"Ahead of the Curve"

posted Oct 14, 2013, 5:09 PM by Greg Laudeman   [ updated Oct 17, 2013, 6:11 AM ]
The Boston Consulting Group (BCG), with support from Microsoft, provides an insightful report on how small & medium enterprises (SMEs) make use of information technology. The central issue here is how—and whether—IT actually makes SMEs and other organizations more competitive, productive, profitable, etc. This is far from a non-issue. IT investment rarely has clear or certain return. Costs can multiply and benefits can be elusive. You can find BCG's report here.

BCG looked at SMEs in five countries. They found that SMEs:
  • SMEs operate more efficiently via technology, which means more working capital and higher profit margins.
  • Technology-enabled collaboration with customers and employees is critical to being competitive. Technology leaders among SMEs have a broader and more engaged customer base.
  • The cloud (internet-based, distributed computing) allows leading SMEs to be work more flexibly and to scale farther & faster than they could otherwise. It also makes their systems more reliable.
  • Experimentation with business models, to tune the current approach or try something totally new, is much easier with cloud-based systems. 
  • Leading SMEs invest in technology smarter. They invest in a disciplined, focused manner, often by tapping local partners and global experts.
The policy conclusions are reasonably simple, in concept. Be sure SMEs have technology infrastructure and networks services readily available to them. Address concerns about data security and privacy. Nurture local IT ecosystems. Broaden and strengthen the technology skills base. Support interoperability and open standards as means to foster innovation. Reduce government-induced costs related to IT.

These are powerful insights that apply on local and regional, as well as national levels. Indeed, these ideas add up to an effective and relatively low-cost strategy to grow local economies.