Simplifying Small And Midsize Enterprises To Boost Growth

Liz Martin

As small and midsize enterprises (SMEs) expand, they often add new systems and procedures to get by, but over time these setups slow down growth. In the past, SMEs were able to struggle along with outdated methods. In today’s fast-paced global economy, complicated systems are fatal to SMEs. And businesses are not just battling internal inefficiencies in their own firms. SMEs in the United States now compete with their counterparts from all over the world. In the new digital economy, SMEs need to overcome complexities to grow and prosper.

SMEs must focus on creating a simplified, streamlined business process that scales well into the future. This is easier said than done. It is much easier to add complexity than to simplify operations. Rodolpho Cardenuto, president of global partner operations at SAP, says, “The world is getting more complex. Companies who don’t deal with that complexity today will begin to fail. It may be too late once they decide to deal with it.” Simplification must be at the core of an SME’s growth strategy.

Growth is critical for an SME’s survival, but it adds new challenges and responsibilities. For instance, when a firm expands to new states, territories, and countries, it faces a myriad of legal, tax, regulatory, and operational requirements. The key to meeting these challenges is to use the advantages provided by cutting-edge technology, not outmoded systems. Untangling the web of current business systems and procedures is not always easy, but it is the key to unlocking growth.

When a business is first established, its staff is small. Every employee knows the customers well, and they use satisfactory software systems for order fulfillment. As the popularity of the business grows and it begins to expand, legacy software hinders success. It’s not uncommon for CEOs and managers to run the entire firm on a series of spreadsheets that interact with disparate software programs tracking a myriad of business functions. But this method is unwieldy, cumbersome, and counterproductive to the success of the company. Since the systems are home-grown, executives are stuck training new personnel instead of focusing on the growth and scalability of the business.

Working in an on-demand world where customers expect immediate results, legacy systems are often too slow to respond. In many industries, new companies with superior technology are beating established firms. These companies are nimble and fast, able to make quick decisions about inventory, sales, and marketing because their software systems provide actionable data. Suppliers, partners, and clients are all connected, allowing the business to see at a glance what decisions need to be made in real time.

Can SMEs adapt to the challenges of a digital world? One company featured in the Knowledge@Wharton whitepaper “Simplifying Small Businesses and Midsize Companies to Unlock Growth” was able to vastly simplify its production, sales ordering, material planning, and procurement methods. Visual Communications Co., a firm that makes light pipes and various lighting products, chose a cloud solution to manage its entire business. The company accessed the solution through a web browser. It was simple, fast, mobile and always up-to-date. The result was revenue growth of more than 300 percent over two years.

It’s easy to get too complex, and it’s hard to simplify. But the urgency to do so is stronger than ever. Our interconnected, rapidly changing world demands better technology and systems built around simplification. Learn more about how simplified systems are making companies faster and more profitable in the Knowledge@Wharton whitepaper Simplifying Small Businesses and Midsize Companies to Unlock Growth.


About Liz Martin

Liz Martin is a Senior Director, Global Channel Marketing at SAP. A proven technology marketing leader in partner strategy, demand generation and business development, she focuses on the Small and Midsize Enterprise (SME) market.