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As SMEs need to get digital, flexibility is the only route

Article by Jane Dickinson, digital Skills Lead at Open University

If the pandemic taught us anything, it is that no business – regardless of its size – can grow and thrive without ensuring it has digital expertise within its workforce. As the country was locked down, ecommerce became the default sales channel for companies operating in all walks of life, and even previously reticent web users and shoppers were won over as online became the essential channel to use.

And digital expertise is not limited to ecommerce – from online accounting tools to customer relationship management (CRM), technology can speed up processes, automate mundane tasks, introduce rigour and free human hours for more important tasks. Consequently, there are two areas business leaders looking to future-proof their companies must focus on right now: investing in the technology if they have not already; and ensuring that they and their teams are fully trained to get the most out of that investment.

Part of the motivation for this survey was finding out more about the process of tech adoption in SMEs, where we already know that they find it more challenging than their larger counterparts. For instance, while 62% of large UK firms use customer relationship management (CRM) tools, only 26% of small (10-49 employees) businesses do. It may be understandable given their budget and time constraints, but as SMEs and micros make up 99% of the UK’s business population, their success is vital to the business health of the UK.

There are some worrying statistics when it comes to digital understanding and use within small to medium sized organisations. For a start, the value of technology isn’t apparent to all business leaders – only 39% see it as having a positive impact on increasing efficiency, 31% on revenue and 27% on profit margin. One fifth (21%) of all business leaders don’t think adopting technology could have a positive impact on their business at all.

And as mentioned earlier, the most common barriers to digital technology adoption are time and money. One third of business leaders (30%) consider digital tools to be too expensive and 16% were put off by the time needed to train staff.

From our research, we identified a significant skills gap both at leadership level and below. Fewer than a quarter of business leaders (23%) think they have all the necessary technical skills to successfully adopt and implement technology and only a third (33%) believe they have all the leadership and management skills needed. When asked about their employees, only a third of leaders (31%) think their teams have all the basic digital skills needed, falling to 19% for both advanced digital skills and technical understanding, and to 20% for leadership and management.

But some leaders are yet to react in terms of improving this position. Only half (50%) of leaders who felt their employees lacked skills in these areas have either a formal or loose plan to address the skills gap in the next 12 months.

And addressing the skills gap is absolutely what is needed, and this is where flexibility is paramount. What stands out in our research is just how big the challenge of training and development in this area is – there are multiple complexities as business leaders feel their own skills are lacking, as well as those of their employees. That said, the pandemic has made business leaders more likely to invest in digital skills development, both for themselves and their employees.

To increase successful digital adoption, business leaders must be able to access support – be that advice on what to invest in or specific training and development – that makes the process easier and increases technological confidence. And that support must come in a form that best meets their needs.

When asked about the most beneficial training for themselves, business leaders prioritised online dip-in dip-out (29%), online regular learning (24%) and a mix of in-person and online (21%). The most useful training for their employees follows a similar pattern, but on-the-job is much more popular at 21%.

While apprenticeships and other work-based learning or shadowing are less popular for leaders themselves, they are seen as more likely avenues of learning for employees (11% and 15% respectively).

We believe that flexibility is key now more than ever – as pioneers of distance learning to fit study around people’s lives, we know the importance of a learning environment for all levels that can adapt for all requirements. By using blended and online learning, we help apprentices fit their 20% off-the-job learning around the needs of their role and personal commitments, for instance. This makes apprenticeships a particularly good option for busy SMEs.

Similarly, the government announced its new programme Help to Grow: Digital in the March 2021 budget. It addresses the cost of adopting three key technologies (digital accounting, e-commerce and CRM systems) with proven links to better productivity, by providing a voucher for up to £5,000 that can be used by businesses (5-249 employees) to offset the purchase costs by up to 50%.

From ecommerce to CRM, accounting to enterprise resource planning (ERP) software, technology can improve firm-level productivity, with the knock-on impact on nationwide productivity. It will be central to the UK’s ability to emerge from this pandemic strong and growing. The CBI has estimated that firms adopting key technologies could add £100bn to UK gross value added (GVA).

Our research has shown that while many business leaders recognise the value of upskilling to effectively embrace digital tools, there is still more to do. We must all work together to find effective, flexible learning options to maximise the uptake of training and learner confidence.

I would recommend three specific priorities for SME business leaders: adopt an attitude of continuous learning to increase resilience and expertise in your company; embrace a digital culture as adopting technology is not a one-off event but rather needs to be embedded in your company’s DNA; and recognise the importance of a varied skillset – the digital journey requires leadership and management skills as well as digital skills.

A new report from The Open University (OU) and Be the Business entitled Skills for success: Supporting business leaders with digital adoption, interrogates both these factors as we researched opinions among SMEs. The research involved surveying 1,500 directors of SMEs from across the UK, listening to the experiences of businesses which have needed to make drastic changes to adapt to the challenges presented by the pandemic.

    Jane is the Digital Skills Lead at The Open University. Working with various teams across the University, Jane is passionate about creating digital skills solutions to help organisations develop their digital talent. Most recently, Jane has created a number of digital retraining programmes, which aim to bridge skills gaps and enable individuals to access in demand

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