In the wake of lockdown initiations, the world experienced a rapid increase in digitalisation. Business leaders transformed business models to meet new market needs. They also invested in technologies, such as VPN systems and collaboration software, to allow employees to work safely from home.
Now, the question remains whether companies will continue on their path of transformation or revert to old ways. To know more, Capterra surveyed 2,904 respondents, which included employees and managers in small and medium businesses (SMEs) from Australia, Brazil, France, Germany, Italy, Netherlands, Spain and the UK.
For this article, we focused on the 2,141 respondents with decision-making power within their business. For a full methodology, scroll down to the bottom of the article.
53% of SMEs worldwide didn’t have a continuity plan
Gartner defines business continuity management as:
“An approach whereby enterprises plan for recovery of the entire business process. This includes a plan for workspaces, telephones, workstations, servers, applications, network connections and any other resources required in the business process.”
The crisis took the world by surprise—including small and medium-sized businesses. When questioned whether they had a continuity plan in place before the crisis, 53% of them didn’t have or were unsure if the company had one in place.
Not having a business continuity plan can lead to significant losses and potentially business closure. COVID-19 was an ongoing unpredictable crisis, and so having a contingency plan in place makes more sense than ever.
Author Nassim Nicholas Taleb talks about the ‘Black Swan theory’. The theory explores the extreme impact of rare and unpredictable external events and how businesses can’t be prepared for these.
Therefore, having a plan that allows you to prepare for the unplanned can save time and money—and possibly the company’s future. The benefits of having a plan include:
- Reducing time responding to the event
- Reducing recovery time of critical functions
- Avoiding poor decision-making in the early stages
- Having a successful communication flow with employees and key people during the crisis
61% of businesses don’t expect to last another 6 months
The lack of preparation from SMEs around the globe has led to them having to make last-minute decisions during the pandemic without focusing on long term goals.
On average, 61% of respondents surveyed worldwide don’t think their company will last more than 6 months without government aid. For France, this number jumped up to 72% while Spain was least concerned at 53%. In Australia, 62% of respondents were worried about their business surviving another half-year without the appropriate aid.
The Australian treasury and the EU are amongst many governments that are implementing financial support to help with the losses generated by the pandemic. However, for some companies, the losses are too significant and will end up closing down.
Digitalisation was considered a necessity by SMEs, rather than a priority
Gartner defines digital transformation as:
“Anything from IT modernisation (for example, moving cloud computing), to digital optimisation, to the invention of new digital business models.”
Despite companies adapting their offering in response to COVID-19, and switching to remote working, the results of the study showed that shifting towards this completely is not the top priority for SMEs in the short term.
When asked about the level of importance of several aspects in the short term—such as employee productivity, brand image or retaining customers— shifting their business to operate digitally was ranked the last priority by respondents in Australia, Brazil, France and Spain. For Germany, Italy and the UK, the last priority is securing financial assistance and for the Netherlands, it is improving brand image.
The study showed that for the majority of countries, maintaining employee productivity and retaining customers are the two main priorities. For Brazil and the UK, the main priority is adhering to social distancing and local guidance regarding quarantine followed by maintaining employee productivity.
For 64% of respondents, health and safety actions have been the main focus for their employer since the beginning of the crisis.
Implementing remote work policies (58%) has been the other focus for companies. Once companies had the policies up and running, the next step was to implement the software as soon as possible to avoid the maximum disruption and to help with employee retention and engagement.
48% of SMEs had to invest in software due to the crisis
Almost half (48%) of the respondents said their company invested in new software because of the crisis. Brazil (55%), Spain (55%) and Italy (52%) were the three countries that had to invest in software the most as a result of the COVID-19.
This makes sense when you look at the fact that 35% of companies had to look at implementing new software for teamwork and 70% of companies were able to adapt some or all of their business offerings so they could be delivered virtually now.
Making good software purchase decisions beyond COVID-19
The lack of business continuity plans led the majority of SMEs surveyed around the world to invest in software. The primary aim was to ensure their employees remain productive while remote.
The study found that decision-makers need help with choosing the right software. According to our survey, a third of the respondents are in the interest stage of the buying funnel. In other words, they know the software they need, but they need to research products that fit their business needs.
The study also found that almost half of managers based their decisions on:
- Price (49%)
- Ease of use (46%)
- Reviews (37%).
Interestingly, Capterra found significant differences between countries when looking at reviews. For example, for the European countries surveyed in this study (39%) and Brazil (45%), reviews are considered helpful when looking to decide on software purchases. In Australia, only 18% find reviews useful and the primary factor is the ease of use (22%).
Looking at reviews should be part of any software purchasing process. Third-party reviews provide an insight into the software experience from users.
Using technology to future-proof businesses against unanticipated threats
The crisis has shaken up businesses and pushed some of them into making software decisions driven by short term priorities. As restrictions ease and workers start to go back to the office, companies need to think about a longer-term strategy.
Gartner sees the response to the COVID-19 crisis in three main steps:
- Respond: Implement short-term actions to keep the business running as a quick response to a crisis.
- Recover: A more ‘coordinated effort to stabilise operations.’ This can include creating specific plans to restore the business to the level before the crisis and also look at resources available to do this.
- Renew: Gartner stresses the importance of learning from the experience and building resilience for the future.
We have seen how for many businesses, the crisis has meant money loss—or even closing down. Learning from previous experience will help companies to assess the mistakes made during a crisis. It will also help create a solid contingency plan that will help them in case of a new one.
We conducted an online survey in May 2020 between 2,904 respondents. Respondents were decision-makers, which included employees and managers in small and medium businesses (SMEs.) We surveyed employees from Australia, Brazil, France, Germany, Italy, Netherlands, Spain and the UK.