Intel Small Business Blog

Lack of technology spending could cost small businesses dear

Economic conditions in the UK have forced businesses to reconsider their budgetary priorities, and unfortunately, new technology often comes at the bottom of the list.

It’s understandable – many small businesses feel that the tech they use is perfectly adequate for their needs in this time of low spending. Employees may want new technology in the workplace, but those in charge of IT may feel they can do without it.

Our Small Business Index unveiled late last year showed that almost half (46.3 per cent) of small business IT decision makers haven’t adopted new technologies because of insufficient financial and human resources. Over a third (36.4 per cent) don’t look like they are going to buy new computer equipment (laptops, desktop PCs, tablets or smartphones) in the next 12 months.

Companies should ignore new tech at their peril. At best they may lose out on efficiency savings from advanced features and improvements. At worst they could lose the competitive advantage they hold over particular business rivals.

But the main problem for SMEs may not come from within the network, but outside. Although bosses may not supply the newest technology, it seems more and more likely employees will bring it in anyway.

The consumerisation of IT

More than three quarters of respondents (78.5 per cent) said the lack of government funding prevents them from training staff in new technology. This is in spite of almost half (42.3 per cent) bringing in a personal mobile or smartphone into work, with 38.7 per cent using their own personal laptop.

If companies aren’t going to supply new technology to their employees, they’ll likely bring it in with them. It’s much more convenient for an employee to carry one mobile device around, with their work and personal content all in one space. Many find it ends up cheaper than carrying multiple devices.

Sometimes the reasons are aesthetic. New technology is often better looking, and indeed, 69 per cent of the Intel Small Business Index respondents said it was the attractive design of the device that was the big factor. A similar figure didn’t want colleagues or bosses having visibility of their data on work computers

These figures reinforce the view that the consumerisation of IT has been going on for many years – observers accepted long ago that it is something that cannot be stopped. Enterprises have the resources and knowhow to accept this kind of technology in the workplace. For SMEs, mindful of budgets, it is more difficult.

Lack of tech spend could jeopardise security

If employees are going to bring in their own mobile devices to work, and it’s rare for SMEs to consider an all-out ban, then you would expect those responsible for IT to be well informed about the security implications.

A shocking 36.5 per cent of IT decision makers said they are unaware of legislation relating to security and privacy on mobile devices. Financial handicaps were also hitting SMEs in this area – 11.2 per cent admitted of IT decision makers admitted that even though they were aware of the legislation, they didn’t have the business resources to comply.

These are really worrying figures. The cost of a data breach in terms of money and reputation can be severe, particularly for a small business. It is already costing money – the Intel Small Business Index revealed that one in 10 decision makers had already been the victim of an IT incident in the last 12 months.

Though it is understandable that SMEs are holding back on new tech spending, it does seem surprising that they aren’t spending more on security in their IT budgets. Most SMEs in our index spend less than 10 per cent of their IT budget on protecting their business against security breaches.

Cloud computing

Budgetary constraints mean SMEs should be focused on getting ‘bang for their buck’ – the best value for the new technology they spend on. Unfortunately our study showed this wasn’t the case for many firms.

For instance, it is already known that if implemented effectively, cloud computing could be a cost-effective technology for many SMEs. However, only 13.8 per cent of our respondents had adopted cloud computing services.

Since cloud services have been around for a number of years, that’s a surprisingly low figure. The problem is that there is a lack of education about what cloud computing actually is. For example, over 57.2 per cent of Amazon/ eBay users and nearly half of Google Docs users say they don’t use cloud computing.

As services like iCloud from Apple make an impact in the consumer world, the future will hopefully see more SMEs clued up about the benefits cloud computing could bring.

Think carefully

SMEs need to think really carefully about cutting their new technology spending. Investment in the right tech could result in huge productivity and efficiency benefits, while it is dangerous to think that other businesses won’t be spending money in an economy where every little advantage counts.

And as the consumerisation of IT shows, new technologies like tablets and advanced smartphones are going to be taken into the workplace, whether bosses like it or not.

Our figures show that many SMEs are not prepared for this, and not putting the right security safeguards in place. A data breach could hit a company much, much harder than the cost of making it regulatory compliant.

SME IT bosses need to think long and hard about making the right decisions. They need to factor in the productivity benefits of new technology like tablets and the cloud, as well as the security implications of a poorly worked out strategy.