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The real digital divide: are you at risk?

"[I] can't imagine life without my team accessing files in the cloud".

"[I] can't imagine life without my team accessing files in the cloud". Photo: iStock

Seven years is a long time in today's fast-paced world.

It was seven years ago that I started my business. Back then, there was no Twitter, no Facebook and some people had never even heard of a blog. Hardly anyone had heard of "software as a service" and the concept of running your business from your laptop, regardless of what country you were in, was still a freakish idea.

"... what are the key issues facing anyone starting a new business today? And what can existing business owners learn in order to catch up - to reduce the size of the digital divide?" 

What a difference a mere seven years can make. These days, I think nothing of travelling away from my business, can't imagine life without my team accessing files in the cloud and use "software as a service" for everything from my customer relationship management system to my accounting program.

While I have a personal passion for technology, I know that not everyone shares my fascination (okay, obsession) with finding new ways in which technology can streamline operations, expand my reach online and scale my business.

I can see that this digital divide is only getting bigger. No, that's an understatement. It's not merely a divide any more. It's fast becoming a chasm so deep and wide that it will take superhuman strength - or something close to a miracle - for business owners to cross it if they don't want to be left behind.

Every month that goes by, technology becomes more powerful but easier to use. However, I meet too many business owners who are still thinking like it's 2005. This has been brought home to me because I recently co-founded a new business. And I know that the choices I'm making today weren't even available when I was laying the groundwork for my other business seven years ago.

So what are the key issues facing anyone starting a new business today? And what can existing business owners learn in order to catch up - to reduce the size of the digital divide.

1. Technology should provide your competitive advantage

Technology is not just some pesky expense that allows you to email, surf the net and create Word documents. It should be a central part of your infrastructure. It shocks me when I hear people say "I just don't understand computers" or when I see them go through manual work processes that could be done in a fraction of the time - at the click of a mouse.

That's because it's technology - or an effective use of technology - that can give you a competitive advantage. I truly believe that those who do not believe this will sink into the depths of small business failure over time. This was echoed by Dell's global CIO Adriana Karaboutis when I spoke with her at the recent Dell Women's Entrepreneurs Network Event in New Delhi, India.

Of course Karaboutis is biased - she works for a technology behemoth. However, she's also right.

Karaboutis emphasised that technology has become the great equaliser, allowing small businesses access to the same kind of technological power that used to be the exclusive domain of large organisations. "The internet helps you get it out there ubiquitously," says Karaboutis. "In the past if you wanted to send out flyers to large groups of people or run a television ad, the costs were often prohibitive. The internet lets you get the message about your product or brand image out there much more efficiently."

So your competitive advantage is not likely to be coming from the computer hardware you choose, but online tools and resources such as software as-a-service, collaboration platforms, customer relationship management services, market research and marketing automation. These services were once out of reach for small businesses owners thanks to hefty price tags.

Karaboutis says: "The first priority for any small business is to look at the cloud. Take a look at software-as-a-service companies like to see how you can use the platform to market and sell for you. Consider your business case and determine the right channel to reach your customers - whether that's online or via direct mail. You can do this research using the cloud as well by asking for feedback from customers. It's about creating an ecosystem where you are constantly selling, getting feedback and strategising on ways to improve your product or create new ones based on what you know your customer wants."

2. Adaptability and speed to market

It's this ecosystem which provides feedback from customers, suppliers and the like that impacts another huge business driver these days: the ability to adapt and get new and improved versions of your product to market. Today's business world is becoming an environment that thrives on collaboration, where your business and the products you choose to sell go through various iterations in quick succession before they hit the mark. These days, it's tough to come up with the Next Big Thing because  technology is so democratised that many people - from all over the world - can easily come up with the idea and the code to create a new social network, or online auction platform, or web-based fashion portal.

In the past, business owners would hide their ideas away from the world, perfecting their products before launching them on to the public. These days, beta launches are common and startups openly share their ideas, waiting on feedback from their community before investing in expensive changes to their offering.

It's like being the kid at school who studies on his own and then puts his hand over his answers so that no one can see. He doesn't want to share his ideas with others in the class in case they use them. Compare him to the kid who openly shares his answers, helps others with their own problems, makes friends and has a ready made group of mates who will not only hang out with him but also spread the word about how cool he is.

3. Social media data harnessing

While data-mining and business intelligence has been around for decades, assisting in everything from predicting customer behaviour to identifying trigger actions in the sales process. However Karaboutis says that getting feedback via social media and harnessing this data is vital for small to medium sized business owners in order to thrive in today's environment.

"You have to be able to read your audience," she says. "If you don't leverage the data that's available via social media you're going to lose the competitive advantage. However, it's also important to be able to filter the right data."

