Technology in tough times: preparing for economic downturn

Microsoft research has shown that 76% of business owners have made no provision for an economic downturn, and 86% have not sought any advice on how to prepare for the worst

Microsoft research has shown that 76% of business owners have made no provision for an economic downturn, and 86% have not sought any advice on how to prepare for the worst, writes Robert Epstein, business lead, small medium business, Microsoft UK.

This is underlined by the economic survey for the first quarter of the financial year from the British Chambers of Commerce, which showed a significant slowdown in investment that is likely to have profound impact on growth.

The slowing of trade and the resulting increase in competition is a cause of great concern for businesses of all sizes. Whereas large businesses have access to a strong senior management team and skilled consultancies to help them through the difficult times, most SMBs find it hard to gain access to the right advice and tools. And yet technology can offer an affordable way to improve business function, from helping to reduce costs to ensuring that businesses can compete effectively.

Finance packages, such as Microsoft Office Accounting and Microsoft Dynamics for larger businesses, can help companies gain a better understanding of their finances and improve cash flow by making it easier to stay up to date with the latest numbers and ensure money is coming in. For those businesses that cite lack of capital as a primary reason for stunted growth, vendor financing provides customers with a simple, convenient and affordable way to acquire their IT.

For example, Microsoft Financing's unsecured lending facilities enable a company to get up and running with a new technology, while paying for it over a period of time. By using alternative ways to finance IT purchases, bank finances are left available to fund business growth. Businesses are also able to invest in larger and more complex technology based solutions that they may not have previously been able to afford, such as business intelligence software.

Software delivery innovation can also help SMBs to gain access to products that were once out of their reach. Software as a service (SaaS) or hosted software enables businesses to "rent" software for a monthly price per user rather than buying it in the traditional sense. This helps to spread payments, but also dramatically reduces upfront costs and the need for increased in-house IT support.

Hosted software providers will securely deliver IT capability which can be rolled out very quickly, is always up to date and reduces risk while providing flexibility to scale up or down as required. A great example is a customer relationship management system that enables businesses to manage new prospects as well as keeping in touch with old contacts, so that an opportunity is never missed.

Not only do flexible IT solutions reduce costs, new technologies such as voice over IP (VoIP) telephony can help to cut phone bills, and using instant messaging and online meetings can reduce travel costs, saving time and money. IT can also enable remote working and greater flexibility in the workplace, which in turn will lead to efficiency savings through greater staff utilisation.

For example, simply using a server such as Windows Small Business Server provides out-of-the-box capability to enable staff to access customer and business data easily and securely, from any internet connected PC.

Greater productivity also helps to improve competitiveness. This is critical in tough times, and technologies such as Sharepoint can help teams to work together more effectively by sharing information and jointly working on documents. However, competition is at its highest level in an economic downturn, and business efficiency alone will not lead to winning customers and keeping them satisfied.

It is troubling that only 18% of small businesses have a website, and fewer can take orders on the web, when Office Live Small Business provides free web domain names, websites and e-mail as well as low-cost electronic marketing capabilities. It is essential that SMBs have a web-presence if they are to complete effectively with larger businesses and meet customer needs.

Technology can make a real difference in hard economic times, and it has never been more accessible to SMBs. We urge SMBs to seek advice from Microsoft business partners on how IT can make a difference in their businesses.




This was last published in July 2008

Read more on IT for small and medium-sized enterprises (SME)

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