Capterra, the leading online resource for business software buyers, released findings from its latest survey of more than 700 small and mid-size business leaders across vertical markets to understand how they manage technology investments, and the technologies they consider necessary for business now and in the future. The survey results highlight the strong appetite among SMB leaders to use the latest technology but with equal concern about making the right investment decision.
“Small businesses are in a precarious position: They must find and deploy technology that will keep them competitive against their peers and large enterprises,” said Lauren Maffeo, Senior Content Analyst at Capterra. “Companies that wait five to seven years to adopt a new technology may never catch up to competitors that started sooner. Yet, small businesses have minimal margin for error when choosing the best technologies for their business needs.”
Technology is widely regarded among SMB leaders as a competitive advantage as well as a business challenge. Almost half of survey respondents (47 percent) factor technology trends and advancements into their strategic planning. For the second year in a row, choosing the right technology for their business is deemed a top business challenge among SMB leaders, with 19 percent saying it is their No. 1 challenge. In addition, one third of survey respondents said they are “solely responsible” for making technology purchasing decisions at their organizations.
“One of the biggest threats in the small business leader’s buying journey is making a technology investment decision in isolation,” adds Maffeo. “Shopping in a silo can prevent leadership from understanding what it takes for teams to get new technology up and running. They may not have the time, resources, or patience to adequately research and compare options. Small business leaders who make decisions alone may also lack expertise in the technologies they’re buying and have organizational ‘blind spots.’ All of these factors make communication with colleagues and industry peers essential during the buying process.”
Understanding the factors that contribute to these risks and opportunities is an important part of determining the right business strategy. These, along with insights into small business leaders’ sentiment towards today’s trending technologies, are revealed in Capterra’s latest survey:
Despite Consumer Demand, Small Businesses Hesitate to Invest in Chatbots
Chatbots, or conversational user interfaces, are becoming increasingly popular thanks to the personalized experiences they offer consumers. In fact, nearly 65 percent of U.S. millennials say they want to use chatbots when engaging with brands. However, less than 30 percent of small businesses in vertical segments such as Retail, Services, Construction, and Manufacturing are incorporating chatbots. Banking and Financial Services leads in chatbot adoption with 35 percent of SMB leaders indicating they are deploying chatbots. This presents a significant gap – and potential lost business opportunity – for SMBs that don’t invest in chatbots technology.
Small Businesses are Overlooking Benefits of AI to Support Business Functions
AI continues to be the definition of hype for small businesses. Capterra’s survey found that fewer than one in five small business leaders use AI, yet many more acknowledge that it’s critical for their businesses. This mindset puts small businesses at risk of not investing in cloud software that incorporates AI. Small businesses should prioritize AI-enabled software when choosing among options for functions such as accounting, communication, CRM, and file storage and collaboration.
Small Business Leaders Are Investing in Digital Marketing and the IoT, But Don’t Yet Recognize Their Full Value
More than half of SMBs surveyed use digital marketing today. However, their perception of how essential it is to their business is much lower in every segment, minus Retail. This is because digital marketing is a term so broad that it can mean everything and nothing. Digital marketing is an evolving segment thanks to advancements in AI and analytics. Software features like sentiment analysis can help small business leaders tailor their marketing strategies based on audience segmentation.
Similarly, 47 percent of leaders surveyed say they’re currently using the IoT, yet only one in three (34 percent) say the IoT is critical for them to do business. In addition, more than one in five respondents (21 percent) have business staff handle their IT matters, which likely includes managing or supporting IoT solutions. This scenario introduces risk to small businesses since the IoT leverages business and customer data. It thus must be handled carefully from a breach and privacy perspective. Before making any IoT investments, business leaders must establish plans for IoT governance, data ownership and ethics, security, and architecture. Investments in the IoT will fail without a foundation to build on.