Why Cost-effective IT is Key to Unlocking Small and Medium Enterprises’ Potential
How small and medium enterprises can use technology to limit costs and drive success
2013 saw a significant employment boom with the number of people in private sector work reaching a record high. According to the Office for National Statistics, private sector employment increased by 1.3 million to a record high of 24.1 million under the coalition government. This was fuelled by small and medium- sized enterprise (SME) growth, which is the key to the UK’s economic revival. To continue this in 2014 and beyond and recover, SMEs need efficient and most importantly cost-effective IT support.
In this turbulent climate, it is encouraging to see the public sector taking the lead on placing trust and investment in the SME. The introduction of the G-Cloud was a concerted effort from government to put 25 per cent of spending through SMEs across all areas of purchasing by 2015. Furthermore, the government’s direct SME spend across all its procurement – not just IT- increased from £3bn in 2009-2010, representing 6.5 per cent of spending to £4.5 bn in 2012-2013, which is 10 per cent of that total. A further piece of encouraging news is that of those projects being undertaken through G-Cloud, many deliver 60 per cent-90 per cent cost savings on previous government contracts.
The public sector is making big changes to help smaller businesses compete for government work- this is about a change of mind set and putting trust in smaller providers. Previously these smaller businesses have found bidding for public sector work extremely expensive and bureaucratic in the past. What many people fail to realise is that this meant the taxpayer could not benefit from some of the most efficient and cost-effective projects/services that SMEs are more than capable of delivering.
For the true potential of SMEs to be unlocked in 2014 and beyond, it is imperative that small and medium- sized businesses in the UK follow the public sector example and look for cost-effective IT solutions that have an impact elsewhere other than the usual ‘big’ IT firms that tend to lock small businesses into lengthy, inflexible and costly contracts. Such ‘oligarchs’ of the IT market need to continue to be challenged by the public sector. 2014 will be the year of flexible IT- a year where small businesses can compete with larger organisations unlike never before. The introduction of the government’s G- Cloud allows smaller organisations to find cost-effective enterprise grade IT solutions, without being locked into extensive, fixed contracts. Many alternate providers can deliver flexible IT management, providing SMEs with affordable and effective IT solutions.
The route to accessing cost-effective IT is in part a change in mindset, as it was in the UK public sector. Francis Maude admitted that it’s been tough implementing the changes to ICT procurement in the public sector, especially as it involved bringing organisations out of their traditional comfort zones. Maude says, “We think we’re driving reform, we think procurements are being done differently and better”.
It is time for SMEs to fully embrace cost-effective IT. Alternate providers can offer various products to SMEs that are simple and easy to use like management tools that liberate the IT department’s manpower and resources. Free from the burden of outdated commercial models and ageing technology, SMEs can now embrace innovative solutions from many alternate providers that tailor services to the specific needs of the company.
2014 will be the year of the SME. It is up to British businesses of all sizes to continue to lead the way in the UK economic recovery. However, ultimately SMEs need to look at alternate providers who can offer all services without the high price tag associated with the bigger players – making them more agile and more able to compete with the larger companies in the market.
David Howell, European Director of ManageEngine