One of the benefits of having been involved in technology for as long as I have is the ability to see recurring patterns. None is more fascinating than the one that is happening right now with respect to small business.

In the 1980s and 1990s, big companies chose different paths when it came to adopting technology. Some (such as Morgan Stanley and Visa) saw technology as a mechanism for differentiating themselves from their competitors. Others saw it as a necessary evil and spent as little as they could.

The Visas and Morgan Stanleys were right: investing in technology enabled them to turn themselves into industry leaders.

But by about 2000, their peers had caught up, and in 2003 Nicholas Carr published a provocative article in the Harvard Business Review entitled “IT Doesn’t Matter” (you can read the article here). In that article, Carr made the point that technology had become a commodity, and arguing that it no longer made sense for companies to over-invest in tech because it was no longer possible to gain a competitive advantage that way.

He was absolutely right for big enterprises. But what about for small business?

I’d argue that, for small businesses, today is the same as the early 1980s was for big enterprises — because technology has finally reached the point where it can be deployed efficiently and easily.

Small businesses that deploy technology aggressively will be able not only to distance themselves from their less forward-thinking peers, but will also be able to close the gap between themselves and big enterprises.

This is a big deal. We’ve heard for years, for example, about the crushing effect of “big box” stores on local retailers. A lot of their advantages stem from technology, and there’s not much chance that mom-n-pop retailers will be able to catch up on that score.

But winning doesn’t necessarily mean fighting them head-on; in fact, it’s far better to engage on the basis of your unique strengths. The advantage a mom-n-pop retailer has, for example, is knowledge of local customers — who they are, what they want, and how to reach them — in ways that the big box retailers never will.

Every small business today should have a broadband connection. And that connection should be every bit as reliable as dialtone (if yours isn’t, change your provider).

Couple that with the growing capabilities of on-demand software (like NetBooks) and suddenly you have access to the kind of capabilities that took big companies two decades to deploy.

As I said, this is a big deal. I’ll talk more about the different ways you can leverage IT to benefit your business in the future, and welcome your questions.

This entry was posted on Monday, December 17th, 2007 at 11:19 am and is filed under Management, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.