Many of the business issues affecting UK small and medium-sized enterprises (SMEs) will be familiar to IT directors in larger organisations.
According to exclusive Computing research, conducted in association with Oracle, compliance and regulatory requirements top the list of factors influencing IT strategy and planning for SMEs.
Cost savings, improvements to existing IT systems, and customer-focused initiatives are all among the highest priorities.
But there is less evidence that new technology is being deployed to support business growth initiatives such as ecommerce.
The survey of 300 firms with fewer than 1,000 employees suggests that most business applications used by SMEs are bespoke developments or customised packaged software. Only highly standardised systems such as email are used off-the-shelf without any local amendments.
But there remain many challenges unique to the nature of smaller organisations.
Simon Baxter, supply chain co-ordinator at Linx Printing Technologies, a business with fewer than 500 staff, says IT is fundamental to the company, and demands are increasing.
‘Until five years ago, I was the IT department,’ he says. ‘Now there are six of us, so the complexity is going to increase and is way beyond the amateur.’
Baxter says achieving the right balance between bespoke and customised software is difficult.
‘The benefit of having customised applications is that we can look after these systems ourselves, ensuring a fast response.
If there are changes in government policy then we can apply changes to our own systems more rapidly than we can if we go to a third party,’ he says.
‘The aim has been to use off-the-shelf products because of the ease of upgrades. We have recently gone through several issues with the migration from unique servers to Microsoft servers, and it is always the bespoke bits that are the pain.’
Availability of resources is one of the main constraints for SMEs.
‘Time and time again, resources are the key obstacles to business application development,’ says one respondent to the survey, an IT manager at a firm with fewer than 100 staff, who asked to remain anonymous.
‘The challenge is securing the resources to do implementation and installation, and then to go through the management procedure of getting users to use a new system, and training them.’
The Computing/Oracle research suggests that this reluctance to learn and use new systems is a common problem encountered by SME IT managers.
‘Most of the older staff think IT is a necessary evil. The newer staff tend to think of it as a method to get over problems,’ says Stephen Rundle, systems information manager of a firm with fewer than 100 employees.
‘The biggest drawback is not the technology side, it is basically the human side. People tend to feel happy with things they know, and we are talking about a system we have had for at least six years. And of course they have got used to it, so the new system is alien to them.’
But scarce resources do not mean that the expectations on IT departments in SMEs are any less than for their counterparts in larger organisations.
‘A major challenge that SME IT managers face is that their IT staff and budgets do not keep pace with the demands on their IT environments,’ says Gartner analyst James Browning.
‘They need to find ways to minimise the total cost of ownership of their IT environments so they achieve the required service levels to support the business. This requires greater emphasis on products and services that promote simplicity, ease of use, interoperability and reliability.’
Most large businesses have already made significant investments in corporate applications such as enterprise resource planning (ERP). And with the top end of the market becoming increasingly saturated as a result, IT vendors are turning their focus to SMEs – to the benefit of small business IT managers.
‘’The SME market remains the next battleground for ERP,’ says Forrester Research analyst Ray Wang. ‘With SAP and Oracle moving into the medium-sized market, and Microsoft and Sage taking the small business market battle into the medium-sized market, ERP vendors are racing to bulk up to defend their market share, and to achieve economies of scale and continue to innovate.
‘SME customers will continue to benefit in a highly competitive and innovative market.’
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