Sanjeev Aggarwal's Blog

December 16, 2013

SMB Group Top 10 SMB Technology Trends For 2014!

Here are SMB Group’s Top 10 SMB Technology Trends for 2014! A more detailed description of each follows below.

  1. Progressive SMBs Use Technology as a Game Changer
  2. Cloud Adoption Accelerates, But SMBs Steer Clear of Dark Clouds
  3. Mobile Management Becomes a Priority as SMB Mobile App Use Soars
  4. Social Media Marketing Stalls as SMBs Re-focus Marketing Practices
  5. SMBs View Payment Systems in a New Light
  6. SMBs Prepare for the Insight Economy
  7. SMBs Integrate to Gain Higher Solution Value
  8. The Affordable Care Act Puts Workforce Management in the SMB Spotlight
  9. It’s Easy for SMBs to Go Green and Save Green
  10. Make Way for an SMB Influencer Shake-Up

2014 Top 10 SMB Technology Trends in Detail

  1. Progressive SMBs Use Technology as a Game Changer. Technology continues to fuel changes in what, where, and how SMB (small and medium businesses, with 1 to 999 employees) work gets done. Back in 2011, SMB Group identified the “Progressive” SMB segment. Progressive SMBs invest more in technology-based solutions, view technology as a business enabler, and are much more likely to expect revenue growth than other SMBs. This gap continues to widen as we enter 2014, and is further fueled by generational shifts–including the rise of millennials in the workforce and older exiles from the corporate world. Progressive SMBs are blending technology and business savvy to reshape business models, carve out new market niches and invent entirely new businesses. Their adoption of cloud, mobile, social and analytics will soar as they strive for both growth and agility. They will also increasingly turn to technology-fueled services—from Elance and oDesk for staffing, to shared office space and IT infrastructure services—in pursuit of these goals. As they forge ahead, they will not only continue to outpace peers, but reshape what it means to be an SMB.
  2. Cloud Adoption Accelerates, But SMBs Steer Clear of Dark Clouds. SMBs have bought into the cloud promise: a faster, easier, cheaper and less risky route to get the IT solutions they need to create and run their businesses. SMB Group research shows SMB use of cloud business and infrastructure applications poised to grow to from 33% to 44% over the coming year. However, some cloud vendors—threatened by Wall Street and high churn rates—have backtracked on their original faster, easier, cheaper cloud pledge. They have replaced monthly subscription pricing with annual contracts, tacked on added fees for all but the most basic support, and created pricing models that are almost as confusing as those of the traditional software behemoths they once berated. As SMBs push further into the cloud, they will favor vendors that stay true to the original cloud promise, and steer clear of dark clouds.
  3. Mobile Management Becomes a Priority as SMB Mobile App Use Soars. SMBs have been adopting mobile solutions at a fast and furious pace. SMB Group research indicates 67% of SMBs now view mobile solutions and services as “critical” to their businesses. 83% have already deployed mobile apps to help improve employee productivity; 55% are using mobile apps for specific business functions, such as CRM or order entry. 49% of SMBs are building mobile-friendly websites, and/or deploying mobile apps to engage and transact with customers. However, mobile management has failed to keep pace with this explosion, and with SMBs’ increasing business reliance on mobile solutions. Concerns about security, manageability, provisioning and cost will make mobile management a top priority for more SMBs. They will be looking for easy-to-deploy, cost-effective mobile device and application management platforms and solutions to reduce management headaches and get more value from their mobile investments.
  4. Social Media Marketing Stalls as SMBs Re-focus Marketing Practices.  Many SMBs now “get” that they need a social media presence. SMB Group research reveals that more than half of small businesses and more than two-thirds of medium businesses use social media for marketing purposes. Some have invested tremendous amounts of energy to create content to feed the voracious social media beast. But the ever-increasing pressure to create fresh content, keep up with changes in users’ social network preferences, and uncertainty about the return on social investments is taking its toll. In 2014, SMBs will focus more on what networks and content really click for their target audiences, and put more time into figuring out how to convert social connections into customers. Some will integrate social more tightly with sales, marketing and content management applications, and use analytics to develop more actionable social metrics. Marketing innovators will explore new opportunities, such as online mobile advertising powered by geolocation. Others will redirect some of their efforts back to marketing basics–including surveys, competitive analysis, email marketing and attending more conferences and events. 
  5. SMBs View Payment Systems in a New Light. SMB Group research shows that although checks and credit cards are still the top forms of payment SMBs accept, there’s no question that new payment methods are growing in use and importance. 27% of small businesses and 43% of medium businesses already equip employees with mobile payment processing solutions, and about one-quarter of SMBs intend to add this capability over the coming year. Meanwhile, mobile wallets and gift cards, PayPal and even Dwolla—a payment network that allows any business or person to send, request and accept money for very low fees—will continue to provide additional payment options for consumers. More SMBs will recognize that having the capability to accept and process a broader range of payment methods can help them attract more customers, gain new business, and even enter new markets. SMBs will also seek ways to cut time and errors out of payment processing with payment solutions that integrate with accounting and ERP, such as those offered by Intuit and Sage. 
