Trends in Small Business Adoption of Mobile Solutions

Mobile technology is revolutionizing how small businesses get things done. Over the last few years, SMB Group has conducted detailed surveys to quantify the impact of mobile in the small business market. Having recently published our 2014 SMB Mobile Solutions Study, we thought the timing was right to look at some key benchmarks to illuminate just how quickly very small (1-19 employees) and small (20-99 employees) businesses are evolving in the mobile solutions area.

Mobile Making Steady Gains as a Percentage of Overall Small Business Technology Spending

Mobile solutions also account for a growing share of very small and small business technology budgets (Figure 1). Year-over-year, median spending on mobile solutions as a percentage of total technology spending has risen 10% year among very small businesses, and 7% among small businesses.

Figure 1: Mobile Accounts for an Increasing Share of Small Business Technology Budgets

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 In addition, both very small and small businesses continue to be bullish on mobile spending plans (Figure 2). In 2014, 48% of very small businesses and 70% of small businesses forecast that they would increase mobile spending in the coming year.

 Figure 2: Small Businesses Mobile Spending Plans Continue to Rise

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Mobile Applications Play an Increasingly Bigger Role in Small Business

Trending analysis shows that mobile applications are becoming more critical for small businesses. Both very small and very small businesses continue to incorporate a growing number of mobile apps into their day-to-day business operations (Figure 3).

Figure 3: Increasing Use of Mobile AppsSlide3

Since upwards of 80% of very small and small businesses already use basic collaboration and productivity tools such as email, calendar and contacts, growth is tapering somewhat in this area. However, some mobile collaboration and productivity apps are poised for strong gains next year, with 20%-plus of small business respondents planning to deploy mobile conferencing, document management, find-me-follow-me presence, personal assistant and/or document editing and creation apps within the next 12 months.

Mobile business apps have made bigger gains over the past three years, particularly among businesses with 20-99 employees, where the number of mobile business apps used regularly jumped 27% over the past year. We expect this trend to continue, as respondent’s plans to add new mobile business apps in the next 12 months were strong across the board. Mobile apps for time management and capture lead the way, with 25% of both very small and small businesses planning to add this capability; followed by mobile marketing and advertising (24%); business analytics (23%); and financial management/payment processing (23%).

Furthermore, 67% of very small and 73% of small businesses believe that mobile apps will replace some of their current business applications, further underscoring that mobile apps are becoming core to the business (Figure 4).

Figure 4: Mobile Apps Increasingly Likely to Complement/Displace Traditional Business AppsSlide4

BYOD Support Still Gaining

Employees increasingly want to use their own devices to access corporate data. This is part of a growing trend dubbed Bring Your Own Device (BYOD). In the BYOD model, employees can use the device of their choice for work. BYOD has both pros and cons. Most people think it helps improve employee productivity, and some think it can lower costs. However, most also agree that BYOD devices are more difficult to manage and secure than company owned devices.

Despite these tradeoffs, small business support for bring-your-own-device (BYOD) programs for employees also continues to enjoy strong growth (Figure 5). Top drivers for the 60% of small businesses that currently support BYOD support include employee familiarity/preference for their own device (71%); saving money (63%); and meeting employee expectations/demands (42%). Roughly one-quarter of these businesses pay for all smartphone device and service expenses. In contrast, 20% cover smartphone service plan costs only; 18% cover business use expenses only, and 20% provide employees with fixed monthly stipends. Interestingly, 18% expect employees to use their own mobile device for work but do not cover any BYOD expenses.

Figure 5: Growth In Small Business BYOD SupportSlide5

But BYOD challenges hinder wider adoption. 40% of small businesses don’t support BYOD due to security concerns (56%); difficult to manage (54%); and because reimbursing employees for BYOD is too time consuming/complex (38%). These businesses are not likely to add BYOD support until it is easier to partition, secure, bill and manage work-related versus personal mobile use and expenses.

Small Businesses Slower to Add Mobile Management Capabilities

In fact, small business adoption of bright and shiny mobile devices and apps has quickly outpaced their embrace of mobile management solutions in general. As shown on Figure 6, only 43% of businesses with 20-99 employees are using a mobile device management solution, while just 33% use a solution to manage and secure mobile apps.

