Whatever the precise definition of a small to medium-sized enterprise (and opinions vary) most people will visualize an SME as a company of a few dozen to a few hundred employees that is not yet operating at a national or multinational scale. Its needs, however, are not so very different from larger enterprises. Like those large organizations, SMEs often have extensive support requirements, not least in IT and communications to keep its premises, assets and employees connected.
Where SMEs differ is largely in the budget they can call upon and the influence they have over vendors. Put simply, SMEs usually have less to spend with their suppliers, and therefore less influence in terms of price negotiation and deliverability. The large enterprise can demand a bespoke solution and drive a hard bargain in terms of price, while the SME is more likely to be buying ‘off the peg.’ However, SMEs may be even more attuned to value and competitive offers.
SMEs also typically have fewer IT skills and less appetite for hands-on management of IT solutions and platforms. They simply want things to work — but also to be sufficiently configurable that they can be shaped to their own business needs.
As businesses, however, SMEs ‘anatomical elements’ — the structure that supports and sustains them — can be remarkably similar to large enterprises. SMEs need to manage their customers, fulfill customer orders and fully monetize the propositions they bring to market. They need to do this in ways that are commercially effective, operationally efficient and give their customers the best possible experience.
When it comes to payments, for businesses of all sizes, cash has largely disappeared. Electronic payments are ever-faster and increasingly contactless. Even street vendors prefer secure, trackable, reportable digital payments. How these anatomical elements perform and interact, and how fit they are for purpose, is critical to the efficiency and competitiveness of an SME. But how have they changed as the SME has moved from analog to digital?
It’s no exaggeration to say that the anatomy of the SME has had a digital makeover. From flabby, inert and cumbersome to lean, agile, responsive and consuming fewer resources, the anatomy of competitive SME is ‘ring ready’. Importantly, this is the scenario that the telco has to play into.
The SME that has a substantially virtual relationship with its customers expects the same from its suppliers. It wants to understand:
Selling to SMEs means selling to customers that have considerably toughened up and slimmed down over recent years and have adapted their own technology and processes to meet the expectations of their customers and maximize their tight operational margins. Many are working in highly competitive spaces and have a keen understanding of what their customers need. They will choose suppliers that are similarly attuned and are willing to look beyond conventional suppliers to find a better and more competitive experience.
Many telcos have indeed taken steps to improve their digital engagement capability — often in ways that have proven commercially effective and operationally efficient. For the most part, this has happened in the consumer space, where many telcos have developed a strong relationship with consumers through brands and platforms dedicated to market segments perceived as digitally-receptive (i.e. younger consumers).
Now, however, the time has come to carry that experience into the long-neglected SME space. Simply making consumer offers to SMEs isn’t good enough, and the bespoke approach that often works for larger enterprises isn’t commercially viable for smaller businesses. Telcos must shape propositions to SMEs that are likely to include multi-network (fixed and mobile) access, higher-value premium services and cloud-based IT options, are easily adaptable to multiple users and locations and so on — and deliver it in a way that is both agile and digitally accessible by SME customers to maximize the experience and value and minimize the operational cost.
The digital SME is lean, mean and demanding of its suppliers — but it is likely to spend more with those that meet its exacting requirements. Can telcos step up, before they lose this market to hyperscale competitors?