Don't go on price alone, SMBs warned

BEIJING--Cost is not, and should not be, the over-riding factor when small and medium-sized business make IT buying decisions, industry practitioners say.

Although cost is an important issue, the cheapest solution may not be the most appropriate, said Carl Li, executive manager and technology director of Beijing Ladder Technology, at the HP Smart Office media conference here. Beijing Ladder Technology offers online elementary and high school courses to the China and Taiwan markets.

Li explained: "The hardware may be very cheap, but you might need technicians to carry out maintenance, and SMBs may not be able to afford to dedicate such resources."

Lin Zhaoxu, general manager of Beijing Forus Huaxing Computer Technology, which provides management consulting and IT outsourcing services, noted that the top priority for most SMBs is not leasing and financial help. Most of these companies want to "deploy the right technology in the right area and carry out the deployment in a practical way", he said.

Trust is also a key factor, and technology providers must deliver on their promises. Ryan Chioh, executive director of FarEastFlora.com, said: "We've experienced vendors over-promising. When the time came, we didn't see that kind of implementation."

Chioh admitted that his company used to be extremely conscious of cost, but it now prefers to look at the technology's total cost of ownership. FarEastFlora.com is a Singapore-based florist that has implemented several technologies to enhance its business.

Noting the competitive pressures from globalization and the greater customer demands that SMBs face today, Adrian Koch, senior vice president of HP's Personal Systems Group, said SMBs would do well to take a non-traditional business approach to ward off the competition. "Business today, especially for SMBs, is a world-class sporting event. And the room at the top is very narrow," Koch said.

Dennis Mark, HP's Asia-Pacific vice president of marketing for the Personal Systems Group, highlighted the role of the government in helping the local SMBs which are a "new engine" of the Chinese economy. Referring to the directives and policies that the Chinese government has set since 2001 to facilitate the growth of local businesses, Mark added: "They are increasing the capabilities of the SMBs to compete not just domestically but in the global market as well."

But Chinese SMBs can do with more assistance when it comes to IT.

According to Zheng Xin, deputy director-general of the Department of Small and Medium-sized Enterprise under China's National Development and Reform Commission, there is a large group of small businesses that have not embraced the Internet. A study conducted by the Chinese government found that at the end of 2004, about 63 percent of SMBs in China did not have a Web site.

Zheng said the government is looking to mobilize resources from large enterprises to help the SMBs, as well as strengthen the cooperation between the different players.

Vivian Yeo reported from Beijing, China.