Figure 6: Small Business (20-99 employees) Adoption of Mobile Management SolutionsSlide6

In addition, while small business spending on mobile devices, service plans and apps as a percentage of total mobile spending has risen from 2013 to 2014, spending on mobile management, consulting and security has declined somewhat from 2013.

But it does not appear that cost is what’s holding small businesses back. Just 16% of respondents said that they didn’t’ use a mobile management solution because they are too expensive. Instead, the biggest obstacles are they don’t think they need it (51%); they don’t know which solution is right for their company (22%) and they don’t have the resources to deploy it (22%).

Perspective

Small businesses are clearly swept up in the mobile tsunami, and mobile solutions are becoming essential to small business success. However, small business adoption of mobile devices, apps and services is rapidly outpacing their ability to secure and manage mobile assets.

Without appropriate mobile device, application and data management policies and solutions in place, small businesses risk putting their corporate financial and brand security at ever-higher risk. In addition, as reliance on mobile solutions rises without adequate attention to management, many small businesses will find manual attempts to track and manage mobile use increasingly time-consuming and frustrating.

Study findings strongly suggest that while small businesses have quickly grasped how mobile can help their businesses, they are still struggling to understand the why, what, and how of mobile management. Vendors will need to dramatically ramp up education, guidance and consulting initiative and services to help more small businesses understand and take action in this area.

This is the first post in a two-part series sponsored by Dell that discusses how small businesses are using mobile technologies in their businesses.

The State of SMB Adoption of Mobile Apps and Management Solutions

Slide1We recently published two new Perspectives reports that provide in-depth data and insights about the state of SMB mobile solution adoption. These reports tell an interesting story: While 55% of small and 65% of medium businesses view mobile solutions as critical to their businesses, and as mobile budgets continue to rise, SMBs are challenged by high data service costs, uncertainty about which solutions are the right fit for their businesses, security and management concerns, and integration.

The first, SMB Adoption Trends and Requirements: Mobile Applications, examines SMB drivers, challenges, requirements and future implications for SMB adoption and of mobile applications. Some of what we learned includes:

  • 84% of small and 87% of medium businesses view mobile apps as complementary to traditional business applications, and a majority envision that mobile apps will replace some traditional applications.
  • Employee use of mobile collaboration apps is ubiquitous, and adoption of mobile business apps jumped 9% in small and 5% in medium business from 2013 to 2014.
  • SMBs are rapidly adopting customer-facing mobile websites and apps to help attract new customers, respond faster to external constituents and keep up with the competition.
  • Security concerns, development and deployment costs, and lack of a strong business case are preventing SMBs from implementing more mobile apps.

The second report, SMB Adoption Trends and Requirements: Mobile Management, explores how SMBs are handling mobile management today, their future plans, and what they need vendors to do to better serve their needs. For instance, we found that:

  • From 2013 to 2014, spending for mobile consulting, management, apps and security services rose in terms of actual dollar expenditures. However, dollars allocated for these areas decreased as a percentage of the total SMB mobile spend, while the percentage allocated for mobile devices and services continues to grow.From 2013 to 2014, small business support for BYOD jumped 33%, while medium business support grew 10%. However, BYOD adopters are struggling to determine the best policies to administer and reimburse for BYOD device and service plans.
  • Less than half of SMBs have implemented mobile device management solutions, while about one-third use a mobile application management solution.
  • 29% of small and 28% of medium businesses are seeking services to help them craft mobile strategy, security, use and management policies.

These reports underscore that although many SMBs want to continue to expand their use mobile technologies to transform their businesses, they need vendors to provide them with easier access to better solutions to manage and scale their mobile capabilities.

For More Information
Report highlights, detailed table of contents and pricing are available for each report by clicking on the report links above. 
Please contact Lisa Lincoln, lisa.lincoln70@smb-gr.com or 508.734.5658, for additional information or to order.

2013 SMB Mobile Attitudes and Challenges

The rapid rise of mobile in the consumer space is accelerating the explosive growth of mobile solutions in the business world. Businesses recognize that mobile solutions can empower employees to be more productive and responsive to customers. Likewise, they realize that providing mobile solutions to customers, partners and suppliers is vital to improving customer experiences and fueling business growth.

