SME focus shifts from product to process

Smaller customers are looking to use technology to improve business processes as their spending on hardware and software slows

If the improvements in the UK economy saw SMEs spend on hardware and software last year then the theme of what's left of 2015 will be looking to lean on those investments to improve productivity.

The latest GE Capital Capex Barometer has predicted a halving in hardware spending from £10.1bn in 2014 to £5.3bn this year and a decline on the software side from £7.8bn last year to £5.3bn.

The reasons for the slowdown in spending include the lack of a need given recent upgrades and a strategy of turning the focus on business processes.

The would tie in with a lot of talk in the industry about the need for 'business insights' and 'real time analytics' as firms of all sizes look to mine their own data to find nuggets that will help guide current and future strategy.

GE Capital found that UK SMEs are planning to create 737,000 jobs this year and those that do continue to invest in hardware and software are doing so to enhance efficiency and productivity.  

Gabriele D’Uva, UK Managing Director - Equipment Finance Business at GE Capital, said that it was expecting this to be a year when customer behaviour changed.

“2015 could be a watershed year as investment preferences shift towards service-led IT models," she added that from its point of view it was also noticing some changes in the way finance played a role.

"An increasing number of businesses are looking for more flexible ways to help them keep up with the latest technologies, with the emphasis on usage value rather than ownership.  This explains why leasing, which offers the flexibility to maximise the value of equipment over the life of a financing agreement, is growing in popularity," she said.

The GE Capital findings echo recent advice from Syscap which has noticed the same trend and has signed up more than 30 resellers and ISVs as clients in the last quarter on the back of a relaunched partner programme in April.

Philip White, managing director of Syscap, said that it had “seen a sharp increase recently in the number of IT providers needing more flexibility as they change their own business model to a subscription base or need to help their customers reinvest in IT to innovate and grow".    

Even with finance playing more of a role there continues to a need for customer education around the options with provider LDF calling on resellers last month to get into a position where they could provide greater levels of advice to customers.

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