IT innovation for small businesses: An overview

IT innovation for small businesses: An overview

Summary: Small and medium-sized businesses are a numerous and diverse sector that form an important part of the economy. We examine how they approaching IT decision making, whether IT innovation pays off, and what technologies they should be considering.

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SME approaches to IT
SolarWinds survey
How are today's SMEs actually approaching IT decision making, budgeting, prioritisation and technology adoption? A recent (March 2013) survey from SolarWinds addresses this question, with 500 responses from IT decision-makers — 250 in the UK and 250 in Germany. The survey population includes a good spread of company sizes and business sectors, headed by IT & telecoms:

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sme-solar-sectors
Data source: IT Survey: UK and Germany SMEs (SolarWinds, March 2013)

As you'd expect, most IT decision-makers agree that technology is a key business enabler in their organisations. However, a puzzling 34 percent in the UK and 31 percent in Germany are either neutral or in disagreement with this view:

sme-solar-enabler
Data source: IT Survey: UK and Germany SMEs (SolarWinds, March 2013)

When asked about their top IT priority for 2013, improving efficiency to enable better business results heads the IT decision-makers' list, with more emphasis on this in Germany than in the UK. Generally speaking, the top priorities are on the 'defensive' side (as you might expect in the wake of a recession): maintaining existing IT infrastructure is particularly important in the UK, followed by improving the management of existing infrastructure; in Germany, there is more emphasis on improving security:

sme-solar-priority
Data source: IT Survey: UK and Germany SMEs (SolarWinds, March 2013)

Broadening the question to include the top three IT priorities doesn't greatly alter the nature of the responses. Mobile and cloud computing, in particular, both remain low down the ranking.

Examining these more innovative technologies further, 63 percent of UK SMEs and 56 percent of German SMEs report that they have a BYOD policy or are in the process of developing one:

sme-solar-byod-1
Data source: IT Survey: UK and Germany SMEs (SolarWinds, March 2013)

Among the BYOD refuseniks, the most common reason cited in both countries is that it's "not necessary for our business", followed inevitably by security concerns:

sme-solar-byod-2
Data source: IT Survey: UK and Germany SMEs (SolarWinds, March 2013)

Private cloud adoption is reasonably popular in Germany, and slightly less so in the UK. However, in both countries the prevalent response is a lack of enthusiasm for public and hybrid cloud solutions. The main reason given in Germany is irrelevance to the business, while in the UK a lack of knowledge heads the list:

sme-solar-cloud
Data source: IT Survey: UK and Germany SMEs (SolarWinds, March 2013)

The overall impression from the SolarWinds survey is of caution among IT decision-makers as SMEs emerge from recession, with actual deployments of 'innovative' solutions such as mobile and cloud computing lagging some way behind the marketing from vendors and coverage in the media.

SpiceWorks survey
For another take, let's examine a recent survey from Spiceworks — SMB IT Spending: How IT Pros are Creating and Managing 2013 Budgets. This Voice of IT report canvasses 942 IT professionals worldwide from companies with less than 1,000 employees. North America is the predominant region represented, with 63 percent of the companies, followed by EMEA (23%), Asia Pacific (11%) and Latin America (4%). Over half (54%) of the companies surveyed have less than 100 employees:

sme-spice-basics
Data source: SMB IT Spending: How IT Pros are Creating and Managing 2013 Budgets (SpiceWorks, December 2012)

The Spiceworks survey shows annual SME IT budgets continuing to increase, slowly, from a worldwide average of $122,000 in H2 2010 to $162,000 in H2 2012 (the EMEA average is slightly less at $151,000). IT pros expect to use just just over half (52%) of their 2013 budget for existing projects and the remainder (48%) for new initiatives, which gives the average SME an estimated $77,760 to spend on IT innovation this year.

Asked to name the top three focuses for their 2013 IT budgets, IT pros flagged up client devices (laptops and desktops), servers and software, with virtualisation and networking close behind. As in the SolarWinds survey, cloud-based services and mobile are surprisingly low down the priority list:

sme-spice-focus
Data source: SMB IT Spending: How IT Pros are Creating and Managing 2013 Budgets (SpiceWorks, December 2012)

Despite the low ranking of cloud-based services and mobile, the survey found that spending in these areas is on the increase — up from 14 percent and 15 percent of the IT budget in 2012 respectively to 18 percent each in 2013. The signs are, then, that as economic conditions improve, SMEs will look to spend more of their budget on innovative solutions such as cloud and mobile.

Symantec survey
Our final survey is Symantec's 2013 Global SMB IT Confidence Index, which canvassed IT managers in 2,452 small businesses with 10-250 employees from 20 countries worldwide (regions represented were the Americas, Western Europe/Middle East and Asia/Pacific).

Symantec's IT Confidence Index is based on responses to 17 survey questions; this index is then used to define three 'tiers' of SMEs (top, middle and bottom), corresponding to the confidence of their approach to IT.

On this basis, 'top tier' SMEs are more likely to rate IT as strategically important to advance the business than 'bottom tier' ones (84% versus 44%) and more likely to invest in high-quality IT infrastructure to exploit advanced computing platforms (51% versus 36%).

Interestingly, Symantec's survey found that top-tier SMEs typically spend 7 percent less on computing than bottom-tier ones. This may reflect the fact that IT-confident businesses tend to invest in the right technology to allow them to grow, avoiding the need for costly replacement of mistaken choices.

The survey concludes: "The key is to map IT initiatives to corresponding business goals. If, for instance, you have a goal to increase business innovation — like most of the businesses we surveyed — you should look at the advanced IT initiatives top-tier companies are more involved in, including cloud, virtualization and mobility". More than three-quarters of the top-tier SMEs rate mobility as important for driving business innovation, for example. These companies also tend to focus on efficiency, delpoying tools such as online collaboration and video conferencing to reduce travel costs.

Topics: IT Innovation for Small Businesses, SMBs

About

Charles has been in tech publishing since the late 1980s, starting with Reed's Practical Computing, then moving to Ziff-Davis to help launch the UK version of PC Magazine in 1992. ZDNet came looking for a Reviews Editor in 2000, and he's been here ever since.

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