Why do many small businesses spend more money on coffee and tea than on their information technology systems?  Working with Dell Computers, I recently moderated an expert Think Tank in Amsterdam covering how small and medium businesses invest in technology for growth. This was an incredibly insightful discussion from owners and managers in all types of small businesses and the challenges that they face.

The panel divided into two segments, on one side those that built their business on technology and a deep understanding of the strategic value of IT, the ways to leverage automation and an understanding of how to buy and operate these systems was a key differentiating advantage for them. On the other side of the discussion were a number of amazingly successful businesses who only used technology superficially within their business.

Undoubtably there are types of business where technology can have a disproportionate effect on the leverage of an SME. David Hatheramani of London based (but international focus) A Suit That Fits depends on technology to reach his clients, to leverage low cost manufacturing in Nepal and to help automate fitting. He is a CEO who understands technology and knows how to create leverage above and beyond his company size. A Suit That Fits now makes more suits than all of the tailors in Saville Row, London put together.  Stéphanie Cardot CEO of TO DO TODAY, a Paris based corporate concierge service is also growing her business at a quite incredible rate but with limited technology leverage. Plainly TO DO TODAY is a great business and Stéphanie recognises that leveraging technology is key to continued growth and increased reach as she is searching for a key new hire, a director of digital marketing.

My key takeaway from the Think Tank is that many small businesses are hamstrung by a lack of understanding of how to leverage IT and how to vision a new way of working that encompasses appropriate use of technology. Many small business owners see all of the technology marketing from vendors but fundamentally fail to understand how to apply these innovations to their business to drive value and leverage. Technology companies and technology consultants are too focussed on products and not focussed enough on solutions. Recent research shows that small and medium businesses are adopting Software as a Service (SaaS) solutions very rapidly. Perhaps this is happening as these have a defined outcome, tend to be business aligned and don’t require lots of scarce technology skills to integrate and exploit.

Small and medium businesses desperately need help and guidance from trusted technology advisors who can bridge the digital divide and deliver business leverage. SMEs will continue to treat technology investments as a cost of doing business rather than a fundamental point of leverage that enables automation, customer interaction and sustainable growth unless this digital divide can be bridged. There is a huge opportunity for smart systems integrators, innovative vendors and a new way of working with SMEs to really accelerate the creation of jobs and value in our communities.