A survey by network provider Alcatel shows that nearly half of SMEs still need to use an ISP to run their e-mail, and that almost a quarter are using IT in only its barest form.
Peter Scargill, national IT chairman of the Federation of Small Businesses, was not surprised by the survey's results.
"The vast bulk of SMEs [95%] employ under 10 people, and many of those are one or two person companies who are unlikely to have IT experience or the time to acquire it," he said. "Many simply do not have the people to make better use of it. Consider for example the retail trade most available training happens during the week in work hours."
Cost worries are a major factor in SMEs avoiding advanced IT, with a third of businesses looking for reduced costs.
Scargill explained: "Most SMEs are still using modems or ISDN and only a handful of providers offer fast, 24-hour connectivity that is suitably low-cost for small companies and, of course, by location, many of these firms cannot access services anyway - particularly in rural areas."
Despite these problems, the Alcatel survey revealed that SMEs are willing to embrace new technologies and use IT to compete with larger companies.
Richard Pitt, Alcatel UK director of e-business, said: "SMEs recognise the importance of IT and are in need of the benefits of an improved IT system, such as cost and management reductions. However, as our survey shows, IT managers don't know how to get these benefits, and until now have not been provided with the technologies that will enable them to fully embrace IT."
Peter Scargill added: "It will take a continuing effort on behalf of the government and those agencies and companies providing training to target their efforts at the very small companies that make up the bulk of SMEs and who have very little time available."