Strategy, Legal & Operations

Will your business disrupt—or be disrupted?

“Digital transformation” may sound like a buzzword, but the drivers behind it are very real. In an era where technology is reshaping businesses and industries, companies that harness technology can reap big advantages over those that don’t. Businesses must first determine how to adapt their businesses for the digital age and then put technology to work to bring these changes to life.

Technology Speeds Up the Creative Destruction Cycle for Businesses

As the rate of technological innovation increases, the pace at which businesses rise and fall—known as the “creative destruction cycle”—speeds up too. In 1965, the average tenure of companies on the S&P 500 was 33 years. By 1990, it was 20 years. And it’s forecast to shrink to 14 years by 2026. If this forecasted churn rate holds, 50% of today’s S&P 500 will replaced over the next 10 years.

Established businesses that can’t keep up will be pushed out of the market by more agile companies that disrupt established business models. Put another way, “The fast will eat the slow.”

We all know that Amazon gets this! Its business model is based on using technology and data to disrupt entire industries—providing more convenience, lower prices, instant and nearly-instant fulfillment to consumers. Amazon’s objective isn’t to meet customer expectations—it’s to reset them and disrupt incumbents.

This phenomenon is occurring everywhere in every industry—think about the impact of Uber and Lyft on the taxi industry, Airbnb in hospitality, or StitchFix in the fashion world.

SMBs See the Writing On the Digital Wall 

SMBs increasingly understand the ever-more critical link between technology and business success.

SMB Group research indicates that 82% agree that using new technology effectively is key to business growth, and over 80% agree that technological changes are reshaping their businesses, culture, and industries.

SMBs are also becoming more familiar with what digital transformation is. 57% of SMB respondents now say they’ve heard of the term and think they know what it means—up from 33% when we asked the same question in 2017.

Younger SMBs are Embracing Technology and Change Faster than Older SMBs

But not all SMBs are equally proactive in this area. Our research reveals that younger businesses are considerably more progressive in their technology views and actions than their older counterparts.

For instance, compared to SMBs that have been in business more than 10 years, SMBs that have been in business fewer than 10 years are roughly twice as likely to be planning to increase their technology spending as older firms and are 1.4 times more likely to forecast revenue growth.

They are also roughly twice as likely to be pursuing new initiatives to fuel growth, such as launching a new product or service, adding a new sales channel, expanding into a new market, and more.

Younger SMBs are More Likely to Run Key Applications in the Cloud

SMB adoption of cloud or software-as-a-service (SaaS) solutions has been rising steadily over the years.

Flexibility, ease of use, speedy deployment, and financial and budgeting benefits are driving more SMBs to the cloud. Cloud providers lift the burden of owning and managing infrastructure and applications off the backs of their customers and provide frequent application updates so SMBs can take advantage of new functionality without having to install new software or hardware.

But younger SMBs, who have come of age in the era of cloud computing, are somewhat ahead of older SMBs when it comes to deploying cloud applications across the business applications spectrum.

Because modern cloud solutions are built on open, flexible platforms, cloud providers can also embed new technologies—such as artificial intelligence and machine learning, blockchain, natural language processing, internet of things (IoT), and more into their solutions—providing access to new capabilities directly within the cloud business solutions they already use. SMBs using these solutions can take advantage of these new capabilities when they need to pursue new opportunities or adapt to changing market conditions.

SMB adoption of cloud accounting and financials has lagged in comparison with other solution areas.  However, whether you’re entering a new market, adding a new subscription-based revenue model, or building a new channel, you need to be able to easily adapt your financials system to add new workflows, and to plan, track, and manage new sales and revenue information for these new initiatives.

Cloud-based financials solutions, such as Sage Intacct, are built on open architectures. This makes it easier to integrate real-time, relevant data from sales, marketing, human resources, and other areas into the financials system—and get a holistic view of what’s happening in the business.


The mandate is clear: Businesses can no longer afford to be complacent about technology and changing market conditions. All SMBs need to critically assess the metrics that matter most and develop a proactive strategy for using technology to adapt to and stay ahead of customer demands, market conditions, and competitive pressures.

This is the second post in a three-part blog series sponsored by Sage Intacct that examines top technology and business trends for SMBs, and their impact on finance and accounting. Read the first post here: Ready, Set, Grow: Future-Proof Your Business with Cloud-Based Financials.