So it comes as no surprise that 91% of SMBs already use mobile solutions in their businesses, according to 2013 SMB Mobile Solutions Studyand 67% of SMBs indicate that “mobile solutions are now critical for our business,” as shown on Figure 1. In addition, 70% see mobile apps as a “complement to current business applications”, and 55% think that mobile will replace some of their existing business applications.

As SMBs turn to mobile solutions to help grow business, improve productivity and streamline workflow, they are beefing up mobile capabilities both for employees, and for external customers, partners and suppliers.

Figure 1: SMB Attitudes About Mobile Solutions

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But the rapid and explosive growth of and reliance on mobile solutions has caught many SMBs off-guard, resulting in some key challenges, as revealed on Figure 2.

Figure 2:  Top Challenges to Using Mobile Solutions

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Cost Concerns

As shown in Figure 3, SMBs currently spend the bulk of their mobile budgets on voice and data services and devices. But SMBs are also opening their wallets wider for mobile consulting, management, security and apps.

Figure 3: SMBs Mobile Budget Allocation

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As a result, mobile solutions are gobbling up a growing share of SMBs technology budgets. Our study reveals that SMBs currently spend about 11% to 20% of their technology budgets in the mobile space, and 68% expect they will need to spend more on mobile solutions next year.

Management Headaches

SMB use of mobile apps for employees, both for collaboration apps, such as email and calendars, as well as for business apps, such as CRM, order processing, expense management, etc. have risen overall by approximately 20% since 2012.

Concurrently, SMB adoption of “bring your own device” (BYOD) policies for employees has doubled over the past year to 62%. SMBs are also ramping up use of customer-facing mobile apps and mobile-friendly websites to enable customers to do things such as schedule appointments, make payments, and access customer service.

As the number of mobile apps and the diversity of mobile devices continues to grow, SMBs want more control and management requirements increase. This is driving increasing adoption of mobile management solutions. Overall adoption in this area is up 15% when compared to our 2012 study. SMBs top 3 management requirements include being able to:

  1. Remotely install, update and remove managed apps from devices
  2. Track and view installed/approved/blacklisted apps at the user/device level
  3. Authenticate, manage and deploy apps based on user groups/roles and restrict content access

Security Worries

Much of the mobile management challenge revolves around security.  Security concerns rise to the top both for the internal apps that employees use, as well as for the mobile websites and external apps that SMBs provide out to customers, partners and suppliers.

On the employee side, the top security management capabilities that SMBs are looking for are to:

  • Lock devices when devices are lost or stolen, or the employee leaves the company
  • Provide data encryption on devices
  • Partition/separate business-related data apps from personal data and apps
  • More Information About the Study

Meanwhile, SMBs rising adoption of mobile payments and other apps that collect personal information is spiking security concerns on the external app side as well.

Looking Ahead

SMBs look at mobile solutions and like the value that see from them. Consequently, they plan to increase investments both for employee apps, and for external-facing mobile websites and mobile apps for customers, suppliers and partners.

In addition, the BYOD trend shows no signs of abating. Employees want to use the devices that they’re most comfortable with. In addition, some SMBs view BYOD a way to trim voice and data service costs, which as explained, are viewed as a top obstacle to using mobile solutions more broadly in their companies. However, BYOD adoption ushers in additional security and management challenges that may result in added costs that cause some SMBs to rethink the BYOD equation.

Mobile management, security, and consulting services spending categories will see significant spending increases as SMBs endeavor to reap more value from and do a better job managing an increasingly complex assortment mobile devices, services and solutions. Today, most SMBs are performing mobile management tasks themselves, with internal resources. However, given that many lack adequate IT resources and mobile expertise, we expect that SMBs will increasingly turn to external solutions providers to get the management job done–particularly as they increase their business reliance on mobile, and requirements for security, integration with traditional business applications grow.

