Helen Beckett examines how SMEs respond to emerging technologies in our third report on exclusive research into how small and medium-sized enterprises view and use technology
Small and medium-sized businesses can be slow off the blocks when it comes to implementing IT but, once their enthusiasm is kindled, they often prove to be the most adept and agile exponents of new ideas. Certainly their appetite for information is voracious, with 62% of respondents to the Computer Weekly/BT SMEAudit deeming this to be a priority.
Commentators agree that the increasingly wired fabric of society and business has quickened SMEs' interest in what technology can do. David Bunting, treasurer of the Communications Management Association, says, "The principle of internet access is almost taken for granted."
The value of broadband in speeding up internet access was widely acknowledged by the respondents to the SME Audit: 62% said it was a primary reason for adoption, compared with 26% who saw it as an enabler of teleworking and flexible working. Only 8% and 4% respectively see the main advantage of broadband as providing a gateway to managed services or enabling a faster web site.
The Federation of Small Businesses acknowledges that the internet has ushered in a new era for SMEs. Stephen Alambritis, head of parliamentary affairs for the federation, says, "We estimate that 80% of all businesses have everything they need to operate within a 50 mile radius. But the internet has meant the death of distance and SMEs can now reach out to the wider world."
This access has brought fresh technology challenges. "Companies are falling foul of the technologies that are required to join business-to-business exchanges," he says. "Increasing numbers of purchasing departments are using these exchanges and SMEs need to be up to speed on Bacs [for bank transfers] and electronic invoicing in order to tender and compete in these exchanges."
Bunting believes that internet access is just the start. He sees SMEs embracing much more exciting opportunities. "SMEs are starting to look at second-generation issues, such as using intranets and extranets proactively to hook up with customers and suppliers. Providing privileged access is the next big growth area, and while it is still a bit unusual, it is by no means a show-stopper."
Coupled with the pervasive use of the internet is the arrival of personal digital assistants and laptops at a price that does not exclude SMEs. The growth of wireless communication could make a big difference to smaller businesses, says Bunting. "Suddenly people are not tied to a physical location. Broadband over mobile is as important as broadband over fixed access for the small business. Their office is wherever they are. The ability to pop into a cafe and download a presentation, file or customer document can be invaluable."
Voice and data convergence, too, is becoming a more common feature of the SME landscape. Alexander Linden, emerging markets analyst at Gartner, says 30% of all business network installations host voice over internet protocol, and the Computer Weekly/BT SMEAudit revealed that 10% of the sample have deployed integrated voice and data technology. This brings it close to 15% adoption, at which point a technology is no longer "emergent", says Linden.
Although it is usual for large enterprises to be early adopters of emerging technologies because they have the resources to investigate and execute, "For every technology that exists in a large enterprise, there is an argument for its adoption in the medium-sized business," says Linden.
Other voice and data technologies are becoming mainstream, including computer telephony integration (CTI), unified messaging and caller ID, all of which bring productivity benefits, he says. Being confident of achieving a business return on a technology that claims to offer cost savings is a key factor in whether SMEs follow through on their initial interest to implementation.
It is hardly surprising that SMEs prefer their kit to be tried and tested before they take the plunge. One technology they seem to be unconvinced about is free, or open source-based software. Half of the respondents said they had investigated using open source versions rather than sticking to Microsoft, of the remainder, 19% said they were planning to look at open source next year.
Eddie Bleasdale, managing director of Netproject, applauds the independent thinking of those that have considered the open source option. "A lot of IT managers got where they are today by simply buying Microsoft and deploying it," he says. "These people are dependent on their suppliers to tell them what to do."
He says IT managers or company directors with no knowledge of computing architectures are more likely to be led by suppliers which have an interest in selling Microsoft products. That will have a major effect on SMEs. "A lot of people are sick to death of changing their desktop every two years because Microsoft wants to upgrade. They cannot cope with that rate of change."
Bleasdale's view is not shared by analyst Andreas Bitterer, vice-president of Meta Group. He says although open source is seen as being inexpensive, the cost of the platform and operating system represent about 15% of the total cost of ownership. "Often Linux is used for internal development and testing but when it comes to running a mission-critical application on a supported platform, people are likely to turn to suppliers that can offer that support. If it is Linux, who do you call?" he asks.
While SMEs appear eager for information about emerging technologies, naming it as their top priority, there is no evidence that this interest is being converted into implementation. "When it comes to implementing anything, this section of the market is slow," says Bitterer. But UK SMEs have the edge over their continental peers because the first version of any software is invariably produced in English.
This was first published in October 2003