Small businesses are perfectly positioned to invent and create solutions that tap into the realm of digital disruption.

According to Gartner 50%of things (IoT) solutions will originate with start-ups that are less than three years old by 2017.The makers , tinkerers and entrepreneurs will be those who come up with definitive and disruptive solutions that will shake markets and redefine how Iota is used ,turning the traditional onto its head and redefining how people consume , use and interact .The small, medium and micro enterprise(SMME) is shifting goal posts and becoming the digital disruptors that transform industry and business.

Disruption can be defined as not just changing the rules, but changing the entire game .It is the introduction of technology, services, solutions and ideas that redefine how an industry acts and transacts and how people use a product or engage with a business. The small business can be seen as disruptive by its very nature, as its very existence is challenging the entrenched player and seeking out new ways to extract value and change the way the system works.

Organisations that have completely disrupted their industry include well-known names like Uber, AirBnB and Snapchat, but the list of businesses that continue to turn the traditional on its head is growing steadily. These SMMEs understand the value of disruptive technology and have harnessed it to achieve the remarkable.

“The Internet of Things and cloud platforms enable disruption in various markets,” says Sameer Deans general manager at Thought Works .New Business models leveraging these solutions are emerging and by their nature, these models are easier to create and evolve for smaller more nimble organisations. There is a need to ideate, create small viable versions and put these into the market to be able to get feedback and then pivot if needed.

Areas such as infinite computing artificial intelligence,3D printing robotics, synthetic biology and nano materials are changing the way businesses and society works. To be effective in the current economy, the business leader needs a new toolkit and way of looking at both strategy and opportunity.

“A disruptive change isn’t just an incremental evolution of an industry it is one that transforms the nature of the products and services on offer as well as the economics of the entire sector,” says Ivan Epstein, chief executive of Sage AAMEA. “The car disrupted the transport industry, for example by replacing the horse and cart. Companies that ride the wave of disruptions can grow market share, be more productive, become more profitable and break down international borders. This is usually the case in very market disruption, going back to the Industrial revolution or the Model T Ford. “

The Gartner report highlights how the smaller business is using technology to address niche issues .real-world challenges that demand a different approach from the norm .SMMEs that are driving digital disruption and change are taking advantage of the fact that technology is now cheaper than ever and they can use low-cost electronics, 3D printing and accessible open-source software to create solutions that are impressively tight and on very limited budgets .

“SMMEs drive innovations out of pure necessity as they need to have a tangible advantage over competitors, “ says Matt Putman, managing director and co-founder of Emerge Mobile. “SMMEs look at obstacles and opportunities in a very different context to how an enterprise with limitless resources will approach the same task. They can build out solutions on affordable and sometimes free, leading edge technology frameworks and tools.”

Open source technology and easy access to information and data from across the globe have placed SMEs onto a new dynamic platform. Here they can compete with the mega-corporates with thousands of employees just by dint of an internet connection and technical expertise. They are able to tap into existing technologies and leapfrog to the next level, effectively sidestepping the traditional barriers to entry.

“Success in an ever-changing technological environment is predominantly about innovation agility and speed says Lance Fanaroff, joint chief executive of Intergr8. Smaller companies have always been able to move quickly , be more agile and flexible and are the fastest with regards to the uptake of innovation . With the advent of IoT and cloud solutions, larger companies are now being forced to change their business models and processes in order to be more agile and faster in their adoption and offering of technologies and services in this new era. “

It is this agility that allows for the SMME to take advantage of shifts in technology and consumer demand and use these to disrupt traditional solutions and industry .AirBnB and Uber for example have shot to international fame by re-looking at the way in which their specific business models are transacted and have ,as a result, completely disrupted local industry .

Uber defines disruption” says Lorraine Steyn, simplifier-in chef of KRS.Its a very exciting time as we see services like Uber, Air BnB and various social media that do not own products or services that they sell but have found that they address a major consumer need by being a better channel .The type of disruption that we are seeing now challenges every business to look at how it transacts with its clients , Consumers have spoken in their millions by adopting services like Uber because they value the better channel –the information on where your taxi is the speed of finding a ride , the cost –effectiveness of the model – and businesses that are not taking note could find themselves discarded like Kodak and other companies that failed to adapt to changes in technology.

The SMME has a very real advantage over the steady, lumbering beast of enterprise in that it can adapt internal processes and ideas as and when required . The lager organisation has to navigate communication channels , approval processes, structures methodologies and workflows that have been put into play as they have grown to ensure the business keeps functioning .

This leads to bureaucratic layers and slower speeds of decision making says Dr Sean Moolman chief executive and co-founder of PowerOptimal. It is very hard to avoid this as companies grow and even the current icons such Facebook and Google have to grapple with this issue .Then there is another problem known as the incumbent’s dilemma which has to do with the timing of introduction disruptive technology. The time when disruptive change is needed is when the incumbent technology is at the top of its game .

The larger the company has to overcome the challenge of adapting quickly to respond to changes in market and industry , but it doesn’t mean they are going to lose out to the SMME. Their resources and capabilities mean they are in a better position to take chances on new solutions and ideas

IoT, including the opportunities for growth it represents, is part of the visions of multinational giants like Apple , Microsoft , Cisco , Intel and the like , says Andre Fourie ,operations manager at Network Alliance .All of these companies have massive research and development budgets and are well known for their innovation which is sure to accelerate at exponential pace over the next few years . The SMME needs to slip into the spaces left behind by the behemoth taking advantage of the fact that the large enterprise takes sometime to turn around while they can shift gears almost instantaneously

“some very big companies are capable of recognising and celebrating internal innovation ,”says Stuart Thomas , Burn Media . They are in effect able to disrupt themselves .However,it is always going to be more difficult for a large organisation to be agile and change tack when necessary .its analogous to the difference between cornering in a Mini and doing so in a 10 tonne truck

The size and structure of the small business relative to the larger enterprise allows for swifter decision making and they have leeway to be more aggressive and proactive taking risks that the enterprise can’t as they have shareholders and investments and boards .That said it doesn’t mean that the SMME can rest on its speedy and agile laurels; the enterprise is as capable of snatching up the solutions and exploring the potential of technology.

To innovate you need to explore the unknown and take a risk says Niel Schoman , chief executive of Vumatel .”You cannot disrupt from safety. Disruption is about turning something on its head and because of the pace at which our world is moving , doing something today means that yesterday it has become obsolete.”

Ethel Nyembe head of small Enterprise at Standard Bank ,agrees : SMMEs should constantly be on the lookout for trends and changes that could affect their Industry .To be truly innovative ,you need to search for opportunities and these changes need to be translated into ideas for new business models , products or brands .” SMMEs can tap into their potential by embracing new ideas and principals that allows them greater flexibility such as staff on demand .They should forge strategic partnerships that allow them to gain access to distribution channels and help them to build networks that allow them access to their target markets .

It is often challenging for the SMME to secure the capital it needs to build their own route to market as the cost per acquisitions through the available independent distribution channels can be very high says Putman. The enterprise is still in a better position to take innovation to market and realise value for it.

To capture digital innovation SMMEs need to be ready to discard ideas if they don’t work and to adopt new technologies and ways of doing things as and when they arise .This flexibility will ensure that the small firm is ready when an opportunity arises.

Large organisations can be successful innovators provided they embrace the right culture and business models,” says Thiru Pillay , managing director , Africa : Consulting, Deloitte . “The modern SMME specifically those in the digital and information space are naturals at this .Both need to leverage technology and ecosystems to the maximum and use the information age to their advantage.”

Mail and Guardian

Tamsin Oxford

28 August 2015