For 5 years, I have been researching the impact of digitalisation on SMEs. I recently completed this research and summarized the relevant results in the context of SMEs for my four priorities of agility, leadership, work models and workplace IT. I would like to explain them in a compact way below.
Major differences between SMEs and large enterprises
Before I dive, however, I would like to mention that I only want to explain relevant content to SMEs. To this end, I would like to briefly highlight the main differences between SMEs and large enterprises.
The entire German business landscape is dominated by small and medium-sized enterprises (99.3% of all enterprises are SMEs in Germany), which are an important pillar of the German economy due to their innovative capacity and experience. According to the EU definition (IfM Bonn 2018), SMEs are divided into three categories:
- Micro-enterprises (up to 9 MA and 2 million euros in sales)
- Small businesses (up to 49 MA and 10 million euros in sales)
- Medium-sized enterprises (up to 249 MA and 50 million sales)
It turns out that large companies often have more budget and that change support is often provided by a dedicated focus team. In SMEs, on the other hand, money is often scarce and employees have to do the change work in addition to day-to-day business. Large companies also have the opportunity to purchase consultancy services which are of little use in SMEs due to the low budget.
SMEs often have a much higher orientation towards day-to-day business, as this generates revenue and profit. This also means that there are few internal issues. (Example: Large companies have a data protection department – SMEs often only have data protection officers who carry out this activity in addition to day-to-day business).
Due to the often short connection to the managing director (especially for owner-managed companies), decisions are often made quickly and implemented. The focus is often on a hands-on approach (fast and pragmatic). In large companies, on the other hand, there is more of a strategy depending on the current board of directors, which has to coordinate with many bodies.
Agility in SMEs
This focus focuses on investigating agility in the organization of enterprises. Agility is used in this focus as an organization’s ability to provide fast response speed and increased flexibility in a competitive environment. Particular emphasis is made on the relationship between agility in an organisation and the degree of digitization, e.g. the introduction and process support through modern technology. I have examined the topic in more detail with 2 group discussions.
It turns out that increased agility in organizations helps to implement new forms of digitization more effectively, but technology helps to increase agility. SMEs have often been considered far more agile than large companies since their inception and make decisions very quickly. This makes it easier to use technology more purposefully due to low guidelines, and curiosity about novelties is often higher. Agile methods often become relevant when SMEs grow in order to maintain the guild’s agility
Results in a nutshell:
- The introduction of agile methods is often an important issue in the growth of SMEs. Since its inception, SMEs have been more agile than large companies since its inception due to its small size and short decision-making paths.
- The constructive use of technology often calls for a reorganization of business processes. These changes in the organisation could often be implemented more quickly in SMEs due to the short decision-making paths and small process landscape, according to the group discussions of the research work.
- According to the group discussions of the research work, SMEs have a higher curiosity of employees to use new technology and working methods due to the greater freedom and often unconscious own agility.
Leadership in SMEs
The discussion about leadership in general is complex and complex. The spectrum ranges from a discussion on leadership methods or the personality of the manager to the possible support of managers through artificial intelligence. I have concentrated on personal operational leadership as attitude and traits.
In SMEs in particular, more freedom is often offered and managers are much more appreciative than in large companies. This is shown by a comparison of my survey of 66 managers from SMEs and large companies. SMEs are also more open to trying out new work concepts due to the shortage of skilled workers. The participants in my group discussion show that it is a clear difference to be an executive in an SME than in a large company.
Results in a nutshell:
- Managers from the Surveyed SMEs in research with a focus on knowledge-intensive services have a higher preference for leadership on an equal footing, speed of decision-making and delegation.
- According to the research survey, SMEs have significantly more younger employees and rely more on a variety of traditional and new working concepts, which are mainly to be implemented by managers in SMEs.
Working models in SMEs
The current discussion about work in the context of digitization in literature is complex and complex. The spectrum ranges from concepts such as trust working hours, teleworking and home office models to the effects of new technological possibilities on work and the health consequences of work models for employees.
I’ve explored new virtual work models like home office and mobile work. It turns out that SMEs often implement the models much faster than large companies because of the just-do-it mentality. This is even often implemented without checking the exact legal requirements. There is a high basis of trust.
Furthermore, SMEs like to use the flexibility in decision-making to give skilled workers individual home office agreements so that they work in the SME in the long term and do not switch to corporations. Concerns arise in expensive open spaces or office concepts, which are often too expensive.
Results in a nutshell:
- For the implementation of new forms of work, the approval of remote work and the relaxation of core times in the group discussions of the research work are recommended. Currently, home office or mobile work is approved in SMEs, but is often accepted on a trust basis without fully knowing the legal guidelines. Such authorisations can often be implemented faster in SMEs with shorter decision-making channels than in large enterprises.
- In summary, there is a consensus among the group discussions of the research work that there are no direct models in SMEs with a focus on knowledge-intensive services, but that each employee will receive individual passages in the employment contract.
- There are clear concerns in the group discussions of research in SMEs regarding the design of new office concepts. These are often associated with a costly new building. However, opportunities for SMEs with a focus on knowledge-intensive services are to convert existing areas.
Workplace IT in SMEs
The current discussion about the workplace in companies in the context of digitalization in literature is complex and complex. I focus on the current and essential hardware and software equipment of the workplace in companies.
It turns out that SMEs often still have quite central and low IT. IT is often expanded gradually and cautiously. There are also few resources for the implementation of digitalization, as there is a high focus on day-to-day business. Digitisation often means overtime.
Furthermore, SMEs are increasingly making an effort to promote digitalisation constructively and cost-effectively. The goal is to become faster and more flexible. SMEs are clearly building on it, especially in the direction of workplace IT. However, the interest does not focus on large ERP systems or AI, but on standard processes such as time recording, invoicing, communication and task management. Partly for many SMEs also about the creation of a homepage or setting up a web shop. Full automation is often not useful for SMEs due to the low process runs, which is why partial automation/tool support is almost always sought.
Results in a nutshell:
- The research survey shows that SMEs with a focus on knowledge-intensive services often find more centralised and less flexible IT, which is being gradually and cautiously expanded. This is due to the fact that digitalisation projects in SMEs are often implemented alongside day-to-day business and are therefore an additional burden.
- SMEs are making significantly more use of technology than they were a few years ago, hoping for new opportunities, e.g. to respond more quickly and flexibly to customer requirements, according to the research survey.
- Software can automate, among other things, specific processes and work steps, which can lead to a permanent cost minimization. Full automation is often not useful for SMEs due to the few process runs. According to the survey, the majority of the focus is therefore on standard processes such as invoicing time recording, according to the results of the group discussions of the research work.
The aim of my research is to investigate the impact of digitisation on SMEs with knowledge-intensive services. I have done this in line with four priorities. The key statements can serve as recommendations for practitioners. From a scientific perspective, the results provide new insights into the impact of digitisation of SMEs with a focus on knowledge-intensive services and expand the current state of knowledge.
It turns out that the purchase of technology is significantly higher and that the demand for IT in SMEs is significantly higher than it was a few years ago. THE IT equipment is often central and low due to the lower IT needs in the past and the low budget of SMEs. Technology must now be introduced cheaply and purposefully in order to maintain agility and stability in a meaningful way.
A key point around the new virtual working methods will be the linking of the tools. Examples include the introduction of chat systems, video conferencing, document management systems, ERP, Jira and digital time tracking. In addition to a sensible combination of the individual components, this also entails a certain operational effort through maintenance and license management, which should be taken into account in the following, so that technology does not increase the frustration but the desire of the employees to work agilely and virtually.Lesen Sie mehr dazu.
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