New research suggests that SMEs know they could benefit from technology and grow via more of its use.
The problem: they just don't have the time to find out.
That's the assessment at least from interesting new research that suggests growing firms that do manage their time well are 20% more likely to clock up higher growth margins than those that don’t.
The report, commisioned by business software vendor Exact UK and carried out by the Centre for Enterprise and Economic Development Research, shows SMEs with above average levels of operational efficiency – based on 17 different operational functions – not only have greater productivity levels, but may also be “considerably” more successful in terms of achieving sales growth and more optimistic about continuing to do so in the future.
A key part of improving performance levels is through the adoption of new technologies – but many, particularly smaller businesses with 40 employees or fewer, are unable to do so because they are too busy to step back and take stock of existing processes.
The research, which included input from 70 smaller UK firms in manufacturing, professional services and wholesale & distribution, showed 70% of those that consider themselves to have above industry average levels of operational efficiency saw sales figures increase last year, with just 8% experiencing falls.
This compares to just 50% who saw sales figures grow among those with below average levels of operational efficiencies, with nearly a quarter (24%) of them seeing sales decrease.
Furthermore, among the 3% elite group of trailblazers, those SMEs who managed to increase their sales turnover by more than 100% last year, 56% had above industry levels of operational efficiency; none of them had poor operational efficiency levels.
The report shows adoption of new software is “significantly” related to better growth performance, most notably through the use of cloud and mobile technologies. Almost one in five businesses surveyed used cloud solutions, 78% of whom are deemed to be operating at above industry norms.
For Rob Baldock, Principal Researcher at the Centre, “The message from our research is an extremely strong one. Effective time management is of considerable importance in increasing performance capacity and growth, yet less than one quarter of SMEs see it that way," while Lucy Fox, General Manager, Cloud Solutions at Exact UK, added, “What this research proves is the extent to which time management efficiencies can impact on business performance. It shows that the majority of SMEs are focused on growth and many working at full or near capacity to achieve that, but not always focusing those efforts in the most productive way.
“It’s also clear that one quick way for small businesses to make immediate operational efficiencies is to invest in cloud and mobile technologies - with almost 80% of those businesses already doing so performing above their peers for operational efficiency. What’s more, these businesses are also experiencing better growth performance.”