Small firms neglect technology, advice

Small and medium-sized enterprises in New Zealand see little potential in information and communications technology to develop their business, a new survey has found.

Small and medium-sized enterprises in New Zealand see little potential in information and communications technology to develop their business, a new survey has found.

In the most recent iteration of a regular survey by Stuart Locke of Waikato University’s management school, 70% of SMEs indicated that changes in information and communication technology would have no impact on their business plans, a substantial rise from 45% in March this year.

Even more topically, 72% predict no impact on their businesses from the government’s broadband telecommunications plans.

“I just think they don’t think much about [potential for improvement from ICT]. SMEs don’t do planning,” Locke says. They’re too busy handling the problems of the day, he says. “They’re treading water. They’re not out there searching for solutions that could improve their efficiency and reduce their costs.”

Locke has been running the quarterly survey for two-and-a-half years. For at least the past two years, SMEs have shown up as being “appallingly ignorant” of government policy that could help their businesses, he says. “They always think things will be better next quarter, or in a year’s time.” Yet when asked to look back, they also report business was better a year ago than it is today.

“If a friend or competitor says to the small businessperson, ‘Hey I’m using this software’ or whatever ‘and it’s great’, they might look at it, but not otherwise.”

He thinks the attitude to ICT is similar to the attitude to potential growth in the business. “You tell them they could double the size of their business, and the answer is ‘No, it’s too much trouble’.” In a general context, he says, they’re usually referring to compliance with government regulations and procedures, but it could be similar with the bother of evaluating and choosing technology. And the answer in both cases is similar: they could use someone else to give them advice or handle the difficult or tedious aspects.

One problem here is the lack of ICT expertise among the people to whom the SME usually goes for advice, their accountant or their industry or trade group, he says. “We should build competency and expertise profiles for these advisors to small businesses.”

The number-eight wire attitude still prevails too, he suggests. “They say ‘I can do it myself, I don’t need to get advice’.”

Simon Riley of Wellington’s Net Impact says SMEs’ perception of broadband plans as irrelevant to them is “quite frightening”.

“There seems to be a huge disconnect between what is being promoted and what people want”.

Several delegates at the conference last week where Locke’s and others’ findings were presented were worried that the government’s expenditure on subsidising broadband links would go partly to waste because large sections of the population did not perceive them in advance as useful. The alternative they said, is the philosophy of “build it and they will come”, which is often misguided.

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