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SMEs losing out to big business due to poor IT strategy

Research reveals that only 15 per cent of smaller businesses have an effective IT strategy that allows them to compete with larger competitors.

By Asavin Wattanajantra, 23 Jan 2008 at 14:55

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As many as 85 per cent of small to medium-sized companies (SMEs) feel they are losing business to bigger competitors because of a lack of IT and communication expertise, according to a survey released today.

In addition, only 24 per cent of SME decision-makers believe that their business is able to respond very quickly and effectively to customers, a view echoed by 51 per cent of employees, says research commissioned by BT and

Cisco.

"What we're bad at, and what I think most SMEs are, is at rolling [the technology] out to the staff," said Clarke Willis, chief executive of small business Anglia Farmers at the launch of the research. "It is about training those individuals who aren't technologically savvy, and the truth is there isn't time to roll out a training programme you would really like."

Only 23 per cent of SMEs felt that the internet was the main business development driver for SMEs over the past five years. A growing customer base, increasing competition and self-motivation for growth were seen to be more compelling reasons. Although 58 per cent of SMEs felt that ICT was part of the solution for improving business, the feeling at the meeting was they just were not able to put as much investment in IT as bigger companies, because failure would hit them harder.

"The reality of running an SME day to day is that it is about client interface, making sure the team has delivered what it has promised and finding new opportunities. It is luxury to sit down with other people in my business and discuss IT strategy," said Chris Hill, chief executive of strategic events agency McMenemy Hill.

Flexible working was also an issue for SMEs as only 16 per cent of SME decision-makers believed that they had adequate management control of employees when they were working outside the office. This contrasted with 94 per cent of employees who thought businesses should offer a good work/life balance and the 43 per cent who said their organisations did not offer adequate options for flexible working. "In some ways technology will make [flexible working] easier, because the trackable information will be there." Willis said.