their business technology to level the playing field and complete with best in class! It’s time to get ready to fight fire with business technology gains!
At Maxsum, we are committed to supporting a thriving and innovative SME sector to underpin Australia’s digital success. Talk to us today about how a business technology strategy can get your business on the digital path to real outcomes. Call 1300MAXSUM or contact us today at www.maxsum.com.
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