Commentary

Small Business Using Big Tech For Growth

G2Crowd, Releasing Crowd Views, its third quarterly research report, presented by Michael Fauscette, shows that 77% of small businesses in the U.S. are investing in growth in 2017, and 75% reported growth as their main business objective. Technology, in particular the internet, has created a much more level playing field in business, opening up many new opportunities to the small business to compete effectively on a global scale. 

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In 2016, 63% of small businesses reported investing in growth plans and of that investment, 18% invested in software, cloud software and other IT systems, says the report. The technology investment was tied for first along with marketing/advertising and new equipment. Isolating just the businesses that reported focusing on growth, software, cloud software and other technology moves up into number one at 20%, supporting the idea that the use of technology and growth are interrelated, says the report.

Technology-enabled outsourcing, or business process as a service, is another tool for growth-oriented small businesses. 51% indicated that outsourcing is an important part of their business plans. For growth businesses, the average moved up to 56%, while those businesses that were more focused on maintaining the status quo were well below at 36%, says the report.

The most often outsourced functions were reported as payroll and legal (each at 36%) and bookkeeping (31%), says the report. Outsourcing functions that are not core to the principal business frees up resources to support growth plans.

  • The smallest businesses, those with 1-to-25 employees, fell below the average in the use of outsourcing at 42%
  • Conversely, the larger segments were all above average, and the largest segmentation, those with 100-to-250 employees, led with 80% reporting the use of some outsourcing.
  • Outsourcing IT management, which had an average score of 26%, jumped up significantly for the larger segments as well (100-to-250 employees, 58%; and 26-50 employees, 47%). 

The G2 Crowd survey shows that technology is important to small businesses, particularly growth-oriented ones. 40% of the respondents plan to increase IT spending this year, and among the growth-oriented businesses that jumps to 47%.  

As for the types of systems the small businesses used or planned to use, a large number had some form of core IT systems such as accounting, payroll, marketing and CRM. IT systems related to collaboration and work execution, which include team collaboration, project management, and file sync and share/business content management, are being deployed and replaced at a much higher rate.

If this data and the underlying analysis is of interest, the G2 Crowd research team has a report using the survey data, that goes into much more detail. The report, the 3rd edition of the G2 Crowd “Crowd Views” report series, is available for download here.

 

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