  6. SMBs Prepare for the Insight Economy.  It’s been hard for many SMBs to relate to the “big data” story that most vendors have been pitching. SMB Group research reveals that only about 18% of small, and about 57% of medium businesses utilize business intelligence and analytics solutions. However, SMBs understand the value of getting the information they need, when they need it—especially as they try to compete with new, nimble born-on-the-Web startups that view data as the new business capital. In 2014, SMB-focused vendors will retool the big data story for the little guy, focusing less on zettabytes, speeds and feeds, and more on how their solutions enable and empower better insights and decision-making. Business solutions vendors will embed better and more accessible analytics and reporting tools within their solutions. Cloud-based, visualization and scenario-driven business intelligence and analytics solutions will also help SMBs take a more data-driven approach to running their businesses. 
  7. SMBs Integrate to Gain Higher Solution Value. While the cloud has made it easy for businesses to add a lot of new applications, integration has often been an afterthought. As a result, many SMBs are struggling to make sense of disconnected information silos, and IT is under pressure to integrate cloud-to-on-premises solutions, as well as cloud-to-cloud solutions. In 2013, integration moved up from the #4 to the #1 technology challenge for medium businesses. In 2014, we expect that integration will be a higher priority even among small businesses. After all, it doesn’t take too many disconnected applications to feel the pain of productivity drains, errors, and a lack of solid data to support decision-making. Fortunately, technology vendors of all stripes are emphasizing the importance of a unified, reliable data store as the foundation for solid analytics and reporting. Business solution vendors are increasingly offering SMBs pre-integrated suites, opening up their application programming interfaces (APIs), and creating marketplaces to make it easy to find integrated partner apps. This makes it easier for SMBs to start small, with just one or two applications, and then snap in added functionality as needed. Finally, vendors that specialize in integration solutions, such as Informatica, Scribe and Dell Boomi (just to name a few), are making their solutions more accessible to SMBs. Integration still isn’t sexy, but the improved productivity, time savings, error reduction and decision-making benefits that it enables are. 
  8. The Affordable Care Act Puts Workforce Management in the SMB Spotlight. Revenue growth, attracting new customers and increasing profitability are perennial goals for SMBs.  To help achieve these goals, they have been steadily moving ahead to automate and integrate sales, marketing and other customer-facing solutions. Although improving employee productivity has also been a top goal, SMB adoption of automated, integrated workforce management solutions has lagged behind other areas. Many SMBs continue to limp along with a patchwork of disconnected solutions and manual tracking to manage components such as time and attendance, payroll, scheduling, HR and benefits.  But with the Affordable Care Act set to take effect on January 1, 2015 for organizations with more than 50 full-time equivalent (FTE) employees, that situation is about to change. Worried about uncertainty, costs and regulatory risks, SMBs will look for better solutions to calculate employee eligibility and benefits, and to develop proactive strategies to manage ACA compliance and costs. This will drive a significant uptick of interest in, and adoption of automated, integrated workforce management solutions. 
  9. It’s Easy for SMBs to Go Green and Save Green. The push for greener IT solutions isn’t new, but in 2014, we’re moving into a perfect green storm. Due to a rash of hurricanes, tornadoes and extreme weather, the sustainability of Mother Earth is taking center stage. According to a recent Harris Poll, over 74% of American adults believe in the global warming theory, and over 73% of U.S. citizens approve of the Kyoto agreement requiring countries to limit carbon monoxide and greenhouse gas emissions. IT vendors are prepared to capitalize on this opportunity with new, energy saving products. From Dell’s Dell PowerEdge VRTX applications and storage server, which runs on standard 100V-240V AC power and doesn’t require any specialized cooling, to IBM’s patent for a “green” button that helps cloud providers “greenify” their businesses and lets customers choose whether or not to tap clean energy to run offsite servers, it’s easier than ever for SMBs to be green and save green. 
  10. Make Way for an SMB Influencer Shake-Up. SMB Group research shows that in-house IT still plays a key role in all phases of the technology solution decision-making process. But now, enabled by the cloud and the swipe of a credit card, business decision-makers are much more involved: in small businesses, 69% of owners/presidents help evaluate potential solutions, and 81% help make the final decision. In medium businesses, departmental and line-of-business executives are the most likely personnel to identify the need for new solutions. This is changing the influencer landscape. Business decision-makers aren’t as likely to turn to traditional technology guidance sources as IT decision-makers. And many of us—especially millennials—are growing skeptical of traditional media sources that increasingly push paid “native content” in the guise of news. So who will the new influencers be? Accountants and other professional advisors (for line-of-business or industry) that the SMBs have an established relationship with will become more powerful influencers. Digital word-of-mouth, references, trade associations and non-technical groups and organizations will play an increasingly important role in shaping technology purchase decisions among both business and IT professionals. Finally, technology vendors that provide unbiased education—and can clearly demonstrate how business benefits from their solutions—will have a decided advantage over those that don’t.

