For smaller businesses, the process of selecting IT
suppliers, products and services can all too easily turn into an
extra management burden, although the aim is, of course, to make
their organisation more effective and productive.
Unlike their larger rivals, SMBs often cannot afford the time
and personnel needed for complex contract management or selection
procedures.
There is certainly no shortage of information for SMBs choosing
IT products and services. The challenge is to weed out the guff and
get to what is relevant. Fortunately, there are well-established
guidelines from a range of well-regarded organisations that will
help small businesses assess their needs in terms of the size,
scalability and cost of investment, as well as providing advice on
financial considerations, how to put a business case together and
training for new systems (see box, top right).
Even in SMBs with in-house expertise, the IT director is often
best served looking for long-term partnerships with reliable
suppliers to provide fast, responsive support, rather than a series
of one-off deals where they would have to take on more of the
maintenance and integration burden themselves.
This means SMBs will need suppliers or partners that will be
around for the long haul. Although it might at first seem logical
for smaller firms to work with smaller suppliers for whom their
business will be important, many SMBs have found it more effective
to choose well-established bigger suppliers.
This, in turn, means a cultural fit is crucial. An SMB will not
be the most important customer for a supplier in terms of financial
return, so it is essential to work with those companies that treat
them as important customers, rather than as a sideline.
Nigel Hedley, managing director of systems house Azur, which has
implemented business systems for SMBs for 20 years, says experience
counts. It helps for the supplier to recruit staff from industry so
they understand the issues facing customers.
"We appreciate the significance of the IT project to the SMB's
business," says Hedley. If projects go wrong, the business can be
at risk. The aim for a supplier, he says, should be to form a
lasting relationship with customers by not treating their projects
as one-offs.
The selection criteria used by most SMBsin assessing potential
suppliers are practical and straightforward. Technical expertise is
a must, but SMBs also need to look at reputation, financial
stability, market position and track record.
"Market position is important," says Alan Downs, financial
director of Scottish textile manufacturer J & D Wilkie (see
box, bottom right). "It helps if I know a firm is highly rated. You
cannot get rid of financial insecurity altogether, but it is more
comfortable." When Downs opted to use Azur to implement a new
accounting system, the supplier's knowledge of the product was
important, but also crucial was the reseller's expertise in the
manufacturing sector, which meant the firm was able to gain
benefits from the system very quickly.
So SMB IT directors should not be afraid to ask prospective
suppliers whether they are properly resourced in terms of finance,
expertise and support and whether they offer any favourable finance
deals in general or for SMBs in particular.
Reference sites are useful, but are taken up less often than one
might expect. Those making the purchasing decisions within SMBs are
often owners of the business or senior managers. They may have IT
experience, but may not have formal training and might rely more on
their own "feel" for the market.
"The research we have done in the past suggests that among the
companies that do take up IT, it is not the small companies but the
medium-sized companies that tend to be more wary," says Jeremy
Beale, head of e-business at the Confederation of British
Industry.
"Many medium-sized firms are still privately owned and there is
often a greater scepticism about making unproven investment,
especially when economic conditions are tight. The attitude in
firms of this size is that they will probably be OK. So there can
be some fairly conservative attitudes in some cases."
Beale also says that the level of in-house IT expertise does not
always depend on the size of the business. Many very small firms
have considerable expertise if they are working in technical areas
themselves.
Medium-sized educational institutions also tend to have greater
IT expertise. Plymouth College of Further Education has an in-house
IT team of 23, providing the college with substantial internal
resources when it comes to drawing up specifications for new
projects.
Chris Zisimides, the college's network manager, takes a robust
view of his suppliers. "The companies we deal with are very good,"
he says. "They are not the only suppliers we could deal with and
they know that. We use Dell a lot, but as good as it is, it is not
the only fish in the sea. Our Cisco resellers are brilliant if we
phone with a problem. They get their teeth into it and they keep in
touch. I think suppliers have to be like this because the market is
cut-throat."
The college likes to use local firms where possible. "We try to
use local businesses, because they can usually provide equipment
for us quickly, off the shelf," says Zisimides. "That may be a bit
more expensive, but we get the kit that day." When placing larger
orders, Zisimides usually looks for up to five quotes. "The main
criteria are price and delivery," he says.
By being flexible the college was able to manage in a situation
many SMBs fear. One of its suppliers, which was providing
components from an international manufacturer for the college's
wireless network, went out of business. Zisimides says, "I went to
the manufacturer's website and they put me in touch with their UK
distributor, who could not supply us directly, but gave us the name
of four or five resellers, one of which, Skynet Systems, we were
already using. So it worked out fine."
Comparing products and services can be carried out in a range of
ways. Downs, of J & D Wilkie, uses reviews and articles in
papers and magazines to give him an idea of the background for
specific areas and also talks to colleagues in similar firms for
advice. He has used consultants in the past, but prefers to carry
out supplier selection himself.
"Consultants can be very expensive," says Downs. "It depends on
how much time you have. With our latest purchase, I felt I had the
time to carry out the process."
Whether they enjoy in-house IT resources or not, smaller
companies are becoming more demanding customers with the same needs
as larger firms. They are looking to IT to make their businesses
more efficient, and with a keen eye on the costs, they are
well-placed to take advantage of a highly competitive market.
Suppliers take note.
BOXTEXT: Where to get the gen
Business Link
The government-backed Business Link organisation has a national
website as well as regional organisations with their own websites,
all with advice and factsheets on some of the basics of setting up
an IT system, including hardware, software and working with
suppliers.
www.businesslink.gov.uk
Federation of Small Businesses
www.fsb.org.uk
Department of Trade & Industry
www.dti.gov.uk/bestpractice
Scottish Enterprise
www.scottish-enterprise.com/sedotcom_home/
services-to-business/going-online/factsheets.htm
Small Business Guide
www.smallbusiness.co.uk
Case study: Partnership in practice at J & D
Wilkie
Alan Downs, financial director of Scottish textile manufacturer
J & D Wilkie, has two guiding rules when it comes to working
with IT suppliers: use one-stop-shops and don't put all your eggs
in one basket.
Since the two tend to cancel each other out, Downs has found a
balance. He uses one partner for his firm's core accounting and
administrative systems and another for all the e-mail and internet
support. "That works very well," says Downs. "They do not cross
paths, but they know each other. I have had bad experiences in the
past with suppliers blaming one another for faults, which is why I
like a one-stop-shop, but I also like to have more than a single
resource. "
J & D Wilkie has little in-house IT expertise, which is
another reason for choosing supportive, reliable partners.
"Partnership is vital," says Downs. "I want to be able to ring a
supplier who is familiar with us and what we do."
When selecting partners, Downs has a number of criteria.
"Usually I go to about five companies and get some quotes," he
says. With a rough idea of his budget, Downs will whittle down on
price, but other factors then come into play. "I will then tighten
up on my criteria," he says. These include one-stop-shop support, a
good track record, the size of the business, whether it has a broad
knowledge base and how professional the company is when presenting
itself and its products.
When it comes to getting advice on IT products and services,
Downs talks to existing suppliers, his peers in the accounting
world and the company's auditors. He has little or no contact with
business organisations such as the Confederation of British
Industry or a local chamber of commerce. "I probably should do that
but I don't."