Nitesh Singh | Managing Director | Communications, Media and Technology | Accenture Africa | mail me |
Small and Medium Enterprises (SMEs) play a significant role in the global economy and offer an untapped opportunity for Communications Service Providers (CSPs).
As they emerge from the pandemic, SMEs have been spending more across a range of technologies, with spending on IT and digital services set to increase by 7.6% CAGR to reach $1.7 trillion by 2026. Some areas of high growth include new ways to engage customers, workplace and hybrid working solutions, and enhanced security services.
CSPs need to understand what SMEs are specifically looking for and create the offers and solutions that meet their distinct needs. However, there is a gap between what SMEs need and want, challenging CSPs to re-evaluate their approach to this market.
What SMEs want
Over two years, we conducted regional and global surveys on SME needs and expectations.
Here’s what we found:
- SMEs have made a decisive leap to digital but need the support and tools to make this switch as successful as possible. These include cloud-based services, support for secure remote working and digital customer engagement.
- They want local support with the ability to get problems fixed quickly with accountable providers who can provide continuous post-sales support.
- Despite most SMEs buying IT and digital services from two or more vendors, they ideally want a single provider to meet their full needs.
- SMEs are looking for pre-bundled solutions that will meet their business needs. They want a personalised shopping experience that guides and supports them every step of the way and makes it simple for even the least tech-savvy to achieve their desired business goals.
- Finally, while not ranking as the most ‘tech savvy’, SMEs increasingly use advanced cloud and security solutions. They will continue to augment and improve their solutions over time to complement their needs with as-a-service business applications.
CSPs must shift from linear sales models to build and orchestrate an ecosystem business model that gathers relevant partners and SMEs together.
SMEs’ needs are diverse, and no single provider can meet them. Therefore, CSPs should assemble and market the appropriate hardware, software, and service providers in a platform-based model. This will enable them to better explore untapped use cases and growth areas in the SME segment and increase value for themselves and every participant joining the ecosystem.
Overcoming barriers on the SME-led path to growth
CSPs face the challenge of limited investment capacity due to mandatory rising network costs and hesitancy to move forward at scale.
To address this, CSPs need to take three steps:
- Create a digital sales experience for SMEs that matches how consumers shop digital channels today. By selling online, CSPs can generate returns on their transformational investments at scale.
- CSPs can re-acquire direct ownership of the SME customer relationship by managing and controlling the customer experience, reducing reliance on third-party agents and creating a better experience for SME customers.
- Support SME customers with intelligent servicing and post-sale support services. Virtual reality could enable SMEs to self-serve even complex solution bundles supported by CSPs’ virtual technicians and agents.
Suppose they can successfully address these three areas. In that case, CSPs should be able to take advantage of the opportunities that SMEs offer and create the new marketplaces that will deliver the next generation of SME solutions – and a rich seam of profitable growth.
Here is a practical example. Telkom SME, a prominent South Africa-based telecommunications provider division, partnered with us to launch a user-friendly e-commerce site. The goal was to make it easy for SMEs to buy and sell their products and services and tap into advice to help build their businesses. We worked with SMEs to design and build a digital experience that makes creating a mini storefront simple, uploading a company logo and contact details, and communicating and transacting with customers. The online marketplace, Yep! is named after the popular South African phrase “yep” and incorporates UX from familiar apps like WhatsApp.
The way forward
CSPs already enjoy a high degree of trust from SMEs, with 45% reporting an increased trust in their communications service provider compared with the pre-COVID-19 era. Trust in CSPs was boosted during the pandemic as they continued to provide the connectivity services vital to keeping the SME segment up and running.
Trust is a significant differentiator for CSPs versus hyperscalers in the new age of digital services. As CSPs consider how to expand their SME business with new pathways for growth and diversification, a marketplace-driven business model can help.
The success of a marketplace-driven business model depends on providing the proper framework and architecture and related consulting services. It also means allowing SMEs to pick essential components from tools and services that work alongside their existing stack, systematic upgrades, and relevant customer service. To learn more about implementing this model, please read our recent study: Powering small and medium-sized business transformation: CSPs’ path to new growth.
CSPs can tap into a ready-and-waiting market of SMEs looking for their connectivity services and curated bundles to digitally transform and grow their businesses.
A marketplace can drive significant revenue and create a launch pad for broader plays into new customer segments, new geographies, and new business models for data monetisation. It’s a sizable opportunity, but CSPs are not the only ones pursuing it.
Big tech players and point-solution Independent Software Vendors (ISVs) are also building offerings to address this market. If CSPs don’t act soon, they risk losing market share or being cut out altogether.
