TECH TALK: BILL MAGEE
Larger companies could ease cost pressures by following the SME sector’s digital transition
It’s a kind of a given that Scotland needs more Skyscanners to help boost its credentials, not to mention perception, as a place with a digital ecosystem capable of global reach. The good news is that SMEs are thinking big, with ambitions to be the next wave of ‘unicorns’. This time it’s the bigger companies that are proving to be the laggards.
New research shows that smaller companies are stealing a cyber march over much larger and often more cumbersome enterprises by accelerating their take-up of new technologies and, in the process, win new business.
Many larger commercial entities, in both the private and public sectors, are encouraged to become nimbler. But McKinsey & Company reports that despite significant “interest and investment”, automation has yet to deliver a fully digitised process for many bigger organisations.
The global management consultant has discovered starkly different approaches as significant numbers of bigger enterprises struggle to move at a necessary digital pace.
Such a move is especially needed at a time of global economic uncertainties, UK inflation at a 40-year-high and predictions of a recession around the corner.
Big businesses need to recognise there are real digital options available to ease them through these concerns.
Such smart technologies include multi-cloud platforms and the now widely accepted capability to “work from anywhere”. There’s lots of outside IT guidance and expertise to hand to ensure a smooth digital transformation.
Only then will they see lower procurement costs, greater savings and more opportunities to pursue new sources of value from within an organisation. Not to mention their very survival.
McKinsey says that by taking advantage of such digital offerings SMEs are seeing a significant improvement in commercial efficiencies, leading to lower costs and extending their reach into new markets.
Industry benchmarks suggest most large organisations could, by digitising across the board, recover 3-4% of their overall external spend, mainly by clawing back excessive transaction costs and inefficiencies. This could provide a vital cushion as economic headwinds gather across all industries.
Deloitte reports chief financial officers expect interest rates to almost double to 2.5% by June 2023 and warns this is leading to a sharp rise in financing costs and credit more costly than at any time in the last decade.
Amid such uncertainties, there should be some good cut price digital deals out there…