It used to be that small and medium size businesses would often have trouble competing with the larger companies. The larger companies had the financial resources to deploy infrastructure often necessary to perform at the top levels within the market. Start-up technology costs were once so high that only big players could launch businesses in many markets.
One of the interesting things that have occurred in our new technology age is a shifting of competitive balance. Small and medium sized businesses can now afford the same topflight technology deployed in the largest corporations, especially in the services markets. Hardware and software costs continue to come down. A small business can deploy the technology necessary to become a paperless office, for instance, for a couple thousand dollars or less.
What small and medium businesses often fail to realize is the competitive advantage they now have over their larger competitors. Deploying technology has become a critical feature within many markets. A large corporation often has layers of bureaucracy, which preclude the regular deployment of topflight and emerging technologies. Large corporations also have substantial barriers to technology deployment given the large workforce. These barriers include the logistical problems of installation and re-training, as well as the larger investment and license fees they often have to make because of the large number of workers they employ.
Take on the other hand a small business with five employees and one principle. That principle can identify a piece of technology on any given day, which will improve the internal process or the quality of their product or services. Within a couple days, that technology can be deployed and the workers trained. This process can be repeated throughout the year with relatively little effort and no bureaucratic barriers.
It used to be that a corporation would deploy a piece of technology and simply ride that technology for three to five years without giving it a second thought. Today, the turnover rate of technology is much higher.
Companies are often deploying multiple pieces of new technology many times throughout the year. Smaller companies are more flexible and therefore have the ability to be true innovators within their market. Large companies will often have a hard time keeping up with technology deployment.
The technology age will flatten many markets and reduce the competitive advantage of being large. Nimble fast-moving companies have an opportunity to be market leaders. In many instances, these will be smaller companies, which have a significant deployment advantage.