Helping SMEs go digital

Helping SMEs Go Digital
Exploring a Multi-Trillion Dollar
Opportunity
Camille Mendler
Alexander Harrowell
Hwee Xian Tan
Webinar: January 2017

Ovum | TMT intelligence | informa2 Copyright © Informa PLC
 Introducing the team
 Defining the SME universe
 The realities of going digital
 Investment priorities
 Takeaways
Agenda

Camille Mendler
Practice Leader
Focus areas: Segmentation and targeting, go-to-
market strategy, digital engagement, cloud services
Alex Harrowell
Senior Analyst
Focus areas: 5G, open source, SDN, APIs, Internet
infrastructure, cloud, operator business models
Hwee Xian Tan
Senior Analyst
Focus areas: UC&C, e-commerce, enterprise mobility,
managed services, vendor strategy
SoHo and SME research: Ovum’s dedicated team
Ovum’s Enterprise Services
Supergroup
Practices
• SoHo and SME Services
• Large Enterprise Services
• Workspace Services
• Network and Cloud Services
• Internet of Things
Collaborating across teams
and geographies.

It’s time to look at the B2B market from the right way up
Micro / SoHo
(including self employed)
Small
Medium
• 99% of businesses
• 2/3rds of jobs (formal)
• 80% of jobs (informal)
Large
Globally, the bulk of job creation comes from businesses with fewer than 100 employees.
The rise of the freelance economy is also rebalancing employment demographics.

Small businesses are triggering big investments and strategy shifts
Acquisitions to extend reach into the SME universe will accelerate in 2017.

One size does not fit all to target the small business universe
Segmenting the local ‘SME’ universe is a key task. Decide which personas to address.
Solopreneur
SoHo
SME
Industry
specialist
Startup
Family
firm
“Consumer Up”
Supersize consumer offers
(eg: more, faster, safer)
“Business Accelerator”
Bundle ICT with business
and financial services
What is an ‘SME’?
“Divide and Conquer”
Maximize ICT wallet share
in target verticals with
curated service clusters
“Winner Takes All”
Incentivize pooled
group usage across
consumer and business

Digital is transforming SMEs
41%
14%
73%
10%
Have IT staff Buy external IT support
2013
Small Medium
60%
39%
87%
33%
Have IT staff Buy external IT support
2016
Small Medium
n=514 n=1,012 Source: Ovum
Note: Western European SMEs.
Beware claims that digital makes life easier for SMEs – today it’s making it more complex.

Becoming digital is a struggle that many are losing
Almost half of the world’s smaller businesses say that they are digitally ‘illiterate’.
39% 40%
43% 44% 46% 47% 47% 49% 50%
53% 53% 55% 56%
59% 59%
SoHos and SMEs: Lack of digital skills
has harmed our business
N=4,633
Source: Ovum 2016 SoHo and SME Insights Survey
% of respondents agreeing

SME ICT investment patterns are evolving
Nine out of 10 believe technology can make their business more competitive – but almost
half don’t know how to exploit it.
• Globally, 52% will spend more on cloud
• One in five will reduce fixed services expenditure
• 47% will spend more on mobile services
Medium-sized businesses are the biggest spenders on cloud
One in five will grow their cloud budget by more than 10%

Three hotspots for SME investment
As reliance on digital transactions, engagement and analytics tools grows so will need for
better security over digital assets.
E-commerce & POS
IoT
Customer engagement
62% considering CRM
47% considering marketing automation
61% considering a form of tracking
58% would consider a telco for
energy tracking
35% can take payment on their website
51% would consider a telco for help to set
up an online store
N = 4,633

Trust comes with guidance
Power in the ICT ecosystem is shifting to those who can lend a guiding hand.
0%
20%
40%
60%
80%
Accountant Web/search/
media
Trade
association
Colleagues Operator Local tech
reseller
IT
consultant/SI
Who do you trust for
business and technology advice?
SoHo SME
N = 1,721 Western European respondents.
Top 2 criticisms of
telcos
Failure (or
unwillingness):
- to educate or
provide advice
- to understand
their
clients’
business
processes
IT consultant/SI
Operator
Colleagues
Accountant Web/search/
media
Local tech
reseller
Trade
association

0%
5%
10%
15%
20%
25%
Go to its store Talk to its call center Meet at our office Go to its website Visit a local reseller
SoHos SMEs
Customer engagement strategy will determine success or failure
N = 4633 . Note: Showing answers for 'very often.'
Go to
its website
Meet
at our office
Go to
its store
Visit
local reseller
Talk to
its call center
Omni-channel interaction is mandatory – but digital journey management is an art that
few have mastered to engage successfully with smaller businesses.
How do you usually buy from your main communications service provider?

New work contexts are also new channels to market
Ideas
Exchange
Public
Library
Daycare
Center
Ladies
Only
Social
Club
Reinvent learning
space for the young
and middle aged.
Make it easier
for female
entrepreneurs
to thrive.
Build a
community
that’s cooler
than a workplace.
Support
bartering of
skills and
knowledge.
Malaysia Singapore Singapore Indonesia
Example: Co-working facilities
Co-working offers much more than a rented desk and Internet access. These facilities can
also showcase new ideas and services.

WHAT
Use the right blend of
physical and virtual
channels
HOW
- Apply the relevant
channel segmentation
- Explore non traditional
channels
- Rethink inside sales
WHAT
Bridge the digital skills
gap between small and
large businesses
HOW
- Offer strategic support,
not just break fix
- Industrialize key support
processes
WHAT
Craft integrated
propositions that
overcome silos to address
specific SME needs
HOW
- Move to solution selling
- Create bundles across
product silos
- Incentivize capture of
maximum ICT wallet
share
WHAT
Identify friction points
that impair efficiency and
business growth
HOW
- Apply relevant business
segmentation
- Address different
personas in the workforce
- Consider productivity
potential of people and
Things
ICT suppliers to SMEs: Recommendations for 2017
Empower Simplify SupportEngage

Ovum’s SoHo and SME Services: How we can work with you
Research (planned)
 Navigating the Multi-Trillion Dollar SME
Opportunity: From Solopreneurs to the
Mid-market
 Revolution in the Channel: The New SME
Ecosystem
 IoT for SMEs: Quick Wins
 Small business UC: Regional Perspectives
 SME Success Hacks: The Role of Inside
Sales
 Virtualization and the Bundle
 Meet the Secret SoHos: Segment
Spotlights: (Lawyers, Farmers, Retailers)
 Freelance Economy: Coworking diversifies
 Security for SMEs
Client interaction
Inquiries
Webinars
Strategy Sessions
Custom consulting
Primary
SoHo and SMEs Insights: Digital demand perspectives
across developed and growth economies
Forecasts
Consistent segmentation for SoHos and SMEs across
core cloud, UC, broadband service clusters
Trackers
Cloud/ICT services for SMEs
New subject matter exploration
Channels to market / sales engagement
E-commerce
Digital marketing
SME mass verticals
Best practice case studies

Further resources
Watch the full ‘Helping SMEs go Digital’ webinar
Ovum Webinars and Upcoming events
Sign up to our newsletter
@Ovum
Ovum

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