About SMB GROUP

SMB Group focuses exclusively on researching and analyzing the highly fragmented “SMB market”—which is comprised of many smaller, more discrete markets. Within the SMB market, SMB Group areas of focus include: Emerging Technologies, Cloud Computing, Managed Services, Business and Marketing Applications, Collaboration and Social Media Solutions, IT Infrastructure Management and Services and Green IT.

November 27, 2012

Report Card: 2012 Top 10 SMB Technology Market Predictions

–by Laurie McCabe and Sanjeev Aggarwal, SMB Group

Before developing our 2013 predictions, we wanted to assess how we did on our 2012 Top 10 SMB Technology Predictions. Here’s our take–please let us know what grades you would have given us!

And stay tuned for our Top 10 SMB Technology Predictions for 2013, which we will post in a couple of weeks!

Note: On this grading scale, 5 means that we came closest to hitting the mark, and 1 means we missed it entirely.

Prediction Score

Comments

  1. Economic Anxiety Lowers SMB Revenue Expectations and Tightens Tech Wallets
4 Year-over-year data from our annual SMB Routes to Market Studies
indicated that more small and medium businesses (SMBs)* were forecasting flat or decreased IT spending heading into 2012 compared to 2011. Given SMB budget constraints and the plethora of solutions aimed at SMBs, vendors had to work harder to convince budget-constrained SMBs that their solutions would really help address top SMB business challenges to attract new customers, grow revenues and maintain profitability. More SMBs turned to lower-risk, pay-as-you-go cloud options, and several vendors (IBM, Dell and HP, to name a few) introduced new and/or enhanced financing options to help SMBs overcome financial hurdles.
  1. The SMB Progressive Class Gains Ground
5 We identified a distinct category of SMBs that we termed “Progressive SMBs,” who see technology as integral to achieving business goals and to gaining a competitive edge. Progressive SMBs invest more and purchase more sophisticated solutions than their counterparts. Trending analysis from our 2011 to 2012 Routes to Market Studies show that the percentage of SMBs in the Progressive category is growing. Furthermore, Progressive SMBs continue to gain ground over SMBs that skimp on technology in terms of expected business performance.
  1. The SMB Social Media Divide Grows
5 SMB adoption of social media did indeed jump, from 44% to 53% among small businesses (and from 52% to 63% among medium businesses from 2011 to 2012, based on trending analysis in our SMB Social Business Studies. The divide between social media haves and have-nots is also growing: our research reveals that 65% of SMBs that use social business tools anticipate revenue gains, while only 17% of “non-social” SMBs expect revenues to increase.
  1. Cloud Becomes the New Normal
4 SMBs haven’t swapped out all of their on-premises solutions in favor of the cloud–but the puck is clearly moving to the cloud in all application areas. The evolution is continuing at a steady pace, as evidenced by trending analysis in our annual SMB Routes to Market Studies. In some areas, cloud is poised to overtake on-premises solutions. For instance, over 30% of SMBs that purchased or upgraded collaboration, marketing automation, BI and data backup in the past 24 months chose cloud, and over 40% of SMBs planning to purchase solutions in those areas in the next month plan cloud deployments.
  1. Mobile Application Use Extends Beyond Email to Business Applications
5 SMBs significantly ramped up mobile business application use and plans in 2012, as evidenced by trending analysis from our annual SMB Mobile Solutions Studies. More SMBs are providing mobile business apps to employees in categories ranging from CRM to time management to expense reporting. In addition, adoption of external-facing (for customers, partners and suppliers) mobile apps and websites also rose considerably. For instance, SMB use of a mobile-friendly website is up 10% among small businesses and 23% among medium businesses.
  1. Increased SMB Business Intelligence (BI) and Analytics Investments Are Sparked by the Social-Mobile-Cloud Triumvirate
