But it’s not just these businesses that have directly benefitted from the dawn of the web. The online boom has completely reinvented the scope for traditionally offline businesses too. According to research by management consultancy, McKinsey, the internet was responsible for a fifth of GDP growth in the UK even back in 2011 – and it’s SMEs for which the internet presents the most exciting opportunities.
Sounds obvious, and that’s because it is; the ability to cross global boundaries and reach millions of internet users at the click of a button would undoubtedly have implications – good and bad – for businesses across the board.
In this post, we’ll take a look at the striking impact the internet has had and continues to have on business for enabling efficiency, facilitating business savings and driving innovation from sole traders to SMEs and beyond.
The great leveller
Perhaps one of the most notable features of the internet is its ability to open opportunities for small firms to act like and compete with global companies, through vastly increased reach and more sophisticated capabilities.
Amongst these capabilities are:
- More diverse and scalable customer communications channels
- Scope to find better suppliers
- Recruitment of better talent
- Greater productivity
Combined, these elements of digital business allow even the smallest companies to operate with geographically diversified supply chains and global workforces should there be any call for it. In fact, McKinsey’s research indicates that those businesses which embrace web technologies typically grow more than twice as quickly as those with little internet presence.
So let’s take a look at these in more detail.
More diverse and scalable customer communications channels
The immediacy and reach of social media has completely dissolved some of the communications barriers that previously stumped small businesses. These days, if your business operates a Facebook account, for example, for every one person that ‘likes’ something on your business page, another 90 of their friends could also potentially have eyes on it from their news feed. Likewise, the value of a retweet (Twitter) or +1 (Google Plus) can work in much the same way.
However, to truly harness the marketing power of social media, engagement – the kind of content that prompts likes and shares - is where the focus needs to be.
Scope to find better suppliers
The ability to transcend global boundaries gives rise to a much wider area of exploration for suppliers. Of course, this is not without its difficulties; to succeed, it’s important to be clear on your own needs and focus your search. Using search engines like Google to complete a focussed search will avoid time-wasting sifting through suppliers that aren’t relevant or who won’t be able to supply you with the products that you need.
Once you’ve done this and managed to identify a number of potential suppliers, the internet can help once again, this time to establish which ones are the safest bets. The wealth of information available online makes it possible to research a business’ background to find out when it was established and how many employees it has, as well as uncover any murky secrets from the past.
The convenience and immediacy of the internet means that it’s exponentially easier to deal with companies abroad too, particularly in terms of ordering and inventory management.
Laura Gibson, purchasing manager for global packaging supplier Huhtamaki BCP says:
“The dawn of the internet has enabled us as procurement professionals to make a more strategic contribution to company success. Rather than simply fulfil the traditional role of purchasing, which was essentially a cost-cutting exercise, we are now able to take a more holistic view of the overall market and address more complex business issues, including balancing cash and capital and fuelling expansion into new markets.”
Recruitment of better talent
93 per cent of recruiters are using LinkedIn to discover new talent for their clients and 89 per cent of them had hired through it. This is not some elusive tool that only few can master; on the contrary, it’s a readily available, as yet fairly untapped, resource for anyone to use.
It’s easy to find active job seekers on sites like Reed and Monster.com, but the addition of so many passive candidates on LinkedIn (i.e. those who aren’t actively looking for alternative employment but who may be open to offers) vastly broadens the pool for employers.
In certain industries, the capability to broaden the pool like this is especially important. Companies that have to fill high-demand, niche positions requiring a specific skill-set particularly benefit from being able to source and contact their ideal candidate at the click of a button.
It all started with e-mail, which alone sped business operations up considerably. But these days, emergent concepts such as cloud computing are catapulting workplace productivity into the future.
Software as a Service (SaaS) is one such example. SaaS allows users to access key pieces of software over an internet connection, from things like Word and Excel to more specialist software like HR and sales platforms. What this basically means to businesses is that they no longer need to spend large amounts of money on buying a software product and install it at their premises. Instead, they can access these programs over an internet connection on a ‘pay-as-you-go’ basis.
This is especially important for small businesses, which may struggle to keep up with the wealth of new versions of critical software products that continually appear on the market.
Although updating software can be a costly pursuit, sometimes not implementing these updates can be even more costly. Past a certain point, you often get older versions won’t integrate effectively with the newest ones, and this means that you could end up being unable to communicate effectively with clients – it’s bad for your company image and potentially bad for business.
Over to you
Of course, like any business pursuit, truly embracing new technology can be a costly investment. We want to know what you think; has the digital revolution impacted your business operations? We’re always keen to hear the opinions of UK business people, so let us know what you think via the Aldermore Twitter feed.
For more information about how we support UK businesses with their savings needs , please get in touch to speak to one of the team.
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