skip to main content
George Groves
Technology Journalist

George Groves is a writer interested in all forms of technology, creativity and digital trends

George Groves
Technology Journalist

George Groves is a writer interested in all forms of technology, creativity and digital trends

Plan for the future and make sure your business can adapt to change as we explain the importance of scalability

Business models can be split into two overarching categories: scalable and structural. While the definitions of both vary by source, essentially scalability is a business model where incremental costs decrease as revenue increases.

Trying to scale business is a big undertaking, but integral to the success of a business if the aim is ongoing growth. All areas of the business must be taken into consideration when understanding how to scale up: from human resourcing and information technology, to marketing and the product itself.

So what does scalability mean for two of the most important assets of any business: its product and its people?

Bridge viewed from above

Agile product delivery

At the core of every business is what it sells, be it a product or a service. And much of the innovation, from a technology point of view, is around allowing businesses to deliver their product or service to customers with as little friction as possible.

Possibly the most notable innovation in delivery has been the music industry. Looking at the history of music delivery systems, we’ve evolved from listening to live performers, to listening to recordings on physical and digital media to now streaming from the cloud.

The industry’s history of innovative delivery offers all small businesses a valuable lesson in adapting. Keeping ahead of technological advances enables scalability, and Australian businesses are already harnessing scalable product/service architecture using technology like telepresense or utilising connected mobile salespeople.

One of the big drivers of scalable products has been the growing availability of the National Broadband Network (NBN) and a fastbroadband infrastructure more broadly. Fast broadband is helping businesses, particularly those reaping the benefits of eCommerce, in the form of being able to download more and get support on applications as diverse as cloud collaboration and video conferencing.

Scalable businesses experience less friction in growing, particularly in areas such as eCommerce, software as a service (SaaS) and other evolving forms of distribution.

Agile resourcing

In Roger Hallowell’s “Scalability”: the paradox of human resources in e-commerce, published in the International Journal of Service Industry Management, he explores why many businesses in the US failed in the late 90s.

The bursting of the dotcom bubble was driven by a number of businesses investing in fixed-cost investments (such as their websites) instead of investing in agile resource allocation necessary for effective service delivery.

One example Hallowell cites is an online toy retailer, eToys. With heavy investment in its web presence, it quickly gained millions of dollars worth of orders. But due to a lack of planning and agile resources management in human resourcing, it was unable to keep up and 10 per cent of its orders were left unfulfilled.

Customer service also suffered, with hold times of over 20 minutes and emails left without a response for days. As a result, eToys experienced a quicker and harsher stock price decline than its peers in the crash.

Professor Lee Dyer of Cornell University also acknowledges the value of scalable human resourcing in his paper In Pursuit Of Marketplace Agility published in Human Resource Management where he suggests that many firms stumble in their efforts to keep pace due to lack of organisational capacity.

One of the outcomes of Dyer’s studies was the need to look at staff that aren’t performing and find ways to increase their productivity or find new staff. This stops the company from losing money while preventing staff from becoming stagnant. Businesses should take care to avoid creating a toxic environment by facilitating any staff turnover with humanity.

Modern advances in HR processes such as Workforce Guardian are making agile resource planning available to both large and small companies, particularly by reducing time required to produce employee and freelance contracts, and making HR guidance available at the click of a button.

Leverage tech to help you when scaling up
Consider how technology can help take on some of the heavy lifting at every stage of your business journey – and before you implement new digital tools, keep scalability in mind. There are plenty of business apps and programs that can help with everyday business processes (to make the way your business operates more efficient), but it’s important to consider how and if they integrate, and whether you might outgrow their capabilities. If you’re looking for help with your tech, get in touch with a Telstra expert today.

A lesson in scale

  1. An infinitely scalable business isn’t always viable. Understanding your industry, your customer base and where opportunities are (and aren’t) can help you identify the ceiling for a scale up business 
  2. Identify scalable areas of your business to reduce operational costs. Look at how technology can facilitate efficiencies and scalability. Solutions exist in admin, marketing or product/service delivery
  3. Have a comprehensive business plan. A good plan sets out goals and helps you identify where you can scale up for the future and how you’re going to get there 
Boost your website, content, SEO and more

Telstra Business Website Services can help you thrive online.

Find Out MoreBoost your website, content, SEO and more
Trends
How to spot a gap in the market: The minds leading the non-alcoholic drink movement

Paying attention to evolving customer needs is essential for any small business. Australian drinking culture has been changing over time. The Australian Institute of Health and...

Productivity
Productivity
How to upskill on a budget: Our guide to the best online courses

Training and upskilling can be a great way to keep your employees inspired. It can also help to fill any knowledge gaps for small business owners – like you – who wear many hat...

Growth
Growth
Selling… on TikTok? The surprising success of these Aussie brands

Since launching in 2016, TikTok has become a social media giant. The platform is a destination for unparalleled viral reach potential, where unknown users with one popular vide...

Growth
Growth
How Freddy’s Pizza harnessed delivery platforms while keeping their in-store customers #1

Third party delivery platforms like Uber Eats play a big part in how customers find and interact with small hospitality businesses. But they have their pitfalls. Freddy’s Pizza...