Procurement without pain: a small-business guide

Anyone, but especially owners of small and medium businesses, should do two things before they buy...

Anyone, but especially owners of small and medium businesses, should do two things before they buy IT equipment: make sure they really, really need it, and then work out the total cost of owning it - the very high cost of running some systems can come as a shock.

This is the advice of author David Nickson in his new book, IT Procurement Handbook for SMEs, which the British Computer Society has just published.

Nickson told Computer Weekly that the book was aimed at people who are neither IT experts nor procurement specialists.

"You could say it's all about how not to buy stuff you don't need," he said.

Nickson said the SME sector spent an estimated £12bn on IT last year.

IT was the heart of most small businesses, mainly because of the internet and e-mail, he said. "Big companies can recover when things go wrong, but it can be fatal for SMEs."

Many small businesses are one-man bands, and few employ more than 10 people. "There are very marked differences with respect to IT in what these micro-companies can do and the next size up," Nickson said, "but there are much fewer differences between the medium and large companies, other than bargaining power."

To keep costs low, Nickson advised small businesses, especially start-ups, to consider online services such as Google Docs and Microsoft Office Live, or Sun's free Open Office software.

"The only problems then are network access - which in an emergency can be dealt with through internet cafes and mobile phones - and security, which encryption will address," he said.

Those who needed to buy anything more should look very carefully at their precise needs, Nickson said.

"For example, every small business needs a printer. But these vary from photo-quality inkjets to low-cost lasers. The choice depends on what kind of image you need to create with your communications."

After printer equipment has been matched up to need, total cost of ownership is the most important factor. Nickson said some printer companies applied the "Gillette principle": if you give away the razor, you can make a lot of money sellling blades.

"The capital cost of the printer unit may be a very small fraction of the cost of ink cartridges over the life of the unit," he said. "Depending on your expected print volumes and printer lifespan, you might come to very different decisions between an inkjet that doesn't cost much to buy and a mid-range colour laser."

The IT Procurement Handbook for SMEs by David Nickson is published by the British Computer Society. ISBN 976-1-902505-98-5. Price £25 for BCS members £29.95 for non-members.

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