Business growth: Leveraging discovery for SME success

There is one thing modern businesses share in common – whether we talk of small, medium or corporate entities, all of them pursue stable, sustainable growth. However, they begin their business endeavor from different starting positions. These differences determine the capabilities of each business type. In the next paragraphs, we focus on the importance of the discovery phase for the growth of small and medium-sized enterprises.

What is an SME

There are many approaches to what SMEs are, but for the sake of consistency, we will be referring to SMEs as they are defined in an article presented on the website of the European Commission. Conforming to this EU standard means companies of a particular type may have access to EU programs that support SMEs.

According to the EU site, small and medium-sized enterprises constitute 99% of all businesses in the European Union. The factors that determine the category a company belongs to include staff headcount and either turnover or balance sheet total. This can be presented with a simple table:

From the legal point of view, companies have to fulfill certain other conditions too, including the completion of a form that states the company belongs to the SME category, and the enterprise has to be subjected to an analysis by the SME self-assessment tool. For the purpose of this article though, our understanding of SMEs will be based solely on the table above.

The differences between small and medium-sized enterprises vs corporations

By now we know that the EU itself created a clear distinction between companies of different sizes. Below, we provide an outline of these differences.

Company structure

The distance between the management and C-level staff members tends to be far smaller in SMEs when compared to corporations. The former have fewer layers of management while in corporations there are often several levels. In SMEs, the manager or CEO may be just a message away and is usually visible more frequently in day-to-day operations. In corporations, C-level personalities tend to be more elusive for regular staff members.

Resource availability and revenue

Corporations and SMEs start with different financial capabilities. In the first case, capital is often not the most significant issue, since such companies usually have solidified their presence in their most important market, with years of experience and revenue generation. Small businesses have to calculate their resources carefully as wrong decisions are more likely not only to topple their project, but even cause them to go overboard as an organization. Medium-sized businesses occupy the sweet spot, with enough financial backing to support their activities while leaving some room for more daring experimentation to get a breakthrough. Limited resources mean limited market reach and a smaller number of products for small businesses, while large corporations can operate with multiple products and services across different markets.

Introducing a product to the market

With a firm position in their respective market(s), corporations have the resources to try out new things without a huge risk. They can afford to try out new products or services, and may pick new target markets to enter. SMEs often start with more niche markets to avoid competing with the industry’s giants. When their first products/services are successful, they try to explore new opportunities and are a bit bolder with future projects and markets.

Procedures and decision-making

SMEs are usually less standardized and formalized in terms of procedures than their larger counterparts. This partially stems from the fact that such companies have fewer staff members and aren’t engaged in a big number of fundamentally different projects. Corporations have the opposite approach. With so many resources, staff members and projects to manage, sometimes in a quickly changing environment, there is a need for standardization and procedures if the operations are to go smoothly. There is no room for figuring out methods on the fly, and the cost of doing so may be too great. In corporations, decisions are more systemic and fact-based in comparison to SMEs, which have room for a more idealistic, subjective approach.

Experimenting and innovation

Innovation is arguably one of the most important factors that can help small and medium-sized enterprises gain the upper hand, grow and expand. It is a chance for startups to find their place in a competitive environment. However, for small businesses, the risk might be big enough to topple the entire company if things do not go as planned. On the other end of the spectrum, large corporations have all the money they need to try something new, and to promote the product in new markets. If the innovation is unsuccessful, then other, more solid projects will help mitigate the costs. Google is famous for developing innovative solutions, then killing them off unceremoniously, sometimes shortly after release. Google Stadia, the video game streaming platform is one such recent example, but there is an entire website dedicated to projects that have failed to deliver and were terminated by the company.

Discovery phase definition and role

The Discovery phase should be one of the first steps in any business endeavor. During this stage, a discovery team comprising specialists from different branches and a business analyst focuses on data analysis, scoping, planning and determining milestones, costs and end goals. The discovery phase facilitates project work, helps avoid pitfalls at later stages, optimizes costs in the long run and ensures all team members as well as stakeholders stay on the same page and know where the project is going.

