Many of the West Midlands' small businesses could be falling behind the competition as technology progresses, according to a new comprehensive report developed by the Centre for Future Studies, an independent forecasting think-tank.
It says that by failing to recognise the need for the effective management and use of their IT and Communications (IT&C) many small businesses are unable to meet customer demands and expectations. In a world of e-business and converged networks the report shows that business as usual could result in business failure.
The study claims to "lift the lid" on the IT skills challenges SMEs face now and in the future, and confirms that
SMEs are missing out on the opportunities that technology presents. But being small is not a disadvantage if the business’s IT&C capabilities are right.
The report also points out that technology skills, services and products that a business employs are critical to its growth and success as well helping to ensure swift and competent customer service levels.
Owner-managers are unable to implement solutions on their own, because they do not have the IT management skills to fully recognise the problem or the cure. But there is no single source of trusted information or advice for them to go to about IT&C management and services.
The report, which is sponsored by BT Business, is a comprehensive analysis of the capabilities of small businesses and how they match up to consumer expectations.
With an estimated 4.3 million SMEs in the UK, accounting for half of the UK’s turnover and employment, smaller businesses are now generating twice as many jobs as large employers and are providing real growth in the graduate job market.
The report shows that SMEs in the West Midlands understand the importance that technology plays in their business with 89 per cent acknowledging that technology is pivotal to their long term success. But whilst they are doing their best to embrace technology they are having difficulty managing it and ultimately identifying where their business is falling down.
The problem stems from owner-managers being specialists in their industry, but not in IT management, leaving them unable to adequately assess their own and the competency of their employees to optimise their IT&C hardware and applications.
Like elsewhere in the UK, the majority of owner-managers in the West Midlands do not feel that they are missing the necessary expertise. Eighty per cent do not think their business lacks IT skills and only 18 per cent are dissatisfied with the technical skills of their staff.
However, more in-depth interviews found that small businesses have deficiencies in their IT knowledge and skills and, as a result are unable to manage IT&C technologies to optimise the benefits for their business.
This is further compounded by a lack of resources.
They are unable to employ a dedicated IT&C professional and instead are over-reliant on family and friends to provide IT advice.
What is clear is that, across the board, essential skills in managing, purchasing and operating IT&C are missing to a greater or lesser degree. SMEs lack a single and trusted source to advise them or provide an extension to their in-house team to manage through change and crisis.
Paul Evans, regional director for BT Local Business in the West Midlands, said: "At BT we are dedicated to helping SMEs in the West Midlands thrive, helping them to access the skills essential to plan for, buy and manage the IT and Communications technologies essential to optimise their business potential.
"Our IT Manager Service is just one example of how we are providing support and expertise for SMEs that allows them to get on with managing their core business. We urge other businesses and organisations to join us as we seek to expand the knowledge base of West Midlands SMEs, develop their capabilities and help them build for the future, driving forward their contribution to UK plc."
Being able to get the most out of IT and services through good management is not just about gaining or maintaining competitive advantage, it is about keeping up with the demands and expectations of the customer, which now make IT skills mandatory: in particular, the rise of e-business and the growth in demand for online trading services from both customers and suppliers.
Dr Frank Shaw, foresight director, Centre for Future Studies, said: "Consumer expectations are increasing as they experience a better level of service. All of this is driving IT investment and SMEs need to deliver on service whilst also accommodating changing work patterns which meet their employees’ expectations.
"Innovation is the key if SMEs want to compete in today’s domestic and world markets."
An executive summary or a full copy of the IT & Communications Technology Report can be downloaded at http://businessclub.bt.com/downloads.