3 The avalanche of data generated by cloud, social and mobile has certainly created the need for better analytics. However, year-over year trending data from our SMB Routes to Market Studies reveals a mixed bag in terms of adoption. Use of BI solutions among medium businesses spiked 24% in the past year, but adoption rose just 2% among small businesses. While vendors appear to be doing a good job of developing and marketing BI solutions tailored to the needs of medium businesses, they have not yet figured out the right formula for smaller ones.
  1. Managed Services Meet Mobile
5 We forecast that the explosion of mobile devices and apps, “bring your own device” (BYOD) phenomenon and the increasing concerns about security would spark increased demand for and more solutions to manage mobile on the back-end. Our annual SMB Mobile Solutions Studies show that SMB adoption of mobile management services—from simple device management to comprehensive mobile management platforms—has accelerated rapidly. For instance, 16% of SMBs have already deployed an outsourced mobile management platform, and 30% plan to do so within a year.
  1. The Accidental Entrepreneur Spikes Demand for No-Employee Small Business Solutions
5 Small businesses without a payroll make up more than 70% of America’s 27 million companies. We hypothesized that the 2008 recession and subsequent layoffs generated a new and often “accidental” breed of entrepreneurs that would spike demand for—and growth of—applications targeted to meet the needs of these businesses. And they have. New and improved cloud-based and mobile apps from traditional small business powerhouses (Sage, Intuit, Microsoft, Google, etc.), SOHO pioneers (Freshbooks, Nimble, Dropbox, Zoho, etc.), and freelance talent sourcing solutions from companies such as Elance and oDesk are making it easier than ever for SOHOs to get their work done.
  1. Increased Adoption of Collaboration and Communication Services in Integrated Suites
4 Trending from our Routes to Market Study Medium businesses shows that overall, use and plans to deploy collaboration solutions is up year-over-year. Low-cost, low-risk, cloud-based collaboration and communications services have made it easier for SMBs to use integrated collaboration tools, while eliminating the inconvenience of using multiple sign-ons and interfaces.
The fact that vendors are integrating more into their offerings—such as Google integrating Google+ hangouts, IBM SmartCloud Engage adding social communities and Citrix adding video capabilities to GoToMeeting—doesn’t hurt either.
  1. The IT Channel Continues to Shape-Shift.
5 Cloud, social and mobile trends continue to reshape how channel partners must deliver value across the board. SMBs are increasingly choosing to purchase directly from software and cloud vendors in most areas. And Managed Service Providers (MSPs) have gained ground as a purchase channel over VARs in several solution areas, including security, BI and collaboration. The need for more specialized business and/or technology expertise has also made some types of channel players more relevant in each specific solution category than others.

*In SMB Group Syndicated Survey studies, we define small businesses as those with 1-99 employees, and medium businesses as having 100-999 employees.

For more information on our most recent SMB Mobile, Social Business and Routes to Market Studies, please visit our website, www.smb-gr.com, or contact Sanjeev Aggarwal, Sanjeev.aggarwal@smb-gr.com, 508-410-3562.


February 6, 2012

Swimming with the Smarter Customer: The Speedo International Story

—by Laurie McCabe, SMB Group, in partnership with Brent Leary, CRM Essentials

Recently, Brent Leary and I had the opportunity to talk with Gareth Beer, Ecommerce Manager for Speedo International and learn about how Speedo International is applying smarter commerce philosophies and solutions to better serve its customers. We think Beer’s insights about Speedo’s experience in this area illustrate how important it is for a company to start with a strong vision for delivering a great customer experience–and how to execute to make that vision a reality.

Start with the Customer

Anyone that’s ever been near a pool let alone belonged to a swim team knows the iconic Speedo swimwear brand. But, we do need to supply a bit more background to put this post in context for our discussion.

