Why, and how, should SMEs get smart?

Smart buildings are often seen as monolithic structures housing enormous organisations. But what about implementing the same technology for smaller businesses?

Thinking of smart buildings, at least in my mind, conjures up images of towering skyscrapers owned by corporates with enormous budgets. Googling ‘smart buildings’ reinforces this notion. There’s The Edge Building in Amsterdam, Capital Tower in Singapore, Glumac in Shanghai, as well as our own work for Informa at 240 Blackfriars in London. The extensive PR and marketing around these buildings is completely justifiable. They are enormous, expensive and glamorous projects that have an extremely carefully thought out smart technology solution – one that successfully maximises the efficiencies of the building itself in terms of cost and energy whilst also supporting and empowering those that use it to perform at their best. 

However, it is not only the big organisations that can make use of such solutions. On the opposite end of the spectrum are small-medium sized businesses (an SME is a business with less than 250 employees and less than €50M turnover). When these organisations employ smart technology they are unlikely to receive the same level of attention as larger projects, but business cases for such solutions in smaller companies are extremely strong.  

Small businesses, because of their numbers, ‘form the backbone of the UK economy’.1 Moreover, they also ‘face all of the challenges their larger counterparts do’.2 The case for SMEs to use smart technology can be seen in two ways. The first being that there’s extensive research into how SMEs can effectively employ such technology because the SME market is so large. Therefore, there’s easy options already available for decision-makers that have demonstrable results. Secondly, a common challenge of both large and smaller businesses could be reducing spend. Smart technology is extremely efficient at reducing spend on people, energy and space which would mean the actual use is very similar to that of a larger organisation. 

Theoretically, it should be easy for smaller businesses to implement more smart technology and reap the benefits. However, there are some barriers. 

What might prevent an SME from implementing smart technology?

Despite the number of ready made options available, the ease of deployment, and the demonstrable benefits of using smart technology, SMEs are still resisting embracing new solutions. Of the 1,000 small and medium sized businesses in the UK surveyed by YouGov, 57 per cent said price was the main factor, with concerns over complexity making up 30 per cent and time constraints being 31 per cent.3  

When considering price as a barrier, the latest tech can definitely seem like an expensive and unnecessary outlay, which is justifiable. Not every business will have a use case for smart technology. The business case for an investment in technology, must come first if it is going to succeed. These are expensive solutions and the implications of poor financial decisions are extremely serious. Therefore, any decision-maker must have a thorough understanding of the business needs, prior to investment.  

However, a crucial benefit an SME has over a larger organisation is its size. Since they are smaller, a decision maker is in a very strong position to fully understand all of the business functions and therefore can make a more effective business case for whatever technology may be required. In turn, this reduces the chance of a wasted investment.  

When thinking of smart technology solutions that can be used by SMEs it is useful to break them into two sections. The first are setups that help with operational efficiency. These solutions aim to reduce spend on energy efficiency by automating specific functions. The second grouping of options available are related to people costs and are therefore more involved both in terms of the problems they resolve and the technology used.  

How can smart technology improve energy efficiency?

As stated before, because of the size of the market, providers have developed options specifically aimed at improving user experience, increasing energy efficiency and decreasing overall spend. Straightforward options that an SME could use include occupancy sensors to trigger lights to reduce energy waste as well as climate control that monitors room usage to adjust heating requirements. Using technology in this way helps to generally reduce spend across the board, as well as meet climate targets. Furthermore, should climate goals become more important in the coming years, having an energy efficient business will also be a future-proofing activity. 

How can smart technology empower people and support complex business functions?

A more complex use case is the effect smart technology has on the people who use the space.  

For SMEs, ‘staff retention is a key issue’.4 In the YouGov survey referenced earlier, ’more than a quarter of firms (27pc) in the North East found it more difficult to retain staff in 2018 than 2017 (compared to a national average of 17pc), and no firms in the region found it easier’.5 Furthermore, hiring in itself is costly both in terms of time and money as the average hire in the UK costs £3000 and takes 27.5 days.6 Smart technology can offer employees perks that create a more positive environment that empowers them. This in turn can help to alleviate concerns over staff retention.  

For example, flexible working is a perk that can help to attract and retain employees, one that also benefits the business. Operating in this way improves work-life balance, health and wellbeing, and productivity.7 Moreover, it allows a business that is located in a remote area to connect with skilled workers that do not live locally.

However, a business needs a certain level of technology to be able to support this type of working. Smart technology can really help out here. Good internet connectivity would be required as a minimum but implementing smart technology will help to support flexible working. One particularly important solution to implement would be cloud technology. Cloud technology is vital so that employees can access their important work-related files and work collaboratively from whichever location or device they choose to work from. It is significantly more efficient (in terms of employee time) and safer than using physical storage to transport data because it removes any versioning issues as well as eliminating the chance of a physical hard drive containing sensitive data being accidentally left out in public.

Although it is an expensive initial investment, giving employees the opportunity to work in this way is overall good for staff. From there, the organisation benefits from motivated workers that stay in the business longer, resulting in better output as well as reduced hiring costs. 

However, the technology itself, and the business functions it supports, can also become more involved.  

One particular use case for smart technology in SMEs is to use it to support the marketing strategy by making it more efficient and ultimately more successful. SMEs can use an IoT device to see how customers are using their products, this can in turn create more effective and targeted marketing campaigns. An SME, carefully monitoring their people spend, may attempt to reduce overall marketing spend in order to prioritise their primary services as a business. Furthermore, the business may not have spare funds to be able to employee full-time marketing staff. Therefore, technology that can generate data through customer insights in an interpretable format is extremely useful. The business can reduce people spend because marketing insights becomes automated. Moreover, any marketing plans can be based on facts and data, as opposed to instinct, further reducing spend by eliminating wasted marketing efforts. 

So, there’s multiple different instances in which smart technology could be deployed to help smaller buildings improve performance and productivity. However, like any organisation, SMEs are subject to change. The initial investment is expensive, but so is the cost of scaling and developing a smart system over time. Let’s take a look into upgrading, changing or growing a smart technology solution.  

What happens if hardware changes are required after upgrading?

There are multiple reasons as to why changes to hardware could be required. Some examples include changes to business structure (growth or decreasing in size), hardware or software upgrades or new business functions which require new technology. However, replacing technology installed in a building can be extremely costly both in terms of labor and new parts.  

At Vanti, we have developed a solution to all of the above. One that reduces labor costs and is completely flexible to business needs, whether it grows in physical size or requires technology with new functions. Our solution, Smart Core, is an open-source operating system for buildings that tells hardware and applications within a space how to interact each other​. Prior to this methodology, each system would be siloed, only linking to the minimum number of other systems required to make everything work together. Using technology in this way is why upgrading, replacing or adding is so expensive, as to remove one section often requires disconnecting multiple others. However, with Smart Core, individual systems can be removed or added at will, without interrupting the function of any of the other systems. Not only is this system more scalable due to its efficiency, it is also significantly more stable because if one element breaks, it only breaks in isolation, without creating a chain reaction of problems. 

There’s a clear and strong case for SMEs to get smart. From simple and easy to implement solutions that have demonstrable results that make your business more efficient, to complex, innovative and bespoke smart technology setups that empower your businesses’ people to perform better, while attracting and retaining the best talent.  
Smart technology has amazing results for businesses of all sizes; if you’d like to use technology in exciting and beneficial ways for your SME – get in touch

Sources used

Citations 1 through to 5 can be found on The Telegraph website.
Citation 6 can be found on the Glassdoor website.
Citation 7 can be found on The Guardian website.