Investing in technology

Citation

(1999), "Investing in technology", Work Study, Vol. 48 No. 1. https://doi.org/10.1108/ws.1999.07948aaf.002

Investing in technology

Investing in technology

Nearly one-third of small businesses in the UK have raised their spend on information technology by 50 per cent over the past two years, according to NOP research. The figures also show small companies in all sectors right across Europe are now investing significantly more in their high-tech futures, leading to a narrowing of the traditional IT chasm between large and small firms.

The study was commissioned by the world-wide leader in networking for the Internet, Cisco Systems, to investigate the adoption of technology by small businesses. Preliminary findings reveal that two in three small European firms grew IT expenditure over the past two years with one in five businesses increasing investment by more than 50 per cent. Almost one-third of the companies questioned claimed to invest more that ten per cent of their total company capital expenditure on IT projects.

Much of this new investment is centred around the Internet. Almost half of the companies questioned had Web access but for many this is still very new. Tellingly 50 per cent of those companies only began browsing the Web during the last 12 months. Currently a quarter of Europe's small companies have a Web site while almost half of the rest expect to establish their own within the next 12 months.

Among the European countries surveyed, the Czech Republic leads the way in terms of investment growth, with 33 per cent of small businesses claiming to have increased funding by more than 50 per cent over the last two years, followed by the UK (29 per cent), Spain (27 per cent) and Italy (14 per cent). France and Germany are currently increasing their spend more slowly.

The UK is investing particularly strongly in IT with more than one-third (37 per cent) of small businesses contributing over 10 per cent of capital expenditure to technology projects. The UK is eclipsed only by the fast-track economy of the Czech Republic where more than half of small companies are investing this proportion.

According to Cisco, the Czech Republic's lead reflects the way Eastern European countries, unencumbered by legacy systems, are able to leapfrog over their Western counterparts.

Across the countries surveyed there is a widespread belief by small businesses that IT solutions reduce costs and open the door to new business opportunities. Of those sharing information electronically, for example, 40 per cent of small businesses claim to have made cost savings. Nearly a quarter of firms with a Web site (22 per cent) are already using the Internet for online trading and for processing orders.

Goran Strandberg, Cisco Systems' European director of marketing for small and medium business, said: "Many companies have progressed in the last two years from toying with internal e-mail to reaping the benefits of early e-commerce and information sharing over networks.

"Small businesses can now use technology to secure an inexpensive global presence and compete effectively with their larger cousins."

Small business' growing awareness of the potential of networked applications has led Cisco Systems to launch its own networking options for the small business market.

Earlier this year, Cisco launched the Cisco Networked Office Stack which has been specifically designed for small businesses, providing a neat solution for companies who want affordably priced Internet access, high performance local area networking, an easy-to-manage Web site and flexible remote access.

The package gives small businesses the opportunity to conduct business over the World Wide Web and run their own Intranet. It also allows companies to share files between colleagues, suppliers, branch offices and even customers, and enables staff to work from home. Security is assured through a robust firewall.

Cisco believes that pressure on smaller companies to embrace networking will increase as companies respond to customer demand and internal pressure for greater efficiency. Small businesses can access Cisco's Easy Guide to Networking from www.cisco.com which explains and illustrates how small companies can benefit from networking.