How the discovery phase contributes to SME success

There are numerous benefits for SMEs resulting from a well-executed discovery phase that includes a business analyst. Below we list some of the most prominent ones.

It facilitates cooperation

Despite participating in the same project, it is often the case that specialists from one branch have little to no idea of what the teams in the other departments are working on. This can cause disruptions in the workflow when one team is unsure of what to expect when it relies on the other to deliver an element of the solution. The discovery phase mitigates these risks by making sure everyone follows the plan and knows more or less what the other teams are supposed to do as an outline was presented to others at the very beginning.

Better solutions from the get-go

With a diverse discovery team, it is easier to hit the jackpot with the best concepts at the very beginning. Sometimes very good ideas come from unexpected places – with all the team members aware of project goals, during the discovery meetings interesting solutions may arise from members of seemingly unrelated branches. Similarly, if interesting ideas are put forward, but other members know that, e.g., they are not viable in the long run or too demanding in terms of resources, such information comes up before the project begins, avoiding costly changes later on that could have a negative ripple effect on the whole endeavor.

Keeping everyone in the know

Communication is the key to effective workflow. Members of the discovery team can pass critical information to their teams so that everyone is on the same page, facilitating the work both within the specific branches as well as between different departments. The development team knows the business goals and stakeholder expectations while stakeholders are aware of what their team can deliver, at what cost and time.

Make the right calls from day one

Major decisions that outline the path for the business project establish a clear path for the entire team early on. Discovery meetings are a time for brainstorming and decision-making, and the contributions of people with different skills and backgrounds result in very fruitful conclusions. These are translated into specific, reasonable milestones spread out throughout a roadmap that serves as the reference point for all team members. Making the right calls from the very beginning avoids unnecessary and often costly deviations from the established path, helping to meet deadlines and stay within the estimated costs.

Decrease the chance of the “unexpected”

The discovery phase sets a path for the business endeavor, but it is also an opportunity to predict possible risks and establish backup plans or course corrections. Different people will be able to notice different potential dangers. It’s good to analyze all this feedback jointly and adapt the roadmap accordingly.

A bigger focus on User Experience

UX is a widely-discussed topic these days, and it’s not a surprise – a bigger emphasis on the user results in more satisfied customers, better product adoption and reputation. The discovery phase is the perfect moment to align user requirements with business expectations and the capabilities of the development team. With all three elements factored in, the final solution will cater to the expectations of your target audience, which will translate into better ROI.

Stay on course, follow the plan

One of the aims of the discovery phase is to create a roadmap that includes milestones, end goals and an estimate of the timeframe and costs of the project. It serves as a guideline for future reference, a reminder to stay on track and not deviate from the course that was established at the beginning when all the most important parties were present during the discovery meetings.

Better control of your costs

The discovery phase outlines the entire course of the project, allowing the business to estimate the costs from the start. Provided that the teams stay on track during development, these costs should not deviate greatly from the initial assumptions. As such, discovery meetings help companies better understand and allocate the resources needed to succeed in the business endeavor, supporting cost optimization and cost reduction.

Understand what exactly the customer wants

A careful analysis of the target audience as well as of the business environment combined with fruitful brainstorming during the discovery phase opens up a better understanding of what the target audience really expects from the solution. This translates to a better product or service, leading to improved results and ROI.

Conclusion

Small and medium enterprises start from different positions during project work than large enterprises or micro businesses. By conducting a discovery phase alongside an experienced business analyst, these companies greatly facilitate project work, are better at mitigating risks, can estimate their costs and timeline early, and improve cooperation between departments, which leads to a more polished product or service that caters to the needs of customers while fulfilling the company’s business requirements.

If you represent an SME and are looking for a talented development team or the support of a business analyst to help you go through an efficient discovery phase, do not hesitate to contact us.

See what else is important to make your eCommerce thrive, and check out our eBook on the 7 important tips for the discovery phase.