Not my words but taken from Digital Disruption and Small Business in Scotland. This report written for FSB by Jim Hamill, University of Strathclyde Business School 2015 focuses on opportunities and threats presented by digital disruption to the Scottish economy and Scottish companies.

The Report in a Nutshell 

‘Developing an appropriate response to digital change is the number one medium term challenge facing Scottish business today. As a matter of urgency, we need to support the small business community in transforming digitally; in overcoming the barriers and obstacles they face in developing and implementing effective digital strategies’.

The report highlights a gap between the current use of digital technology by Scottish firms and the pace of change. ‘The majority of businesses in Scotland remain unprepared for the coming digital onslaught. Digital led change is taking place at a much faster rate than the ability of SMEs to adapt. In an era where digital business transformation has become critical, this represents a threat to Scotland’s global competitiveness’

Conclusions of the Report

Wide variations exist in the level of digital maturity and enthusiasm across Scotland’s small business sector.

The majority (81%)  are ‘Disconnected Doubters’ (13%), ‘Basic Browsers’ (38%) or ‘Tentative Techies’ (30%).

‘Despite two decades of publicly funded digital support being available, the majority of SMEs in Scotland have made only limited progress in leveraging the full potential of emerging technologies for supporting business growth and competitiveness’

‘There remains a heavy emphasis on skills/knowledge development through workshops and events. While skills and knowledge dissemination sessions are necessary, especially in an era of turbulent digital change, it is fair to question whether they result in implementation by attendees’

Recommendations of the Report

The key premise of this report is that we live in an era of disruptive digital change. The digital and social media revolutions threaten traditional ways of doing things across a broad spectrum of industries.

This report’s view is that if businesses are going to not just survive but also thrive during this period of change, many Scottish businesses will need to make significant changes. The onus is ultimately on business owners and managers to develop digital transformation plans, implement them and monitor their success.

Further, Scotland needs to develop a new type of business leader. We need to embed digital into all business planning. And we fundamentally need to make our firms both more opportunistic and resilient to the threats and opportunities which digital change will present

Digital agencies and businesses are thriving in Scotland. Edinburgh saw the 5th highest growth in digital jobs across the UKs tech clusters between 2010 and 2014. PR and Comms agencies have expanded services to include digital marketing so businesses often already have access to digital solutions through their traditional marketing relationships. So what is it that’s stopping Scottish SME’s from making solid progress with digital technology? 

Three things we’ve experienced which can stop an SME’s digital development in its tracks.

 Team Buy In

Assuming everyone in your business will think investing into digital technology is a great idea is a mistake. Team members that make SME’s work often have vastly different experiences and talents in their teams (especially rural businesses where recruitment has been based on proximity) Roles demand multiple skills and grant a lot of autonomy and self management. Introducing another aspect to the business which has the potential to dramatically change the status quo can cause resentment and non co-operation. Best way to avoid this is to assume nobody in the business knows anything about digital technology and walk the team through the decision making process and exploration or adoption of solutions. This protects those who fear being exposed as not having a clue about digital technology and helps identify those team members who have a real interest in it and who can help support adoption.

No Strategy 

Lack of a digital strategy or a marketing strategy is common with smaller SME’s. Often there is a business leader who is keeping lots of plates spinning and giving information on a need to know basis – no time to sit and put it all down. Sometimes digital purchases have been made individually because someone was convinced they were imperative by a specialised vendor. A Facebook page was started because a business someone knew was making money doing it. Sometimes the business has been growing quickly and there is a ‘if it ain’t broke’ attitude . If you want to work methodically towards an objective you need a  strategy document which states where you’re going, how you intend to get there and how you’ll be measuring your efforts. Having a solid plan to share with with partners, consultants and new staff members means everyone is clear about their role and expectations. Co-operation  and communication between teams becomes easier. As an added bonus  (probably should have been listed first!) it will also help to stop your business being sidetracked by shiny new  and cool things other people are doing which won’t contribute to your end goals.

Investment into Resources 

There is a common misconception that digital assets once in place can be run using a task based approach rather than a practice . I say practice because as you add digital technology into your business ( websites, apps, CRM, cloud based services) there will be opportunities to be acted upon and insights to be explored. This will be an ongoing process because digital technology produces data. That data when analysed will help you to make decisions. Too often a business will take their digital marketing ‘in-house’ where it will be added to someones already laden role. Without skills, a real curiosity and a clear set of goals and targets to focus on digital results will falter. The potential of your digital investment  will be limited. Hire someone, invest in digital training and qualifications for staff members or accept there will have to be a budget to retain someone to manage it. There are plenty of digitally skilled people whose services can be bought on an hourly or task based rates. Agencies are also open to negotiation.

Read the full report here. Includes digital threats, opportunities and some practical case studies.