IT strategy being neglected by midmarket

Mid-sized firms have no clear IT strategy, a survey finds

Nearly one third of mid-sized UK companies with between 100 and 250 staff admit to having no IT strategy according to a new survey released today.

The survey of 170 business managers from market research firm Dynamic Markets found that many midmarket firms are continuing to approach IT projects in an ad hoc manner with 28 percent having no IT strategy within their organisation, 29 percent working to an informal plan, and 34 percent buying systems as they need them.

In contrast, just 18 percent of respondents said their organisation had a formal IT strategy in place and approved by the board and only 16 percent said IT investment was planned on a three to five year timeline.

The report also found that this lack of IT planning was having a knock on effect on the performance of many midmarket firms with over half of business managers claiming their IT department does not offer good value for money and 65 percent claiming different departmental systems are operating in isolation of one another.

Midmarket firms also had greater problems with system down time than their larger rivals with 42% of midmarket managers confessing that they spend 5% of their time each week addressing IT availability problems.

Paul Cash managing director of IT services consultancy Partners in IT, which commissioned the research, said the absence of IT strategies and resultant IT problems within the midmarket could only be partly explained by the sector's smaller IT budgets.

"A lot of the problems come down to management issues rather than the budget, " he said. "With many of the companies we have worked with they have all the technology they need, they are just not using it very well."

Matthew Knowles, a spokesman for the Federation of Small Businesses, agreed that many midmarket firms were not planning adequately prior to deploying IT. " It is important that before they spend money on IT they know what they want to do with it," he said. "A lot of smaller businesses are still very tentative around IT but it is the same principles of procuring anything."

Cash recommended that midmarket firms assess the state of their IT infrastructure before deploying new technology and be more clear on what they wish to achieve from technology investments. He added that firms should also better document IT procedures, assets and service definitions to prevent over reliance on a small group of IT experts within the organisation. "Firms in the midmarket need to do more to challenge this "hero culture" where a small group of IT professionals are the only ones who know how everything works," he said. "You need a good record of procedure to mitigate the risk of people leaving and your IT systems suffering as a result."

Adoption of the ITIL IT service best practice guidelines, the third version of which will be formally launched tomorrow, can help alleviate IT problems common at midmarket firms, according to Cash, but only if they deployed correctly. "There is a view at some firms that you send people on ITIL training and you're done," he said. "But you need to get ITIL processes in use if they are to be effective."

Teresa Jones of Butler Group said that the emergence of software as a service could also help midmarket firms overcome many of the IT management and availability problems they currently face. "These tools often don’t even need much internal expertise to maintain, and all the infrastructure, except for internal networks and ISP, are maintained by the vendor," she observed.