Going mobile
This is according to lead analyst and managing director of World Wide Worx, Arthur Goldstuck, based on the interim results from a sample of 3700 respondents in the Small and Medium Enterprises (SME) survey for 2006.
The survey examines a range of factors influencing the competitiveness of SMEs. Among others, it tracks technology trends among SMEs.
The research shows that 47% of respondents believe that mobile communications have had a high or very high impact on their ability to win and retain clients, while 36% see online banking as having a high or very high impact here, and 34% see a relationship with the bank having this kind of impact.
Internet access and IT systems each rank marginally lower at 33% high or very high impact.
Said Goldstuck: “Internet access among SMEs has swung dramatically in favour of ADSL — high-speed broadband Internet connectivity. Last year,
ADSL uptake jumped from the previous year’s 12%, to 25% and this year is at 46%. ISDN last year started its downward trend and accounts for only 9% of the SME market this year.
“Dial-up connectivity has dropped to 17%, compared with 25% last year. It is clear that SMEs place a lot of stock in high-speed, reliable Internet connections.”
The survey also examined how small businesses decide on IT purchases.
Said Goldstuck: “Quality of product or service is the Holy Grail of procurement for small and medium enterprises.
“The common view that price is the main deciding factor for information technology purchases is not quite true. Of the 3700 SME decision-makers interviewed so far, 84% say that quality of the product or service is a prime consideration. Close behind came reliability or lack of downtime, at 79%, and only then price, at 75%.
“Nevertheless, the importance of price appears to have increased dramatically in the three years since the 2003 survey, when only 61% of 5900 respondents said it was important.”
Goldstuck said this was partly an indication of heavy emphasis on cost reduction among small businesses, as well as the fact that it is difficult to differentiate between the quality of competing products in the IT environment.
“It appears that quality and reliability are the primary criteria but that, should all competing products be on a par, the decision will be based on price and relationship, which 71% of respondents rated as important,” he said.
The survey also drilled down further into these numbers, to establish whether the criteria changed for specific categories of IT, such as database software.
“The interviews indicate that there is a strong correlation between general IT purchasing criteria and database purchasing criteria, with criteria ranked in the same order, although the percentage of respondents ranking each criterion as important decreases.
“Quality receives an 82% importance rating, reliability 75%, price 73% and relationship 66%. The factor that ranks rock bottom for both areas of purchasing is company procurement policy, with only 35% of respondents rating this as important in making either an IT or a database purchase decision.
“This is partly an indication that company procurement policy has not been implemented in most SMEs. This in turn would mean that IT purchasing strategy requires an overhaul in the small and medium enterprise environment, in order for SMEs to get the most strategic benefit from their investment in IT,” said Goldstuck.
The final results of this year’s survey will be released in September, after the completion of 6000 interviews with decision-makers in SMEs.
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