Technology could help SMEs increase profits

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Technology could help SMEs increase profits

Kathleen Hall

SMEs are seeing increased sales but are failing to convert these to bigger profits because costs are increasing. With overheads such as energy costs reducing profits now could be the time for SMEs to justify investing in energy-efficient IT.

The survey from the Forum of Private Business (FPB) found that 30% of SMEs are seeing an increase in sales, but cost rises are limiting profit increases.

Around half of SMEs have seen an increase in the cost of gas, electricity and fuel, causing a drop in profitability for 27%, according to a survey from the FPB. Systems such as virtualisation and cloud computing could help small businesses combat growing energy costs.

Phil McCabe, spokesperson for the FPB, said rising energy costs were a real concern for small business. "It basically means more money is being sucked out of small firms and transferred overseas, or over to multi-national businesses in the utility and oil industries," he added.

However, technology such as videoconferencing, cloud computing and vitualisation could help SMEs cut fuel and electricity costs, said Peter Scargill, national IT chair at the Federation of Small Businesses.

Cloud computing reduces energy costs because systems are hosted by suppliers who have more efficient systems and are able to use virtualisation to get more out of less hardware.


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