SMBs and mid-sized businesses represent the vast number of entities in the US, but technology vendors tend to focus more on enterprises, especially those with a global footprint. This is to the detriment of the smaller business, which face the exact same challenges, but struggle to realize these benefits. There’s a market opportunity in this struggle – if vendors can recognize and respond to it.
With today’s technologies being so complex, along with their quick evolution, smaller businesses lack the resources of enterprises and their IT departments to deploy them to keep pace and stay competitive. Cloud-based platforms like UCaaS and CCaaS can be easier to deploy than premises-based versions, but there’s more to it than just migrating to the cloud. The term “adoption” is widely used in this context, and it’s an oversimplification for what smaller businesses really need when trying to modernize their technology.
Whether it’s UCaaS, CCaaS or CPaaS, vendors need to recognize how the approach with smaller businesses needs to be different, and for them, modernization is more involved than a plug-and-play point solution. Their need for these technologies may be no different than large enterprises, and for vendors to truly become trusted partners, their approach should be one based on the entire lifecycle rather than just selling a solution.
A lifecycle-based approach reflects the fact that small business will need different types of support all along the way – before buying, during the purchase and afterwards. Small business leaders may not have the mindset for all this, especially if all they’ve done is purchase legacy, premises-based technology. To make that process more comfortable, technology vendors need to recognize their challenges around technology modernization, and support them across the full lifecycle. To illustrate, here are three challenges that small and medium-sized businesses will need to address as they “adopt” new technology.
The First Challenge: Managing Complexity
For smaller businesses still rooted in legacy technology, there are many layers of complexity to consider with newer technologies. While most vendors have moved on from legacy-based offerings, many SMB customers are still using them, and have enough technical expertise to keep them going. However, that expertise may not translate well for cloud-based offerings, and it most certainly will not translate for the more recent AI-based variations.
These bridges must be crossed for any meaningful form of modernization, and the lack of familiarity with cloud and AI will makes things even more complex than they are on their own. Furthermore, complexity doesn’t just apply to the underlying technology, but across the entire lifecycle. Consider the pre-purchase phase of modernizing. How can they evaluate the vendors who are selling solutions based on technology they don’t natively understand? Being Opex-based, SaaS offerings have different pricing and consumption models than legacy offerings.
Then consider the deployment complexities once deciding to move ahead. How will these new technologies interwork with what’s been in use for many years, even decades? What skills will technical personnel need to manage this modernization? Will they need re-training, or better yet to bring in new resources who already have the expertise?
In cases where all this is new, these various complexities can lead buyers to make bad decisions, or even to abandon adoption altogether. Without the right support from vendors, they may feel overwhelmed by all this complexity, and choose to stay with what they have – and know – and simply muddle on. All of this can be managed by vendors who understand the nature of these complexities, and can address them at each stage of the adoption lifecycle. This requires a more hands-on approach than simply having the customer check a series of boxes to make the sale, then leaving them to manage the complexity on their own.
The Second Challenge: Managing the speed of change
Complexity alone can be a major barrier for technology modernization, but the speed with which today’s technologies are changing adds another layer for smaller businesses to manage. While businesses of all sizes must manage this reality, smaller businesses don’t have the resources of enterprises to keep pace with the rapid rate of technological changes.
This is another case where long-standing legacy expertise poses a challenge for modernization. That expertise is tied to a time when technology evolved relatively slowly, and for telecom in particular, there was hardly any change for decades. The static nature of legacy telephony meant that IT could manage things with a fixed knowledge base, but that approach does not align with today’s digital technology, which is in a constant state of evolution. Not only will adopting new technology require learning about new things that are critical for the business, but IT will also need to embrace a mindset of continuous learning to stay current.
In some regards, migrating to the cloud mitigates this challenge, since applications are updated as a matter of course. This may be true, but not all updates are created equal, as they don’t always happen smoothly or in a timely manner. Cloud platforms are not fully interoperable, and they have varying degrees of capability for integrating with legacy systems.
Much of this is familiar territory for large enterprises, as their cloud migrations have been going for many years now. They may have adapted to the pace of change by now for cloud, but AI is more recent, and the rate of change here is on a level never seen before. Smaller businesses may still be on the learning curve for cloud, but they will not be ready what AI is bringing now – and this will likely be the new normal for years to come.
As such, small businesses will need a lot of support to make sure the pace of change doesn’t overwhelm their ability to modernize. With their challenge being limited resources to have the right expertise in place, vendors are well-positioned here to support them. They can apply best practices from larger enterprise customers to provide the right training, not just for technical and IT staff to implement new things, but also for employees, who need to adapt as end users.
Again, thinking about lifecycle, vendors can also help IT leaders work with senior leadership – often owners – to set proper expectations around managing the pace of change. When that pace can be effectively managed, competitive advantage can be created, creating an even stronger rationale for technology modernization.
The Third Challenge: Managing the ROI
This could be the biggest challenge of all for small business leaders. Aside from needing to understand how to adapt to new technologies, they must also build the business case for spending on them. Unlike legacy telephony, which required significant capital outlay but infrequent upgrades, today’s communications technologies are constantly evolving, and being software-based, they are not capital-intensive. These differences present a fundamentally different set of criteria for making investment decisions.
All forms of modernization come with a cost, and that’s very much part of the lifecycle that IT leaders must consider. To justify the investment, they need to look at the bigger picture in terms of the benefits across the entire business, and it’s not just about adopting new technology. This is where today’s technologies become more strategic, such as how UCaaS makes productivity and team work better, and how CCaaS enables better forms of customer service.
For smaller businesses still entrenched with legacy technology, their frame of reference could well be based on when they purchased their last phone system. That technology was viewed in utilitarian terms – simply to provide telephony for the business, with a clearly-defined ROI tied to a physical asset. This is a key challenge that vendors need to address, as IT leaders will need to think differently about what modernization means – and costs – in today’s digital, cloud-based world.
The ”adoption” of new technology is just as much about the business model as the technology itself. For the reasons stated above – complexity and constant change – owning the technology no longer carries the weight it did with premises-based technology. Communications tools today are almost entirely software-based and cloud-based, and with that, legacy concepts about ROI and TCO need to be rethought.
While the subscription-based SaaS model has an ongoing cost, the business value comes from the ongoing innovation that comes with today’s technologies. This is where vendors need to show SMBs how the ROI here isn’t tied to a physical asset with a finite lifespan. Rather, it’s a lifecycle ROI, where the value grows continuously, as ongoing innovation ensures that the business can keep pace with the changing needs of its employees and customers.
Conclusion
Each end of the market has different needs, and requires a different approach to be successful. What works for enterprises won’t work for SMBs, even though the underlying technologies in the offerings are essentially the same. The needs of smaller businesses have always been different from enterprises, and some vendors have learned how to serve them very well. Leading examples include GoTo, Ooma, Sangoma, and Zoho.
Vendors must understand the challenges faced by SMBs not just to stay competitive, but also for adopting new technology. Small business leaders may be lacking the expertise needed to deploy new technology, as well as what’s really involved compared to what they’ve previously done with legacy technology. The sheer size of the small business market makes it attractive to any technology vendor, but success will not come simply with better or cheaper offerings. Only by addressing the unique customer challenges outlined herein can a vendor help these businesses truly adopt these much-needed new technologies.
This post is written on behalf of BCStrategies, an industry resource for enterprises, vendors, system integrators, and anyone interested in the growing business communications arena. A supplier of objective information on business communications, BCStrategies is supported by an alliance of leading communication industry advisors, analysts, and consultants who have worked in the various segments of the dynamic business communications market.
