BUSINESS
SMEs are increasing their IT spend
28-04-2008
by Emmet Ryan
SMEs are placing a greater emphasis on investing in IT than larger businesses, according to a new study by IDC.
The research firm's annual enterprise services survey found that medium-sized businesses, with 500 to 1,000 employees, increased their IT budgets faster in 2008 than much bigger enterprises. The study focussed on developments in 196 Western European firms.
Interest groups in Ireland feel the picture is likely similar amongst Irish SMEs. "People are aware of their cost base and are looking at IT as a way of reducing it," Patricia Callan, director of the Small Firms Association, told ENN. "They are looking to improve the productivity of existing employees through IT rather than increasing staff."
Callan said IT investments provided businesses with an opportunity to make personnel more mobile and thus capable of covering a wider base.
While mobility is a key benefit from IT investment, the IDC study found that security was top of the investment agenda for medium-sized businesses. This was followed by a greater desire to improve IT infrastructure and the service quality of IT applications being used by businesses.
Outsourcing is proving particularly popular with mid-size firms, according to the report. The survey found that two thirds of these organisations already use some form of outsourcing with many other firms looking at investing in the service.
Mark Fielding, chief executive of the Irish Small and Medium Enterprises Association said the greater interest amongst SMEs in such services wasn't surprising. "It would be normal for SMEs to be investing at a faster rate as they have further to come in order to catch up with larger firms," he told ENN.
The ISME chief executive said many SMEs were wary of IT providers after having bad experiences in the past and that it was up to vendors to ease these fears. This view was shared by Mette Ahorlu, consulting director of IDC's European Software and Services group
"This means that medium-sized customers must have major confidence in their service provider, and that the existing relationship plays a much stronger role in this segment than among larger enterprises," said Ahorlu.
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