Washington — Many more American small businesses will "go global" using collaboration technology to transform themselves from local businesses into global trading partners, predicts Sean Poulley, VP of IBM online collaboration services.

At the U.S. Small Business Administration's National Small Business Week conference, Poulley outlined the challenges and opportunities for growth facing small and medium-sized businesses (SMBs). He addressed the top small businesses in the United States as part of the trade forum, "Going Global: Accessing New Markets," with Ambassador Susan Schwab, U.S. trade representative.

IBM points to Celina Insurance Group, Celina, Ohio, as an example. The mutual insurance carrier with 175 employees had an ongoing challenge to win and sustain agent loyalty. To compete against larger insurance carriers, Celina integrated independent agents into business processes and differentiated itself by providing superior services and support to these agents. Celina built a portal—a Web site with built-in instant messaging—to foster collaboration and speed end-to-end business processes, enabling agents to instantly connect with their Celina underwriter—or anyone else in the company—at the click of a button. With this new collaboration technology, policy turnaround times reduced from weeks to days, according to Armonk, N.Y.-based IBM.

To become global trading partners, Poulley says many SMBs need to overcome obstacles such as a lack of technical skills and access to IT that can help them work with others outside their physical locations, coordinate across geographical boundaries and locate the right people with the right skills at the right time.

Poulley says the evolution of technologies such as Web conferencing, instant messaging, software appliances and portals offered as Software-as-a-Service (SaaS) applications will increasingly enable local businesses to transform into global trading partners.

In a March 2008 INN article, technology pioneer, Bill Lowe, referenced Yankee Group analysts who estimated that 50% of software purchased by small to mid-size companies in 2008 will be delivered as services.

“These days, the Software-as-Services model is appealing to companies of all sizes, though perhaps for different reasons,” Lowe said. “As before, smaller firms may not be able to afford their own operation, while bigger companies may not want to afford one. Insurance firms of all sizes now look to outsource such major aspects of their operations as policy assembly, correspondence and statement production because their legacy document management solutions can be upgraded more quickly and economically via SaaS. Let’s face it: even big companies want to avoid making large capital investments where they can. If even a fraction of software purchases within a fraction of large firms follow the path of the small to mid-size firms, SaaS will be a huge market.”

In a recent IBM study of more than 1,200 companies, more than 60% of mid-sized businesses indicated that collaboration tools were vital to their business success and growth.

Due to current technology advances, Poulley predicts three keys will propel U.S. businesses into global markets in the next decade:

1) Small businesses will gain real-time access to work with all their employees, regardless of location, as if they were in the same room.

2) SMBs will use technology to collaborate more easily beyond their four walls and firewalls with outside partners, suppliers and customers. Extended communities will be built on the Web for small businesses that will enable them to function as "secure virtual enterprises" or large companies.

3) Simplified, self-sustaining Web 2.0 technologies will free SMBs' time and money currently spent using and maintaining IT. New tools will put the power and control of IT in the hands of the business owner without the need for specialized skills.

While the cost of professional-grade software may have hindered SMB investment in technology previously, more SaaS collaboration tools are breaking down that barrier. There is no software or hardware to buy, install, maintain or upgrade, according to IBM. By running programs from subscription-based Web sites, Poulley feels SMBs can focus on their core competencies without incurring IT maintenance costs.

"We believe collaborative technology is critical to any global trade strategy," Poulley says, "because it delivers the ability to grow, while tightly managing the operational cost increases associated with expansion.

Sources: Marketwire and INN archives

Exclusive content available only on InsuranceNetworking.com

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access