The Technology Evolution Driving Small Business Innovation
With over two decades of experience in the tech industry, the managing director of accounting software company, Xero, has watched how software has changed the world – making connections, disrupting markets, re-shaping industries and creating endless possibilities for small businesses
After 25 years in tech, I’ve seen how software has evolved, driving massive efficiencies in global economies and launching some of the largest and most valuable companies in history.
While software still has a way to go, it has managed to completely change the way we work. And for small businesses in particular, this tech explosion is being used to their advantage.
Isolation to collaboration
In its early form, software was something you installed on your clunky PC, which made you, as an individual, more productive. The 80s was all about spreadsheets and word processing documents where people worked in isolation and computers were not connected – to a network or otherwise.
Teams then started using technology to work together. Hardware became more affordable in the 90s and computers could be networked together, enabling printing and files sharing to take place between users. As teams collaborated on email and instant messenger services, the software industry pivoted to become more about improving team efficiency.
Companies then realised they could use tech to be more productive and tech firms soon embarked on changing the way companies operate. Companies like Salesforce came onto the scene with massive CRM and ERP platforms that streamlined entire operations – a productivity boon.
Disruption and ‘super-convergence’
Apps arrived in the new millennium, driving software Consumerisation. Driven by cloud technology, big data and mobile saturation, companies begin creating software that connects people and cuts out intermediaries, completely changing traditional services.
In this new era of software, emerging generations of integrated software platforms are capable of supporting different economic and service models at scale – disrupting and transforming entire industries.
The explosion of web and mobile software in 2015, together with dramatic progress in the deployment of web services, brings us to a kind of super-convergence where it is now feasible to either replicate, dis-intermediate or just plain transform entire industries through software.
You don’t have to look far to see examples of this, with Uber, Spotify or Airbnb dominating their markets. Yet, for these businesses to thrive, the conditions have to be right – there needed to be a combination of the Internet, cloud technology and high levels of smartphone adoption.
So what does this mean for small businesses?
Customers and business insight at your fingertips
Ecommerce is no longer a luxury and size doesn’t matter – for the vast majority it’s a vital part of any successful business strategy. And for small businesses in particular, the widespread adoption of mobile devices has created an enormous shift.
You can find and engage with new customers with an online presence and access your business applications anywhere and anytime using the cloud, making your business lithe, flexible and putting you one step ahead.
The bottom line of any business’s health is the health of the bottom line: research we conducted last year that looked into the success and failure of small businesses found that a whopping 65% blamed financial issues.
Technological innovation in business means that today business owners can have instant transparency of their finances, using technology that makes the numbers simple to understand.
When looking at the transformation of the wider industry, fascinating things are taking place in financial tech. Institutions are striving to keep up with innovative competitors as the financial web continues to develop, while tech-savvy banks and non-bank companies like Paypal, Stripe, Square, Moula and Kabbage eat into traditional banking markets.
Real-time financial data is critical for modern business success, and as small businesses are more agile and quicker to adapt, they have the power to shape the future of modern business as the financial technology sector continues to transform.
An unavoidable impact
The influence of software is no longer constrained to individuals, teams or companies. No industry is immune from the effects of digital transformation and we’re likely to see a prolonged adjustment period of a decade or two where various industries are either upturned or significantly re-wired.
It’s not all going to be smooth sailing for the industry disruptors either as Uber’s difficulty in France last year proved – some industries are stitched so tightly into the fabric of society that they won’t give up without a fight.
Although there will of course be bumps in the road, the last 25 years of tech have been a necessary preamble to the real software revolution. Redefining entire sectors is what’s happening now, and with Artificial Intelligence and robotics turning machines into humans, where we go from here is going to get even more interesting, for businesses of all sizes.
Gary Turner is UK managing director at Xero.
Are you an accountant or bookkeeper and keen to help your clients use technology to drive innovation? Sign up to attend Xerocon London 2016, Xero’s annual conference in London on the 9 -10 February to be inspired by an impressive lineup of speakers at a landmark cloud accounting event.