There is no doubt that large organizations today simply could not function with their IT. The cost, indeed the ROI of particular IT systems might be questionable. But empirical evidence (eg from benchmarking by consulting firms like The Hackett Group) shows that higher levels of automation do improve both efficiency and effectiveness.
But for small and medium-sized businesses (SMBs – say those up to 250 employees) then this is not so clear cut. Clearly some IT is very valuable – such as a website to allow a small company to reach a wide, even global, audience for its customers. But IT can cost a lot. Without wide-ranging in-house skills a lot of time and money can be burnt on solutions that prove ineffective, or on vendor-mandated upgrades to systems that were working pretty well already. Companies can easily struggle with networking issues, interfacing problems and seemingly insurmountable bugs. Often, one hears comments to the effect that “this IT stuff is just a pain….weren’t we better off without it?”.
So it was very interesting to see a solid affirmation of the strategic value of IT from a group of leaders of SMBs. This was a key finding of a study we at PAC recently conducted with Knowledge Peers, an organization with a large membership of senior managers in SMBs – particularly fast-growth companies.
Source: PAC/Knowledge Peers Survey of IT in SMBs, 2011
After all, there are very many SMBs – over a million in the UK even excluding those with only one employee – and SMBs account for around a third of all IT-related spending.
Perhaps unsurprisingly, the SMBs are using IT for internal purposes, and for customer-facing activities such as web sites and CRM. More interestingly, our survey respondents were advanced in using technologies like mobile to enable virtual and remote working: almost all the companies allowed home or virtual working for some or all of their staff, depending of course on their roles and responsibilities. Around 85% said that this helped to give a more motivated workforce, and around 20% said it helped to reduce overheads. They were also generally happy with a “bring your own” policy for staff using mobiles, and laptops – only around 20% said they actively discouraged BYO and around one-quarter actively encouraged or expected BYO.
Of course small firms have issues with IT – battling incompatible packages, problems with staff skills and the like. Given their strong view of the importance of IT, this seems to us to represent a big opportunity for service providers who can understand needs of the SMB sector. They need to set out how they can alleviate skills issues at a price and predictable cost model acceptable to small and medium-sized organizations. They should bear in mind, too, that the responsible person will not be a technician but the business leader, likely the CEO/MD, so messages should not be technical but business-focused.
Philip Carnelley, Research Director, Pierre Audoin Consultants
For more details of the PAC / Knowledge Peers study of IT in SMBs, contact esme.jones@knowledgepeers.com or contact the author p.carnelley@pac-online.com
You can also download a recent Knowledge Peers Talking Guide on 'Web Enabled Growth' here.
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