IT FOR THE SME: Size does matter in the IT revolution

Small- and medium-sized enterprises will be left behind if they don't think big, says Stephen Pritchard
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The Independent Culture
Successive governments have pointed to the small firm as the engine- room of the economy. Where information technology is concerned, though, smaller companies risk running out of steam.

The pace of change in computing, coupled with rising pay for skilled IT staff, means that small businesses find it hard to keep up. New operating systems, software upgrades, networking or connecting to the Internet are all IT issues where large organisations can draw on the resources of a central computing department big enough to employ, say, a networking specialist or an engineer who is an expert in an operating system such as Windows NT.

In smaller firms, these resources are simply not available. Businesses of all sizes worry about issues including the Year 2000 problem or European Monetary Union, but in practice many small and medium enterprises (SMEs) are struggling to make the most of their existing investments in IT.

Microsoft defines small businesses as those with less than 100 computers, and medium firms as those with less than a thousand. "We have been looking quite closely at the SME sector in the last year or so," explains Microsoft's IT skills development manager Debbie Walsh. "SMEs are increasingly thinking about how to use their PCs or how to network or how to use the Internet."

Research by Microsoft points to a skills shortage across the IT industry, but smaller firms are particularly badly hit, with a lack of expertise in operating systems and applications. They not only lack in-house resources; much of the existing training on the market does not meet their needs.

According to experts, the people responsible for IT in small companies benefit more from a broad knowledge of several aspects of computing than an in-depth knowledge of one or two. There is not the capacity for a networking specialist and operating systems expert. One person will have to do both.

Making up for lack of skills by bringing in a contractor or consultant is expensive. Instead, the IT industry wants to encourage businesses to invest in their own staff. According to Ms Walsh, the old argument against training - that trained staff move on elsewhere - is not supported by statistics. "Somebody who is going to move is going to move anyway," she says. Microsoft's own research suggests that training is actually a better way to keep staff than higher salaries.

"I would encourage even a small business to invest in the staff they have, even if it is a half-day course," she says. "Getting up to speed doesn't mean a week-long training programme."

This means training needs to be accessible, in terms of when and where it takes place and how much it costs. An evening course at a local college is more useful than time away from the business, at a specialist provider. IT companies could also do more to deliver training over the Internet and by ensuring local college courses are up to date.

As a business grows, its IT needs become more critical and more complex. There is a distinct jump from a business with a number of computers to a business with an IT system. At this level, a firm is far more likely to have its own IT specialists; at the same time, they will have more demands placed on them. Maintaining a client-server architecture, e-commerce, or bespoke applications are all areas which absorb skilled IT specialists' time. This makes finding time for training all the more difficult.

Vendors concede that they have not done as much as they could to help small firms; the focus has traditionally been on the corporate market. "The SME marketplace is one that has not been served as well as it should have been in the past," says Keith Smith, director of education at Oracle. He admits that the skills gap is a live issue for smaller firms, which need value-for-money training. "Pressures in the SME sector are greater than in a major organisation," says Smith.

Smith points out that smaller firms cannot neglect their IT skills if they are to develop as businesses. "We need to make training more accessible and cost-effective," he suggests. For its own products, Oracle is turning to the Internet to deliver training on demand, through the Oracle Learning Application.

Oracle and Microsoft might be business rivals, but they agree that small firms face problems in expertise in all aspects of IT. "It is across the board," Smith says. "Within organisations, you see individuals who develop a broad range of skills at a higher, broader level. In a larger organisation, you have a smaller set of skills in more depth."

Oracle, Smith says, is developing courses to meet the needs of the former group. It is also working with the National Computer Centre to increase the training that is offered to smaller firms. Oracle currently runs weekend training programmes for IT contractors, and is looking to extend that to SMEs.

IT, like any investment in a business, is a finely balanced combination of spending on equipment and people. Neglecting one means the other is not being used as effectively as it should. "How do businesses make the maximum return on the investment they have made? They have to invest in people and training," says Smith. As IT suppliers wake up to the importance of smaller firms, that should become easier, and cheaper, to achieve.

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