Overly complicated rarely ends well.
Yet for small and midsize businesses (SMBs) trying to see their way through the digital labyrinth of vendors, social media gurus, mobile musts and dozens of other tech considerations, things can get complicated in a hurry.
So is there hope if you’re an SMB awash in a tide of digital dos and don’ts? There’s always hope.
SAP took on the relatively complicated task of showing SMBs how they can simplify the way they conduct business. SAP and Knowledge@Wharton, the online business analysis journal of the Wharton School of the University of Pennsylvania, put out the results of a survey that considered the impact and importance of simplification. To understand the challenge, SAP and Knowledge@Wharton polled 433 business leaders and team members worldwide about their views on business simplification today—and in the future. Their findings were published in a survey titled “Simplifying the Future of Work Study.”
Among the highlights of the survey: 72 percent said business complexity has hurt efforts to meet process and decision-making goals, and 58 percent said tech complexity adds barriers to achieving goals.
“Business simplification is much more important for SMEs today than it was 10 years ago,” said Rodolpho Cardenuto, president of global partner operations for SAP. “The world is getting more complex. Companies that don’t deal with that complexity today will begin to fail. It may be too late once they decide to deal with it.”
While a global economy has opened opportunities for small businesses to sell to overseas markets, these expanded channels present challenges in logistics, currency translation, taxation, labor regulations and other areas. As SMBs grow with this new economy, they often bolt on software solutions, hardware configurations and new businesses processes. This patchwork of disparate systems can become outdated, unwieldy and difficult to manage.
Tyler Wry, a Wharton professor of management, believes that business and technological complexity can hamstring a company’s prospects if it isn’t addressed appropriately.
“Any time you get more parts moving, there’s more to coordinate. And if you don’t have a sensible plan for how you’re going to integrate these things, they tend to become a little bit unwieldy in practice. So any time you’re going to ratchet up complexity without systems in place to manage those effectively, you run the risk of getting into trouble,” he said.
What’s even worse than trying to manage overly complex systems is the wholesale disregard of new technologies.
EJ Jackson, global head of SAP Anywhere, said that companies still using a basic spreadsheet for recordkeeping may be missing an opportunity to reduce costs or expand capabilities.
SMBs today need three things: access to real-time data; real-time connections to customers, partners and suppliers; and a “connected technology ecosystem” that orchestrates all departments within the entire company. For example, if an item is placed in inventory, the marketing department should automatically know to start promoting it, Jackson said.
“Those are table stakes,” he said. “If you don’t have them, you’re going to struggle to grow and you’re going to be fighting to survive.”
Even a small manufacturer with an old-school production process needs to use technology to connect with suppliers and customers. If you are an organization that becomes perceived as hard to do business with (because you use manual processes and are high-cost), your customers will build that into their pricing, or may turn to your competition if they are easier to work with, Jackson said.
SAP’s Cardenuto offered some advice for businesses that are just now leaping into the digital fray:
“It’s easy to get complex if you don’t think simple first,” he said. “Think and plan from the beginning on how to be simple. If you don’t incorporate that from the very beginning, it’s going to cost you at least twice as much” in the end.
Patrick K. Burke is senior editor of CIO Insight.