How Small And Midsize Businesses Are Closing The Digital Gap In Middle And Eastern Europe

Rinse Tamsma

Part 5 of “The Road to Live Business” series

When it comes to digital adoption, readiness, and maturity, many regions rise to the top. The United States and Western Europe are considered the center of the world’s digital revolution. The passion and zeal of small and midsize businesses in South Africa, China, India, and Latin America are astounding. However, businesses in Middle and Eastern Europe have long been viewed as trailing in adoption, even though these regions stand to gain the most advantage from transformation into a Live Business.

Rich in history, this part of the world has experienced its share of transformational change – politically, culturally, and economically. In the past, these dynamics disconnected its citizens from the rest of the world; however, the digital economy is beginning to lift that veil. For example, cloud adoption is highest in northwestern Europe and declines in the southeast. With Germany being right in the middle, the country overall had been below the European Union’s average rate in using the cloud while countries south and east of Germany were even further behind.

Thanks to the arrival of new digital platforms, cross-border data flows, borderless connectivity, and e-commerce, a recent IDC report found that some small and midsize businesses across Middle and Eastern Europe are steadily leapfrogging their way across the digital chasm to compete on the same level as the rest of the world.

Digital report card: leaping ahead and becoming more competitive

Worldwide, companies increasingly realize the value of becoming a Live Business as key to their success. The agility rendered by digital technology is empowering firms to deliver services at the moment of need and address potential issues as they emerge and before any risk is realized. To achieve this vision, many businesses are following the five phases of cloud maturity: ad hoc, opportunistic, repeatable, managed, and optimized. Each level enables growth in digital competency as organizations innovate new ways to maximize the benefits of digitization.

For small and midsize businesses in Middle and Eastern Europe, this is certainly just as true. Digital technology is now viewed as an enabler of jumping past early maturity stages and developing a pathway to meet and exceed worldwide growth. Here’s a snapshot of seven Middle and Eastern European nations and how they are positioning themselves ahead of the global average for cloud adoption.

IDC Cloud Adoption and Maturity

Germany

Charging ahead with its vision for the future of manufacturing and its economy, firms are digitizing their processes to lower costs while boosting quality, efficiency, and productivity. Actively pursuing and using cloud technology, companies are going beyond just ad hoc applications, opportunistic innovation, and automation to surpass the world in process management and operational optimization.

Kazakhstan

Ranked #21 in the world by the World Bank Group as one of the best nations in which to start a business, it’s no surprise that the cloud is becoming a favorite platform in Kazakhstan. With the increasing flexibility, scalability, and affordability of cloud technology, companies of all sizes – from a single-person operation to massive conglomerate – can now realize the value of going digital. In fact, firms in ninth-largest country in the world are adopting the technology at a pace that is eclipsing the rest of the world, according to IDC.

Russia

While access to consistent connectivity varies across Russia, there is a movement within the small and midsize businesses community that is beginning to reform that reality. A report by IDC recently revealed that approximately 79% of firms in Russia are actively using and or assessing cloud solutions, compared to 77.8% worldwide. Plus, Russian firms are 30% more likely to reach the optimization stage within 24 months after first using the technology.

Switzerland, Austria, Poland, and Czech Republic

Interestingly, cloud maturity is not trending a pattern from West to East as Germany, Russia, and Kazakhstan continue to lead in this area. Currently, Switzerland, Austria, Poland, and Czech Republic are still lagging behind in maturity. While the reasons vary, one can point to a couple factors that require attention. For example, Austrian and Swiss companies are more likely to focus on agility, time to market, and capital and operational expenditures. Meanwhile, Polish and Czech companies are driven by better access to the global marketplace. Even though these nations still have a considerable amount of work ahead of them, the progress seen in Germany, Kazakhstan, and Russia clearly signals a sea of change for the entire region.

A new era for Middle and Eastern Europe

For small and midsize businesses in Middle and Eastern European especially, this is good news. Since digital technology only accelerates their natural capacity for quick decision making and action to address every customer need, firms can leverage that ability while offering their products and services worldwide without compromising their values, partnerships, and promises along the way.

To learn how your business can become a Live Business, check out Forbes Insights’ recent report “Doing Business In-the-Moment: How SMBs Run Live in the Digital Economy.” Over the next two weeks, we will share additional insights from this research. Be sure to check every Tuesday for new installments to our blog series “The Road to Live Business.” 


Rinse Tamsma

About Rinse Tamsma

Rinse Tamsma is senior vice president of the Global Partner Organization Region Middle and Eastern Europe at SAP.