Small and medium businesses (SMBs) in the UK have increased
their
spending on IT to £22bn this year, creating a great opportunity
for IT companies.
However, while that might look like nothing but good news, most
of these SMBs expect their own sales growth to be flat, or less
than 5%, which means they will not be throwing their money around.
As such, IT businesses have to deliver very strong financial and
return on investment (RoI) arguments if they are to secure any
technology and service sales, writes Sue Hogg, director,
information worker business group,Microsoft
UK.
Companies must therefore understand the needs and language of
business decision makers. They are much more interested in the
arguments around cash flow, customer retention and the case for
driving revenues than bits and bytes. To this end, companies should
come up with practical solutions that, for example, manage
customers' cash flow and help staff be as productive as possible,
while making the most of their employees, reducing capital
expenditure and helping them to retain their customer base. But it
is critical that these solutions are communicated in the language
of business if they are to be understood and accepted.
Get this right and the opportunity is significant.
AMI-Partners, a research and consulting firm, was
commissioned by Microsoft to provide insight into the needs of the
UK's SMBs. It estimates that UK SMBs spent £21bn in 2007 on
IT/telecom products and services. This is expected to grow by less
than 5% in 2008, to that £22bn figure mentioned above. AMI's
research has also identified the top business concerns of the UK's
SMBs: competition, profitability, finding/retaining talented
employees and increasing customer satisfaction.
Supporting this, their fast IT goals are: hosted applications,
Voice over Internet Protocol (VoIP), and increased
communication and collaboration, both within and between office
locations.
These findings are a powerful checklist to help IT companies
exploit the SMB opportunity. SMBs can use their investment as a
recruiting tool, to attract and retain talented employees, and
fight their corner against multinationals. However, such an
approach needs an enlightened view on the use of IT.
IT companies can help their customers to understand how they can
take advantage of recently launched offerings, including those
technologies that were once out of reach of SMBs but have now
become widely available and have evolved specifically in response
to SMB needs. For example, VoIP is a technology that was once the
exclusive domain of the enterprise, but it now offers a significant
opportunity for SMBs to reduce communications costs, and is very
easy for small businesses to set up.
Moreover, collaboration and communication between offices is
going to be a key issue for the IT industry to solve effectively in
2008. According to AMI, 21 per cent of SMBs with between five and
250 employees are looking to add branch offices in the next year.
This concept of communication between offices can be viewed as a
classic cost containment issue, and it can be very revealing to
look at what choices and what decisions and trade-offs customers
have to make with their investments. Research by Microsoft and
Durham University has revealed that SMB firms that have grown and
focused on growth make use of IT to a much broader extent than
companies that are not experiencing growth. However, it is clear
that while many non-growth companies would like to spend more on
technology, a narrow focus on cost control and internal challenges,
such as compliance, are not enough to deliver business growth.
Understanding these financial and organisational constraints can
help 'switched on' IT businesses sell to SMB customers, and an
exciting opportunity exists for those businesses that are willing
to help SMBs grow and succeed through a consultancy-based
approach.