When it comes to filtering data, Karaboutis is in a tougher situation that most. She is with a company that faces 25,000 mentions online per day. This is clearly not the realm of the average small business owner. However the principle is correct: obtain the right data from today's most active online channels, analyse it and tailor your offering accordingly. "It's no different than I go to my doctor and he's taking more data and doing more tests than another doctor," she says.

"Chances are that my doctor going to give me a better diagnosis."

In other words, these days, it's so easy and inexpensive to collect, analyse and use the correct data. This eliminates guesswork when you're setting the strategy and direction of your business.

Ultimately, if you're starting a business today, the rules are different that they were seven years ago. Everything moves faster, and you have to try harder when it comes to marketing what you have to offer. Because it's so easy for your customers to find an alternative … they just go to Google to find out.

However, entrepreneurial chutzpah and the desire to create meaningful relationships is still a key factor for most successful businesses. Even though it's easy to hide behind a computer and let all your interactions occur online, it's when you press the flesh and engage in real life that you and your business can truly shine.

twitter Follow Valerie Khoo on Twitter @valeriekhoo

6 comments so far

  • The lady is entitled to her opinions. She doesn't site any evidence that I can see.

    I'm a blogger but don't think tech is for everyone. If you run a local shop you probably don't need it. If you can spread your message by word of mouth quickly enough you probably don't need (and others will probably do it for you).

    As to the cloud. Remember the airline who lost their business for 3 days and couldn't contact their customers? I do. It will be a long while before I trust my whole business to someone else and their tech.

    And if the lady from Dell would give information on how to collect the right data and analyse it for useful information I would find it easier to believe that she knows anything relevant to small business.

    Evan Hadkins
    Date and time
    July 06, 2012, 12:07PM
    • I agree. Empty-headed regurgitated nonsense. Just as the internet makes it easier for "everyone", it has produced a massive clutter where apart from the capricious luck, its just massively harder to achieve leverage.

      She extrapolates her own experiences to be a generalised case, and tells us technology is the only way forward. Really? It might be the case for juvenile products, or products for juveniles, but it can't sell newspapers or funeral plans. Or most things.

      I work in the internet, and can firmly tell you that 90% of websites fail to produce anything except revenue for Google and disappointment for the business. Lots of people visit - very few buy.

      And phones? 500,000 apps and counting. Sounds like brilliant odds for a business model - you'd have more chance of making money, as a rock star.

      And beavering about the cloud? Salesforce is slow, mechanical and expensive. Nowhere in her article is mentioned the 'real' drivers of success - persistence, risk, a total quality program, a customer development program, and regular, altered offers.

      I think she reads her own tweets, and like most of twitter, its an empty, deafening irrelevance.

      Date and time
      July 08, 2012, 8:24AM
  • Nice idea - except that a lot of these SAAS solutions designed for 'small business' make some pretty out-there assumptions about how much disposable cash a 'small business' has to spend on license fees!! When I set up my business, I bought a PC for the cost of roughly 12 months with Salesforce - I spent a similar amount on a Palm SmartPhone (anyone remember them?) - both are still working just fine and (if we use SAAS as the cost benchmark), they've been free for the past seven years.

    Date and time
    July 06, 2012, 1:14PM
    • I love the cloud too. That is until I moved house recently and found Telstra couldn't get the new building connected to the grid for 6 weeks. 6 WEEKS! That's a long time without net for a web designer / gamer / total dork. We're surviving on our 3G access (better than nothing) while at home, but it means my games cloud based documents, design files, saved xbox games are difficult or completely inaccessible. I do love the cloud, but I won't be relying on it until I know I'll never have to wait for my ISP or telco to get their shit together to lay a damn cable.

      Date and time
      July 06, 2012, 3:03PM
      • The Cloud is about applications, not storage. With hard drives so cheap, offsite storage is pointless anyway.

        The point about the cloud is the ability to run applications from the browser, and easily integrate applications with each other.

        Twitter is not much different to "chat"and Facebook is similar to Compunet pages back in the 1980s.
        The most effective form of marketing is still broadcasting ; I've yet to see any example of targetted marketing producing much of anything.

        Date and time
        July 06, 2012, 4:03PM
        • Oh dear John. You're 25 years behind the times and have very little knowledge about marketing in todays environment. I will provide you an example of targeted marketing working. Based on previous behaviors and preferences I sent an email campaign to 5000 customers to sell 2000 tickets to an international act. They sold in 10 minutes and made £100,000 revenue. Total cost of the campaign would not have been £500. I know that money would not get you started with broadcasting campaign. This mindset is why major retailers in this country are going by the wayside.

          Date and time
          July 08, 2012, 11:46AM

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