Technology now a driving force for SMEs

The importance of IT business solutions for small and medium-sized enterprises can simply not be underestimated.

IT investment may still not be at the top of every small and medium-sized enterprise's (SME) list of priorities, but with each passing day the opportunities diminish for those unwilling to embrace technology.

To some extent, the writing has been on the wall for the traditional, offline business models since well before the millennium, and technological innovation has only accelerated over the last decade.

And while the significance of IT within an organisation varies according to factors such as scale, sector and strategy, it is clear that the broadband explosion of the noughties has revolutionised the small business sector.

Indeed mobile connectivity, unified communications, cloud computing and Software-as-a-Service (SaaS) are not only changing the way businesses work, but many aspects of society as a whole.

While e-commerce is contributing to decline on the high street, online marketing is radically altering the way the media works. Customers are using social media to identity the best goods and service providers, and also the ones to avoid.

At the same time, business conferences are held across different time zones, companies are set up in spare bedrooms and employees telecommute to work via their internet connections.

But it is not just tech-orientated entrepreneurial types who are honing the power of IT –confirmed 'Luddites' such as farmers, shopkeepers and low-level manufacturers are increasingly being pulled into the technological age.

Broadband – the bedrock for small business technology?

Many commentators see the development and proliferation of broadband technology as the catalyst for SME technology adoption, and it would appear that a reliable internet connection is a basic requirement for any 21^st century company.

Customers, suppliers and public services are flocking to the online domain, meaning email accounts, websites and, in many cases, an online checkout facility are simply not optional.

As consumers have ditched the Yellow Pages in favour of search engines, those without a website risk missing out on valuable new trade.

But with recent Treasury moves towards online tax self-assessment filing look irreversible, offline businesses risk being alienated if they lack an internet connection.

With this in mind, the government's recent decision to delay the rollout of 2Mbps broadband nationwide until 2015 represents a blow to the SME community – in particular those firms based in rural areas.

For some time, lobby groups such as the Country, Land & Business Association (CLA) and Federation of Small Businesses have warned of the dangers of poor coverage levels outside the UK's main urban areas.

CLA president William Worsley expressed his "shock and disappointment" at the three-year delay in the government's broadband commitment, saying the decision "could seriously compromise the ability of the rural economy to succeed in the future".

Emotive language perhaps, but the comments clearly illustrate the importance of the internet to small businesses, both in terms of driving revenue and compliance.

Hosted services can help reduce business costs

For the majority of small businesses, especially those with low turnovers, large-scale expenditure on internal IT hardware may simply not be option, but various alternatives do exist.

The arrival of the high-speed internet has enabled the cloud computing, web hosting and Software-as-a-Service (SaaS) markets to expand at a rapid rate, enabling SMEs to access the tools they need while keeping IT costs to a minimum.

SMEs can now complement their own in-house IT, or even replace it, using hosted solutions which they pay for based upon use. As well as helping to manage finances, this model could also help businesses remain compliant.

According to Doug Miles, UK managing director at Association for Information and Image Management, it is quite possible that cloud computing and SaaS may become mandatory for some business functions in the future.

Should the government see an opportunity to increase efficiency and reduce administrators' workload for certain tasks – potentially for tax filing, payroll or corporate reporting – such a situation could materialise.

And with this in mind, Mr Miles suggested that businesses may benefit from familiarising themselves with the technology at an early stage.

Certain challenges need to be overcome if this is to be achieved, not least the apparent knowledge gap among SMEs over the availability and benefits of hosted services.

A recent Techaisle survey of SMEs within the US, UK, Germany, Italy and Brazil indicated that just 37 per cent of firms had even heard about cloud computing, let alone considered investing in the technology.

This is no doubt understandable given the cloud's relative infancy, and alludes to the fact that it is still a case of one step at a time where SME IT adoption is concerned.

While technology will continue to develop at breakneck pace, driven by the private sector's pursuit of profit, individual business owners will look to adopt IT in their own time, on their own terms.

But as more consumers demand an online presence, and government or other corporate intervention dictates the pace of change, SMEs will have the simple choice of falling into line or falling by the wayside.

Note: This blog entry was originally posted on blogs.technet.com. View original post