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Small business and IT during the recession

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15th Jul 2009
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Technology correspondent, Jon Wilcox attends an exclusive roundtable discussion on how IT and small business can work together – even during the recession.

Sitting in the bowels of the Covent Garden Hotel in London among a group of small business owners, industry representatives, and even a software vendor, it’s easy to feel like the roundtable is to discuss the future of a secret organisation. But it’s not. Instead, we’re here to talk about how small businesses and IT can come together even in the midst of the worst recessions for decades. Chaired by Sean Geer, the former managing editor of technology publication, Wired UK, the roundtable is a lively debate covering everything from the implementation of Cloud solutions, to the Digital Britain report.

So is the procurement of a solid IT system the solution to solving a company’s problems in the recession? Clive D’Urban of digital media outfit Dubbs, offers his thoughts: “In the current climate what we have are people in all departments saying ‘We’ve got to reduce costs’. The IT department can offer solutions in virtually every area.” He does acknowledge however that, “At this point, it is about literally about cost savings and survival.”

FileMaker’s regional manager Tony Speakman says the implementation of appropriate technology can aid a company, adding: “Technology on its own isn’t going to help anybody out of an economic downturn. Technology that’s used with an in depth understanding of what a company is trying to do, will.”

One of the key trends of the recession has been the shift towards on-demand IT solutions, based in The Cloud. Whilst concerns over data security are continually trying to be allayed by vendors, there are some small businesses unwilling to contemplate a shift to Software as a Service (SaaS). Victor Gentinetta, founder of Cloud-based M F Job Tracker obviously supports the new SaaS services: “Good software can help run a business more effectively, more efficiently... With the advent of on-demand pay-as-you-go software, we can now as developers offer solutions where companies don’t have to find huge capital up front.”

Gentinetta adds, “I would suggest that a lot of companies should be looking at on-demand software because it’s the way forward.”
 
However in a lot of cases, according to Speakman, a lot of businesses aren’t utilising the tools they already have to best effect: “Sadly, I don’t think the majority [of businesses are using IT to the best effect]... What I’m critically aware of is an awful lot of them have taken our product, built a solution in it, and they’ve been running that solution for 2, 3, 10, 15 years! What a lot of them haven’t done is looked at, ‘Where else could I use this technology - that I’ve already invested in – in my business?’”

Lynn Robinson of IT industry organisation, Intellect points out that companies need to do more than just spend more on IT: “It’s not just about investment in technology; it’s about investment in staff and training. Some [small businesses] don’t want to do that.  They don’t put a business plan in place, or it’s a very loose business plan, so they’re not looking to investment that much... A lot of [small businesses] don’t even have an appraisal system in place.”

But what about the IT industry? Is this faceless figure doing enough in supporting British small businesses? Speakman isn’t quite sure: “I don’t think the industry as a whole is doing a great job [in supporting small businesses].  For the past 20 years the industry has just grown and grown; as long as you can come up with great technology, someone will buy it.” He adds, “I’m not saying that every company is doing a bad job, but particularly some of the big companies have had it quite easy for a long time.”

Singling out the liquid definition of a small business – the EU and US have mixed views on where the border sits – is one reason why some of the big software developers are having ‘issues’: “Those companies are now having to shift their focus and realign themselves,” Speakman continues. “It’s been very interesting to see some of these very big companies with very expensive software coming out with their small business programme. I heard someone from one of those companies talking about their small business programme, and that they were selling it to businesses as small as 500 people!”

With that in mind, how has the group sorted out their own respective backyards?

Cad & The Dandy’s James Sleater explains the seasonal nature of his tailor business is allowing them to improve their current IT solutions: “We’re harnessing the cyclical nature of our business to spend this time devoted to our resources on IT... so that when stuff picks up again in September, all of our systems will be much better and in place.”

Sleater continues: “The systems we have in place means that if we didn’t have them in place, we’d probably have to have two or three extra staff – and it’s worth the investing in those systems so we don’t have to pay those salaries.”  Implementing automated IT is a solution that many of the group agreed upon, with InStyle managing director, Duncan Lawson going as far as saying, “There’s no way we could do what we do [without automated systems].”

Sitting just weeks after Lord Stephen Carter published his final Digital Britain report, it’s no surprise the subject made an appearance during the roundtable. Carter’s recommendations of rolling out a universal baseline broadband speed of 2Mb by 2012 has split opinion, especially its £6 per year levy to fund next-generation rollout.  So what does the panel think?

“I think as a nation we have made huge strides forward. It’s not as good as it could be, [but] I don’t think it’s something for us to be ashamed of,” says Filemaker’s Speakman. “If you look at the younger generation, they do live and breathe this stuff. How well they actually understand it isn’t actually that important.” Victor Gentinetta thinks that funding of next-generation rollout should be funded by British businesses, which heavily rely on a robust broadband infrastructure: “Small businesses should be prepared to pay more for their bandwidth, to encourage BT to invest in the infrastructure. Having Digital Britain is great, but the biggest issue we’re going to have here is saturation.”

Finally shifting back to the recession, the roundtable panel offers their advice on how small businesses like themselves approach technology. 

“Prioritise by [asking], ‘where is the cost save, and what’s going to save the most costs?’” says D’Urban. He adds: “Embrace the technology.  Start thinking about moving away from the traditional ways of doing things... sooner or later the technology is going to start becoming easier, where people start to understand these things better.  That’s what the future holds: people being empowered by the software to do things themselves. ”

Speakman offers his own take: “Spend as much as you can afford to... but you’ve got to slice it into effective chunks.” He continues, “Get out of the office, and go and see a company that’s done it better than you.” Duncan Lawson agrees, adding: “Invest in what’s going to buy you out of it.” Finally, Cad & The Dandy’s James Sleater offers his opinion: “Keep it simple and keep it functioning on what needs to be done, but keep moving it forward.” He warns, “Do what you can do, but don’t just ride it out.”

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