The small business manager is understandably wary of trusting advice and purchasing recommendations of the supplier community. After all, suppliers have a clear agenda to sell products or services. They are duty-bound to recommend portfolios. Small-to-medium enterprises (SMEs)fear this is done without regard to genuine suitability or with any concern for the long-term survival of businesses.
Yet provided their agenda is kept in mind, product suppliers can be the best source of information. Who else is as familiar with advantages and disadvantages of options facing the SME decision-maker?
Often strapped for cash, SME managers set out not to pay for IT help and advice. But this strategy can be unwise. It can send the SME into the arms of a supplier who is sufficiently independent. So, despite having a limited budget and lacking the funds of larger enterprises, SMEs should be prepared to pay for independent advice. The reality is payment should be unnecessary. There are various sources of government-funded information and advice. Newsagents and bookshops are bursting with IT publications full of advice. Many suppliers are not as bad at giving independent, unbiased advice as some cynics think.
Managers in large corporations are less concerned than SMEs about accepting help from suppliers in making purchasing decisions. This may be because they feel they could buy independent consultation if they wanted. But even top consultants are tied to product suppliers and have undisclosed alliances. Paying for consultancy does not ensure more independence than suppliers might give. Vendors have the advantage of working with real small businesses daily.
The problem is that small companies may feel at a disadvantage. Since they don't have the purchasing power of large corporations they might think they will be more vulnerable to be given biased advice. One solution is to talk to at least two competitors so you stand more chance of making an informed decision. However, juggling suppliers can be dangerous. The effect of disloyalty can be higher prices.
A good maxim is to ask smaller IT suppliers for advice on the assumption that they will understand the needs of the SME customer more clearly. These suppliers are regarded as more trustworthy and independent than large supplier companies. The latter have a reputation for compromising their integrity by recommending unsuitable products for the sake of meeting sales targets. Smaller suppliers are also more likely to preserve the relationship and business of their SME customers, and recognise that honesty, at least in the short-term, that pays dividends in long-term business.
This is the view of Colin Boag, managing director of JBS Computer Services. He says, "SME customers find the best advice comes from firms like themselves. They understand the unique commercial pressures facing SMEs and know they have to measure return on investment in terms of months, not years."
Even better is choosing a re-seller which provides systems based on several products. That way, not only do you get the best, you get one supplier to blame if there is any lack of interoperability.
Part of the problem is how large companies can make SME customers feel overlooked. Boag says, "SME users don't always want to be sold 'lite' versions of corporate systems. They need systems designed for SMEs."
Another issue is that salespeople of corporate IT suppliers don't understand the language of SMEs and try to oversell through jargon. "SME customers want to talk about real business issues and potential benefits with people in the same world." Again, resellers can help provide a bridge between large suppliers and SME customers.
The trouble is SME suppliers and resellers cannot afford to give endless free advice to customers. Larger supplier companies have been known to offer "free" advice with costs hidden in bills for larger customers. The SME can expect a routine pre-sales cycle of most suppliers and resellers to include appraisal and consultancy. Alarm bells should ring if it appears rushed, pushes specific products and fails to take into account the long-term view.
Peter Williamson, head of e-business at e-collaboration systems company Intentia, says, "Everyone has an agenda. But businesses recognise it can be worthwhile to bundle help and advice as part of the sale. Even if it means the sale takes longer and costs more."
Reading the IT press
Any SME is asking for trouble by approaching a supplier and asking for help, intimating there may be a sale further down the line. An adequate level of knowledge can be gained by reading the IT press, which offers advice on IT procurement. Start by buying product and management strategy magazines and spend time making notes.
The next step is to discover what IT equipment is available. Appraise the system requirements as understood, and consider training and support needs. It is important not to abdicate responsibility: there has to be someone in-house to read the press, talk to suppliers and resellers and come to an informed decision.
Rick Marshall, executive director with communications and networking supplier Syncra, says, "Regardless of where you get the information from, you have to start with a clear picture of what you have and want."
This should prevent you replacing a system that doesn't need changing, and should guarantee the foundations to improve and develop the business in future.
Once fully armed with a clear assessment of what the business needs, the SME can start by contacting a few suppliers, such as 3Com or Attachmate, that provide the core products required for many solutions. Many suppliers make specific efforts to help SME customers.
JBS Services offers a free book, Choosing The Right Computer System, or you could go to an information portal site like www.ehook.co.uk, which offers low-cost marriage services between suppliers and SMEs.
Mark Malley, managing director of ehook, says, "The problems facing SMEs wanting to improve IT are overwhelming. For an SME, the consequences of a wrong decision based on biased or uninformed advice can be catastrophic."
The key is seeking a supplier which regards itself nearer to a partner than supplier. Only then can you expect advice offered to be reliable and good value.
Jonathan Wagstaffe, managing director of Fast Track 100 Consultancy, says, "You hear about partnerships but it's important for SMEs to realise they apply as much to them as to big companies."
A partnership approach does not guarantee unbiased advice, says Wagstaffe. But the advice is more likely to be sound and appropriate.
"Of course, suppliers are focused on their own products," Wagstaffe says. "Their resellers will have preferred solutions which obviously utilise products from suppliers which have authorised and approved them. This does not mean advice is bad or wrong. The resellers will focus on client relationships and this will drive them to provide known and trusted working solutions to SME customers."
He adds, "The pace of change means no SME can afford to perform extensive independent evaluations of alternative product offerings. By the time the evaluation is completed, the product or business need will have changed anyway."
So, there is a need for the SMEs to check on the credibility of suppliers and resellers. Wagstaffe says, "My advice for the SME is to consider providers of their IT systems. Are they addressing business needs? Can they show how their solution will make a difference? Can they show a tangible return on investment? These are more important than if they are truly independent."
It is more important that the solution the SME opts for delivers competitive advantage, on time and to budget. "Everything else is secondary," concludes Wagstaffe.
Advice from the Web
Hints and tips
n Look for the suppliers that point out their bias from the outset
n Look for the suppliers offering a long-term partnership, indicated by access to their intranet and assured long-term support
n Ask for proof of satisfied customers, and talk to them yourself
n There are often several ways to achieve an IT objective - there may not be a right or wrong way
n What seems like a cheaper way may turn out to be more costly
n Be sure you are comparing like with like
n Visit the sites of your supplier's competitors - shop around for information and advice as well as for products
n Ask to see the service and support contracts, and read them closely.
This was first published in December 2000