Small- to medium-sized businesses (SMBs) make up the
rump of British business. Some 99% of UK companies employ fewer
than 250 people and together they account for the largest
proportion of gross national product. Unfortunately for them, they
have tended to get something of a bum deal when it comes to
technology.
Manufacturers and resellers have long courted big corporates,
leaving everyone else to struggle through a welter of information
on competing products and technologies pretty much unaided.
Unused to handling the many and varied demands of small business
and spooked by having to deal with technology virgins rather than
dedicated IT specialists, they have offered SMBs scaled down
versions of kit popular with the big boys, sold them unsuitable or
overcomplicated systems that they lacked the expertise to maintain,
or left them to their own devices. In addition to this, after sales
service has become an oxymoron when it comes to SMBs, as many feel
they are treated like second-class citizens.
The result, unsurprisingly, is that SMBs feel let down by the IT
industry and a significant proportion of them have failed to
exploit technological advances that could help them to improve
their business performance.
That said, there's money to be made from them and lots of it,
given the right approach. Total European investment in IT is
predicted to rise from £43bn in 2002 to £62bn this year, according
to Datamonitor.
Recent research commissioned by Cisco highlighted many of the
same areas of concern thrown up by previous studies. The survey of
400 British SMBs employing 10 to 250 people confirmed that 42% feel
left in the lurch after buying technology thanks to insufficient
after sales support or training. The second largest issue, which
affected 41% of SMBs, was having enterprise scale technology
imposed on them rather than being offered products that were
tailored to their size.
"The thing that concerned us was that SMBs didn't have a trusted
advisor that they could turn to when they are looking to purchase
information technology and communications technology," says Steve
Frost, market manager for Cisco SMB solutions in the UK and
Ireland.
"The ideal combination is a local presence -¬¬ and most small
businesses need someone that is on the doorstep - with the back-up
of a big brand to provide the knowledge and support, and therefore
that comfort factor and peace of mind. It typically hasn't been
available to small companies to any wide degree and where it has,
they haven't necessarily been aware of it.
"There hasn't really been the education and awareness of the
options for a small business, so where do they turn? Who do they go
to?," Frost continues. "The solutions haven't been there. It is
down to the industry to provide that combination of local presence
and national or global brand and to create tailored solutions for
SMBs and then to tell them about it."
Frost refuses to point the finger of blame for this situation in
any particular direction, but reading between the lines it would
appear that both manufacturers and their channel partners are at
fault.
He observes, "Clearly another role of ours is to re-educate
channel partners to see the opportunity [for SMBs] as well. The
survey unearthed some concerns and it is our role to make sure that
we can address those fair and square.
"We feel that the efforts we are making to train and support
local IT and communications technology partners will help to at
least to give these small- to medium-sized customers somewhere to
turn when they want to make buying decisions."
One of the other concerns highlighted by the research is that more
than one in 10 small business leaders rely on gut feeling rather
than a structured, informed approach to IT investment.
"The survey showed gut feeling was one of the main steps in the
buying process, which clearly isn't the right way to go," Frost
says.
"Rather than going through a formal process of selecting the
best product, the best support, the best service, it is very often
just an instinctive reaction based on a personal recommendation
from a friend or business colleague, which obviously isn't always
the best recommendation.
"They haven't really been shown a better way to make these
purchases," he continues. "It is almost a consumer mentality: you
want to make a purchase but you don't have the buying power or
pulling power of a large organisation, so you tend to default to
looking on the internet or even looking in the Yellow Pages for a
local company. That means there is an element of pot luck in that
decision process."
What's more, SMBs buy in a very disjointed way. They buy
products rather than solutions and in some instances elements
rather than products. Frost explains, "They say 'I need a PBX' and
they'll go to a local reseller who may have been chosen on personal
recommendation and [buy the] PBX in stock.
"They need a Lan so they go to a local IT reseller for it. I
don't think they will be aware of whether the product is best of
breed or just lowest price. That stems from the fact that most SMBs
are not aware that there may be other options, better options.
Rather than buying a PBX, a Lan and a router, why not buy a single
solution that does the whole thing?"
Making SMBs aware of what's on offer then is a priority, but
that involves a whole new set of challenges for manufacturers and
resellers used to dealing with IT professionals. According to the
research, 36% of small businesses don't have an IT manager, and IT
management is left to either the business owner (17%), the managing
director (15%) or the finance department (12%).
These people are time poor with limited attention spans for geek
speak and a fair degree of cynicism when it comes to being sold to.
They don't want flashy presentations, lengthy written proposals or
a series of meetings - they don't have time - and they are
suspicious of firms that have been previously corporate-focussed
and have suddenly seen the SMB light and now want to devote
themselves to the little guy.
"The best way to approach companies that really don't get this
is to show them examples of companies that are succeeding and [how
their investment in technology is] making an impact on the bottom
line, whether it is cost savings or increased sales," Frost
says.
"The industry needs to take a more consultative approach,
looking at a business requirement and matching a solution to it. If
we have been through a process of understanding [an SMB's]
customers, its supply chain and so on, we can then create a
solution with a proven business case and often a proven payback -
hard benefits that can be quantified on the balance sheet."
Cisco has amassed case studies and success stories from SMBs in
various sectors. "There's great value in being able to see fellow
businesses - be it companies of the same size or in the same sector
- having done something. It mitigates the risk; it proves that it
is a safe thing to do. You show an early adopter that's succeeded
and as you move into mass market other businesses follow and gain
the same benefits," Frost says.
"The case study and reference approach is very successful."
To back up that approach the company also has a set of online
tools to "lead [SMBs] through a road map and show them the business
benefits with their own organisation".
The Cisco survey wasn't all doom and gloom - far from it. A
large number of small businesses are investing in high performance
advanced technologies. Some 92% have bought into high-speed
broadband internet connection, 52% have invested in information
storage and 29% have embraced Voice over IP (VoIP).
Asked how they'd spend a £20,000 windfall, 37% said servers, 34%
wanted PCs for staff, and 25% voted for VoIP. Only 10% said they'd
spend it on office space and furniture and just 2% said company
cars.
In addition the survey demonstrated a high degree of confidence
in IT among SMBs. For instance, 77% said it improved customer
service, 76% cited improved productivity and 45% saw technology as
enabling them to compete on a level playing field with
competitors.
"We see an opportunity. New technology - VoIP, IP communications
- has been adopted by large corporates en masse over the last two
or three years and we're now taking that same story about
additional productivity and cost savings to SMBs. The technologies
are now mature and the right size for SMBs so there is absolutely
no reason why they shouldn't be deploying it and enjoying the
benefits," Frost says.
"It is time now to start looking at the positives and benefits
of IP technology; to go beyond the basics and look at how it can
benefit SMBs and their customers."
The more SMBs can be encouraged to exploit technological
advances the better it is for the British economy. The challenge
remains convincing them that manufacturers and resellers genuinely
understand the idiosyncratic nature of small business and the
demands that puts upon them and their technology requirements.