Speedo International is a subsidiary of Pentland Brands with headquarters and about 200 employees based in Nottingham, UK, and operations around the globe and sales in 180 countries. Up until 2008, Speedo International had been a traditional wholesale business, with retailers serving as its sole sales outlet to customers. The company had no desire to compete with its retail partners, but consumers were clamoring for better access to the full range of Speedo products, in all sizes and colors–which they couldn’t always find in their local stores.

Bringing Speedo International online was an obvious solution to providing customers with better access, but Speedo faced a dilemma common to many companies in this position–the threat of potential channel conflict. But as Beer told us, “Speedo understands that many customers will use the site to search, browse and add to the cart and ultimately buy at a local store.” Speedo’s goal is to give customers a place to search, browse and find information–and then purchase the product wherever they choose.

Zero in on Objectives

In line with these goals, Speedo International needed to create a site with detailed photos, images, descriptions, fitting guides, FAQs and videos of all Speedo products; the ability to purchase; and customer feedback mechanisms. Speedo had a jump-start because Pentland, its parent company, was already running IBM WebSphere Commerce for all of its companies, making this platform the natural choice for Speedo.

So Speedo’s ecommerce team got busy figuring out what analytics capabilities they wanted. They were looking for a solution that “would let us go to another level of thinking, beyond looking at visitors and traffic. We wanted to really understand the customer, how they behave, how they think and how they liked to be interacted with, so that we could optimize marketing, retention and recruitment,” according to Beer. The company also wanted the flexibility to gather and analyze new sources of information as requirements evolved.

After investigating different solutions, Speedo International selected IBM’s Coremetrics for several reasons. First, Coremetrics was available as subscription-based cloud service, and pre-integrated with WebSphere Commerce, which meant that Speedo didn’t need to spend time on technical implementation and integration.

More important, Beer advised us, was that “all the data is in one place and we have a common interface across the 12 Coremetrics modules we use. Other vendors have similar tools, but with Coremetrics, we get the different capabilities we need, from measuring the effectiveness of pay-per-click campaigns to creating personalized interactions with top customers.

Create a Virtuous Cycle

Some of the many ways Speedo uses Coremetrics are to:

  • Track KPIs for sales, orders, visitors, stock and margins, and its consumer index score, which rates customer experience with Speedo.
  • Gauge the effectiveness of pay per click campaigns and retargeting efforts.
  • Get a clear view of who the customer is, how they behave, and how they like to be spoken to.
  • Set and meet service level agreements to pick, pack and dispatch orders.

As a result, Beer’s team can deliver feedback to business decision makers more rapidly. “We can quickly pick up on trends, what’s working, what’s not, what colors and styles people like or don’t like. Then the business can make better commercial decisions faster,” Beer told us.

Using the Coremetrics Lifecycle module, Speedo also gains a complete view of its top customers, which enables it to do things such as offer more personal attention and rewards, and encourage them to post more ratings and reviews. In turn, this gives Speedo more data to feed back to the business, turn top customers into advocates, and generate more business.

Speedo International has held fast to its pledge not to compete with its retailers on price. However, about 15% of Speedo’s customers pay a premium to buy on the Speedo site. Speedo’s research indicates that these customers buy on direct because of the exceptional customer service experience that Speedo delivers–facilitated to a large extent by WebSphere Commerce and Coremetrics.

A Work in Progress

Speedo International launched a Facebook page about 18 months ago. It uses Coremetrics to make sure that Facebook information jives with information on its estore, and to track how many people go to the estore from Facebook. Speedo can append Facebook images, URLs, etc. with tags which feed into Coremetrics. Using these tags, Speedo can also create special product offers, or have people vote on colors on Facebook, and see how many people come to the estore as a result of these campaigns.

One of the most compelling parts of Speedo’s strategy that Beer discussed with us is to “put any Speedo store on top of WebSphere Commerce, and have one place underneath as a common foundation for all stock and inventory management.” In 2012, Speedo plans to launch a new Facebook store, a new mobile store and create stores in key European countries with localized content, currency and language. The unified WebSphere Commerce foundation will ensure consistency and continuity of the customer shopping experience across these different sites.

Summing Up

Beer summed up his perspective by saying “the business is all about the customer. We need to be in as many channels as customers are in and align them as closely as we can–whether the customer is on smart phone, iPad or in a brick and mortar store. The goal is to have consistency and visibility across these channels and heighten our understanding of the customer.”

We couldn’t have said it better.

This is the fourth of a six-part series by SMB Group and CRM Essentials that examines the evolution of the smarter customer and smarter commerce, and IBM’s Smarter Commerce solutions.

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