More Information About the Study

The recently completed SMB Group 2013 SMB Mobile Solutions Study provides a detailed examination of mobile devices, services and solutions that SMBs use. Based on over 700 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-maker respondents, the study provides a comprehensive analysis of SMB:

  • Mobile attitudes, adoption and use
  • Mobile drivers and inhibitors
  • Information sources and decision-making for mobile solutions
  • Penetration of mobile devices and services
  • Types of mobile devices used and who uses them
  • Policies and governance for mobile solutions (including BYOD)
  • Mobile applications for internal users (employees)
  • Mobile applications for external users (customers, partners, suppliers, etc.)
  • Budgets for mobile solutions
  • Mobile management

Two focused reports are also available to use for education and thought leadership. More information can be found on the links below.

Considerations for SMB Mobile Management

The Yin and Yang of Mobile Applications

Top Customer-Facing Mobile Apps for SMBs Today–and the Trajectory for Tomorrow

How are SMBs using mobile solutions to interact with their customers, suppliers and partners? What are top mobile apps that SMBs offer for their external customers, partners and supplier to use? Just as important, what mobile applications are they planning to deploy?

We found out in our recently completed SMB Group 2012 SMB Mobile Solutions Study, in which we asked 717 U.S. SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers and influencers about their mobile solutions environment, including:

  • Mobile Device and Service Provider Use and Plans
  • Use and Plans for Internal (Employee) Mobile Business Solutions
  • Use and Plans for External (Customer, Partner, Supplier) Mobile Business Solutions
  • Use and Plans for Mobile Web Sites
  • Benefits and Obstacles to Using Mobile Solutions
  • Use and Plans for Mobile Payments
  • Mobile Budgets
  • Mobile Procurement, Policies, Governance and User Roles
  • Mobile Management Adoption, Solutions and Services

Rising SMB Adoption of Mobile Web Sites and Apps for External Users

As noted in The Yin and Yang of Mobile Applications Benefits For SMBs, the study revealed that SMBs increasingly see that customer-facing mobile applications can help them grow revenue, attract and retain customers, and keep up with the competition.

SMBs are using both mobile-friendly web sites and mobile apps to offer functionality to foster this interaction, as shown on Figure 1.

Figure 1: SMB Use and Plans for Mobile-Friendly Web Sites and Mobile Apps

Top 10 Mobile Apps that SMBs Provide for Customers, Suppliers and Partners

Regardless of whether SMBs are employing a mobile-friendly web site, mobile apps, or both, what are the top capabilities that they are providing to external audiences? And what do they plan to add in the next 12 months?

Among a field of 26 possible choices, the solutions in Figure 2 came out on top across small and business respondents.

Figure 2. Top 10 Mobile Functions that SMBs Provide and Plan to Provide to External Users


The study also revealed significant differences in the types of mobile apps SMBs choose to deploy based on industry. For example, the top customer-facing mobile app that professional services firms use is for scheduling appointments, while the top app for retail firms is to enable their customers to buy products/services.

Expanding SMB Digital Presence Via Mobile Solutions

Until recently, most SMBs got along just fine with a corporate website and/or a Facebook page. But SMBs are increasingly finding that they need to make sure that customers can interact with them anytime, anywhere and from any device.

But there are many options and/or trade-offs to think about–mobile web sites, mobile landing pages, mobile payments, mobile apps, etc. Does the company need mobile apps, or will a mobile-friendly web site and landing pages suffice? In addition,

Given limited IT staff and expertise in developing and managing mobile solutions, most SMBs will need help in thinking through these issues, evaluating solution alternatives, developing an effective mobile strategy, and implementing and managing it (Figure 3).

Figure 3: SMB Use/Plans for Mobile Management Solutions

The bottom line is that while mobile apps may be the headline, helping SMBs develop a solid strategy and framework for deploying and managing their mobile environments is likely to provide vendors with an even bigger opportunity in the mobile space.

The Yin and Yang of Mobile Applications For SMBs

What are SMBs top business challenges, and how well do mobile solutions help them meet these challenges? Interestingly, that depends on whether you’re asking them about the benefits of having their employees use internal mobile apps, or the value of offering mobile apps and mobile-friendly web sites for external customers, partners and suppliers to use.

