IT in the recession: How outdated technology is stagnating recovery for small businesses

The global financial crash in 2008 has had far reaching consequences, particularly for small to medium sized businesses. Increasingly, smaller firms are trying to maintain acceptable profit margins by freezing any "non-essential" information technology spending. Historically Small and Medium Enterprises (SMEs) tend to work on a 4-5 year technology refresh cycle and as a result of the downturn some are now running 8-10 year old IT systems. Some SMEs continue to sacrifice investment in business technology infrastructure to prioritise their core revenue generating facets, and for some this the only way they have managed to stay solvent.

Often, such measures will impact upon any moderately risky expansion plans for the business, or the wages of current employees. These are immediate and visible cost saving measures, but below them, less visible but no less vital, are other aspects of the business that are left to stagnate, chipping away at its productivity and maximum potential.

One of the most common parts of the business that we see relegated in the fight for investment funds are the IT systems and support facilities. If a business's IT is not actively malfunctioning, it is usually considered non-essential and therefore a low priority for development, particularly during a recession. However, as we move into a period of recovery, the lack of up to date IT systems and support will begin to have a pronounced effect on the efficiency and overall capability of a business. Moreover, as competitors begin to reinvest, many SMEs are losing competitive advantage both operationally and, just as crucially, when attracting and retaining top talent.

In addition to the stagnation of the standard SME technology refresh cycle, cultural technological observations like Moore's law suggest that companies who have neglected their IT systems as a cost saving measure will have dramatically reduced access to the latest technology, particularly in terms of mobile communication and cloud networks.

For example, a PR company that thrives on the ability to share and disseminate information instantly but still relies on email and file sharing systems from 2008 will be at a significant disadvantage to a competitor who has the software allowing their employees to access emails, files and social media channels on many platforms at any time of day. Even the simplest tasks, like creating a press release, becomes far longer and more time consuming without cloud-enabled technology. Modern tools allow all document types to be created and edited simultaneously and on almost any device, far superior to the traditional chain of emails with numerous draft versions attached, waiting to be stitched together by a short-straw person into a single version of the truth. More often than not, the final version is queried again, resulting in a re-run of the entire process. New sharing tools like OneNote eliminate this lengthy process, allowing true collaboration and synchronicity.

Perhaps the most significant outcome of cloud-enabled technologies is how they have consumerised corporate grade technology. Today, an SME can afford to power their entire organisation with technology that they could have only dreamed of just a few years ago. In some ways similar to how websites have provided very small businesses access to the global village - once the sole domain of multinationals - cloud technology has levelled the playing field by providing SMEs the very same tools that work on almost everything and everywhere, but at an affordable price. Tools like presence information, desktop or application sharing with integrated voice and video conferencing that works on mobiles, tablets and desktops can now even be extended to customers and partners. For example, the cost of deploying and maintaining feature-rich tools like Lync has until now been well beyond the reach of most SMEs. The productivity gains provided from these applications are immense, but too many businesses are missing out on these unparallelled IT and communications advances.

Businesses are emerging from a long and painful economic slump to find that the technology they relied upon in 2008 simply cannot keep up in 2014, with opportunities to invest and expand beginning to appear once more. This shortfall is preventing good businesses from achieving their potential and causing them to stagnate as the economy and some of their competitors move on past them.

TOPICS: Cloud, collaboration, competitive advantage, Office 365, phones/tablets, productivity, savings, support, Terry Doherty's Blog, time saving, upgrade/refresh

Written By: Terry Doherty
Terry Doherty

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