In a 2015 Price Waterhouse Coopers (PWC) survey, 88% of global CEOs surveyed said that digital technologies delivered high value in operational efficiency to their organizations, and 84% placed a high priority on analytics and big data investments. Alan D. Wilson, president and CEO of McCormick & Company, was quoted in the survey: “Any company, to survive in the current environment and into the future, has to be on the forefront of technology.”
This is true for companies of all sizes, but it can put smaller companies at a disadvantage. If you head up a small company that competes against large global enterprises, you may turn to cloud-based technologies. Taking advantage of pay-by-subscription or pay-for-use models can spare you from making major investments into on-premises hardware and software–but is that enough?
“We run a very small credit union, and even with the cloud, it is difficult for us to afford becoming an online banking client of a banking software company,” said one West Coast credit union CEO. “We have to find other ways.”
What this small credit union discovered was that there were a number of other small credit unions in the same boat. They had trouble affording even the cloud-based versions of banking software they needed for their operations, so they banded together into a single, larger buying group that had the combined assets and force to secure a subscription to an online banking system that could support all of their operations.
It worked for them, but does it make sense for your company? Here are some of the best opportunities for small companies to share technology.
SEE: Big data policy
1: A core software package everybody needs
Your company might not be able to afford an online subscription to a mission-critical system on its own (like the credit union). But if you can find similar companies in the same situation, there is the option of forming a single buying group and approaching the vendor collectively. The key from the vendor’s standpoint is that they can treat you as one group. But in some cases, there is licensing involved. Vendors may hesitate to allow a group of companies to operate on a single license, seeing it as a lost revenue opportunity compared to selling each individual company a separate license. Some vendors, however, will offer that flexibility.
2: IT staff sharing
In one case, a financial services company had a senior networking pro and another had a senior application developer. Nether could afford both positions–so they came together and agreed to share the IT staff since their network and application needs were similar and they were located in the same geographic region.
3: Resource sharing in an IaaS environment
In other cases, small companies–even when they are in different industries–still require similar storage and server resources. If they go to an IaaS (infrastructure-as-a-service) vendor in the cloud, they can try teaming up so they are a larger buying group. This can improve their chances for negotiating better prices and terms with the vendor.
4: Compliance and legal sharing
Small companies in compliance-heavy industries like healthcare, insurance, and finance can often cost-share by going together on attorney or legal compliance services to assist them in policy development and regulatory compliance for IT and other areas.
5: Vendor influence
Small companies, for the most part, buy off-the-shelf software. However, like larger companies, they also have custom needs. If your company is very small, you may not have much influence with a major vendor if you want a product enhancement or a new product feature. But if you join together with other small companies that are clients with similar interests, you might muster sufficient impact to influence the vendor so you can all get what you need.
In a highly competitive economy, technology enablement often determines your ability to get ahead. Small companies may benefit from finding common ground with others in the acquisition of technology. Not every vendor supports a cooperative technology sharing arrangement, but certainly some do. The key is identifying those vendors that are amenable to a group-funded technology investment–and a compatible set of small company business partners that share your vision.