UK SMEs see digital transformation as a key growth driver

In today’s challenging economic environment SMEs are under increasing pressure to drive growth, while keeping costs at a manageable level and reducing risk exposure. But how exactly are they going about this? We recently conducted a survey investigating their strategies for driving growth, by looking at the key investment priorities of IT and business decision makers within UK SMEs.

The data revealed that almost half of SMEs identify successfully increasing growth as the greatest challenge currently facing their business, followed by budget constraints (38%) and improving profitability (37%). Indeed, the surrounding economic uncertainty is making the vast majority (81%) of SMEs to look for new, smarter ways of working.

Specifically, businesses are increasingly looking to embrace ‘digital’ – an area that’s seen as a key growth driver by UK businesses, as nine in ten (91%) UK SMEs embrace digital transformation. The increased growth of digital transformation initiatives is, in turn, driving higher IT investment – with 78% of business decision makers stating they have increased overall IT spending. The areas with the greatest spend increases are broadly reflective of the wider trends we’re seeing in the technology industry; cloud computing infrastructure, cloud computing applications and information security are the top three areas of spending and focus.

Encouragingly, this investment in cloud computing and security is pushing a stronger focus on Software Asset Management (SAM) as a way to streamline digital investment and minimise associated risks. The data showed that more than a third (36%) of UK SMEs will be updating their SAM processes to reflect their use of cloud computing services. However, further progress does need to be made – almost a quarter of businesses (23%) either don’t currently manage their software assets proactively or don’t know anything about them. This latter point rises to 44% amongst those organisations that are yet to start their digital transformation journeys.

This lack of software asset management and awareness – at a time when going digital is identified as a strategic driver of growth – is concerning. In response, below are several key points and tips on how SAM can support SMEs as they look to successfully and safely evolve:

  • SAM helps you streamline software procurement: SMEs can be hesitant to invest in SAM because today’s technologies and licensing agreements have become overly complex. Figuring out a way to manage it all has been daunting. Yet, effective SAM is vital to enabling IT decision makers to understand what software they’ve got available and where they need to invest. This will help them better handle software portfolio life cycles and improve efficiency in working with their software suppliers. To help battle the complexity, see our SAM Jargon Buster blog.
  • SAM can help you save costs: One of the key benefits of knowing your software assets is that this can help you drive operational savings. Developing and enforcing an effective SAM strategy can help you better understand how you can streamline your licensing agreements with different vendors and eliminate the unnecessary costs arising from inefficient use of software assets across the business. This could result in significant savings in annual software costs — savings that could be reinvested in further digitisation and innovation. For guidance on implementing effective SAM, see our short guide here.
  • SAM can help you mitigate cyber risk: SAM provides business decision makers with more visibility into outdated software or applications which are not fit for purpose due to not being licenced for commercial use. This is important because outdated software, which is not regularly updated, could be an easy target for cyber criminals, exposing your business to cyber security risks. Moreover, businesses that fail to invest in an effective SAM strategy may leave their organisation open to significant legal, financial, and operational risks. To help you get on top of your cyber risks with SAM, visit this article.
  • SAM can enforce strategic planning about your software assets: Many existing efforts to manage software assets have fallen short due to the lack of a strategic approach. Having an effective SAM strategy can provide you with accurate data on all enterprise software purchases and uses and enable you to prioritise the largest and most critical software vendors. This will also provide you with insight into potential software gaps and give you the ammunition to make more informed decisions of software acquisition and what new applications/services you need to deploy.

Using SAM to optimise software spending, deployment, and usage throughout the technology lifecycle is vital to driving cost efficiencies across the business and supporting your digital transformation as a way to foster innovation and growth.

If you’ve any further questions on this, don’t hesitate to get in touch.