We asked more than 750 SMB (small business is 1-99 employees; medium business is 100-999 employees) decision-makers and influencers these questions in the recently completed SMB Group 2012 SMB Mobile Solutions Study, which provides a detailed examination of mobile devices, services and solutions that SMBs use, including:

  • Business background
  • Information sources and decision-making for mobile solutions
  • Penetration of mobile devices and services
  • Types of mobile devices used and who uses them
  • Policies and governance for mobile solutions
  • Mobile applications for internal users (employees)
  • Mobile applications for external users (customers, partners, suppliers, etc.)
  • Budgets for mobile solutions
  • Mobile management

SMBs Top Business Challenges 

In every study we do–including this one–attracting new customers and growing revenue top the list of the most significant business challenges that SMBs face. Maintaining profitability and dealing with economic uncertainty also are raised as significant challenges (Figure 1).

Figure 1: SMB Top Business Challenges

SMB Perception of Business Value from Mobile Applications

In this study, we asked SMBs several questions about the kinds of mobile applications they use. We asked them specifically about what mobile apps their employees use for business purposes, and what external mobile apps and/or mobile-friendly web site capabilities they use to interact with customers, suppliers and partners. We also asked them what they think are the top business benefits they get from using both internal and external mobile apps.

Interestingly, while SMBs believe that they’re receiving significant business value from both internal and external mobile solutions, the primary benefits they associate with these two categories are quite different. As shown on Figure 2, SMBs associate using internal employee-use apps with things like increasing productivity and getting access to people and information more quickly.

Figure 2: Benefits SMBs Associate with Internal (Employee) Mobile Apps

Meanwhile, as indicated on Figure 3, they view external applications as a key means to help them grow revenue, attract and retain customers, and keep up with the competition.

Figure 3: Benefits SMBs Associate With External (Customer, Partner, Supplier) Mobile Apps

Gearing Up for Mobile Growth

The top benefits that SMBs associate with external mobile apps and mobile-friendly web sites align much more closely to their key business challenges–growing revenues, attracting and retaining customers and increasing profitability.

Not surprisingly, this also means that we tend to see somewhat higher demand for the external, customer-facing mobile apps. Some of the areas with the strongest plans to deploy in the next twelve months are applications for external users to: check delivery status of my orders (34%); shop/buy products (31%); and pay for products, goods, or services (29%).

However, SMBs clearly perceive significant business benefits from both internal and external mobile applications–and survey results also reveal that SMBs have healthy plans to increase their use and spending for both internal and external mobile apps. As mobile applications proliferate, vendors can best capitalize on this growth with articulate marketing and messaging that helps SMB customers assess which solutions will best meet their needs.

Small Businesses Want to Go Mobile–But Need Less Expensive Data Plans

We just published our latest SMB Group survey study, “2010 Small and Medium Businesses Mobile Solutions Study,” which reveals that although just a small percentage of U.S. small and medium businesses (SMBs) currently use mobile applications, they are revving up plans to implement mobile business applications to help fuel growth.

Judging from the types of mobile business solutions that these businesses are most often planning to deploy–mobile marketing, customer service management, social media marketing, time management and field service–it’s clear that they want to use mobile solutions to help them meet their top business goals of attracting new customers, growing revenues and improving customer satisfaction.

SMB plans to implement mobile business applications are very strong–in some cases, plans to deploy are almost triple current use. However, the high cost of mobile service plans threatens to stall SMB adoption of smartphones and other devices that enable employees to take advantage of mobile business solutions. This is particularly true in very small businesses (1-19 employees), where 40% cite high voice and data costs as a the top barrier to broadening mobile solution use by employees. Even when we look at the total small business group (1-99 employees), 37% say these costs are their top obstacle. As a result, 43% of small businesses currently provide voice-text phones and plans only to employees.

Of late, service providers are offering more limited choices for voice-text only phones. This will give some small businesses the push they need to bite the bullet and invest in data service plans. But, these findings underscore that small businesses need more flexible and affordable data plans in order to take advantage of the mobile applications that can help their businesses grow.
It will be interesting to see what types and which vendors will be willing to shake up the status quo with some new pricing schemes, bundles and incentives to help small businesses act on this opportunity.
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