CDW asks questions, gets interesting answers.
Getting small business people to answer questions, much less surveys, takes hard work and perseverance. So let me congratulate tech supplier CDW for making that effort on a regular basis. The report the company sent me at the end of last year has some details worth examining.
CDW reports small businesses lag behind larger companies in using technology to help grow their business. True, but the same could be said about the amount of attention paid to advertising, marketing and the size of the sales force. Small businesses lag in all these areas, and you can point to any of these as the reason for slower growth.
Whether use of technology is the primary factor limiting growth isn’t clear, at least not to me. If you have $500, should you buy more advertising or buy a new PC? Advertising will almost certainly get a better return in the short run.
Let’s look at some survey details and see if lack of technology is the reason small businesses stay small. First of all, just over half of small businesses say IT improves their financial performance and/or efficiency, while 69% of midsized businesses and 71% of large businesses say they see an improvement.
At first glance, you might say small businesses are neutral about technology (52% see improvements while 48% report seeing none) because they don’t use it correctly. I see that at times, because they don’t have money for the best technology nor the employees to best put new technology to work.
Yet small business employees spend more time actually doing things, like manual work, than employees in larger companies. Large American companies rely heavily on knowledge workers, not workers building houses or roads or repairing cars or cleaning clothes. Knowledge workers spend their day with technology, so any improvement helps them. A new office computer for the auto body shop doesn’t replace crumpled bumpers faster.
I have friends working for a small local newspaper. Those laying out the paper on computers will see an increase in efficiency if they get a new computer and better software. They’ll lay out the paper faster, saving them time. Technology helps their job.
Those delivering the papers to yards all over this suburb won’t see that efficiency. They’ll get a better return by getting a new truck and improving gas mileage. The two groups could meet in the middle if new routing software could be used to plan a more efficient delivery route. If you surveyed both groups, I bet the ones slinging papers into yards see no efficiency in technology, while those in the office love it.
Technology is worth the investment when it makes a task cheaper, easier and faster. If technology your considering doesn’t do at least two of those three, carefully consider keeping your money in your pocket.
This attitude toward technology may explain why only one third of small businesses are planning to buy new hardware in the next six months, while three quarters of midsized businesses plan to add hardware. Small businesses lean more toward software, with 42% planning new purchases.
How can companies buy new software but not new hardware? Doesn’t everyone need a faster computer, like, tomorrow? As shiny and enticing as new computers are, small businesses using them for back office accounting see far less benefit in new hardware than large businesses creating 3D drawings.
But one area small businesses should examine more closely is mobile devices because the technology can help many types of jobs. Any company with outside sales, service or support personnel can schedule more calls and react to changing plans faster with better mobile communication. A cell phone in the pocket is a start, but a smart phone or PDA with e-mail may allow an exterminator to respond faster to an emergency call and make a customer happy. Or, when finished, look up other customers in the area and check in. This type of service makes the customers feel happy and makes the company look proactive and supportive, all important steps for customer retention.
I was surprised to see 20% of small businesses in the CDW study report that IT problems disrupted customer needs for 2 to 5 days. That’s a long time for technology problems to clobber your ability to serve customers. Maybe that’s why they don’t want to buy as much new technology: they don’t trust what they have.
I bet you that most of those IT problems revolved around crashed systems and lack of good backups. Small businesses take their IT paranoia too far when they scrimp on backup tools. Large numbers of studies show small companies losing data, whether through major disaster or minor office screwups, struggle and fail within a short time.
If you’re one of those small business people who doesn’t trust technology, I can understand. But if you don’t trust technology, please back up and find a technology dealer or consultant you can trust to help you do tasks cheaper, easier and faster. Maybe next time CDW does a survey, you’ll be in the midsize business category.
