Growing SMEs need better Cyber Security
13th November 2019
An AI robot can now make 300 pizzas an hour. Staggering but true – a small American start-up has created an artificial intelligence-driven pizza platform which can churn out the cheesy food to meet to orders via an app, according to Forbes this month. It’s an extreme example of how a small firm using ICT, with the few staff, has the potential to become extremely successful.
Pizza may be a bit niche but from communications, sales and data management to marketing and ‘back-office’ functions, Information and Communions Technology (ICT) is now vital to businesses of all kinds. For small-to-medium-enterprises the importance of efficient and up-to-date IT is even more stark – on the one hand, new technologies can help smaller firms to compete with the big boys but, on the other, IT failure can disproportionately disrupt and affect an SME’s work and profits.
Small Business numbers growing
There were 5.8 million small businesses in the UK at the beginning of 2019 with SMEs representing over 99% of all UK businesses. What’s more, despite uncertain times, there’s been a small growth in the number of overall UK businesses, in the year ending March 2019. An increase of 1.8% has been reported which is a slight recovery from the minimal increase seen between 2017 and 2018. However, in the SME and micro-business world, there’s been a gradual fall in sole proprietors and partnerships. (ONS, Oct 2019 – the ONS data excludes the very small businesses that fall below the VAT and PAYE thresholds).
SMEs need to make their IT count
While there’s an overall muted confidence amongst business, it’s wise for businesses to make their resources work better if they are to stay competitive and resilient during possible economic turbulence.
One important factor in the success of any modern-day business is its IT operation. Today small firms have access to the kind of technology which was unimaginable even twenty years ago – easy creation of websites, e-commerce and cloud services with remote access to data by off-site staff are just some of the digital technologies which have revolutionised the way in which small businesses can work.
Importantly many ICTs are now also highly affordable. Yet while 79% of SMEs agree that investing in IT is important, only 25% have spent less than 10% of their budget on new technology , according to a 2018 survey.
How ICT is important to small businesses
ICT can bring tremendous opportunities for SMEs. High in the top advantages are increased sales, market presence and productivity:
Almost 20% of purchases are now made online in the retail industry. Online sales as a proportion of all retailing stood at 19.1% in September 2019, slightly down on 19.5% reported in August 2019 (ONS, Oct 2019).
Sector summary for online sales, September 2019:
(Value seasonally adjusted, percentage rates, Great Britain)
The survey sampled 5,000 businesses, with all businesses employing over 100 people, or with an annual turnover of more than £60 million.
The Small Business Minister, Kelly Tolhurst, recently spoke about how small firms can boost productivity through technology. She supports the CBI’s recognition of the need for SMEs to upgrade their accounting software, or run customer relationship management programmes – it’s claimed that having these systems could add another £100bn to the UK economy.
Invoicing and credit control were specific areas which could be transformed by technology – the Minister gave an example of one security business which was able to collapse their invoicing from one week’s work to a few days due to new technology. That’s a remarkable saving in time and effort, advantages which would make any small business more competitive.
In fact, the five different types of technology identified by the CBI to have a positive effect on business productivity, included accountancy software, digital capabilities, payment technologies, Customer Relationship Management and Human Resources software.
● Market presence
Growth-hungry small businesses have turned to digital marketing to increase their market presence and attract new customers. Much cheaper than traditional forms of marketing, use of the internet and especially social media (e.g. Facebook, Twitter, Instagram) can disproportionately propel a firm’s market presence. Taking it further, clever use of Customer Relationship Management can keep track of relationship-building and help capitalise on contacts made by potential customers.
Cybercrime and cyber security
However, alongside the silver linings which ICT undoubtedly brings, businesses need to ensure they are on top of their cyber security.
Cyber-crime was the ‘most disruptive single crime’ identified by 20% of small firms who had suffered crime in the previous two years, according to the Federation of Small Businesses (FSB business crime survey 2019).
Of those smaller businesses that experienced cybercrime in the previous two years, the most frequently-reported types were:
– Phishing – including spear phishing (51%)
– Malware ( 36%)
– Processing fraudulent payment online (29%
The FSB survey also revealed that for cybercrime:
●The average cost per over two years business was £7,093 over two years
●The average cost per crime is £972
●The per annum, aggregate direct cost of cybercrime in England and Wales is £3.75 billion
Yet despite the cyber threats, most SMEs significantly underinvest in their cyber security.
Any small business using IT should have at least the following basic security measures in place:
● Security software installed, such an anti-virus and malware software
● Effective and strict passwords for all systems
● Regular software updates which will include the latest security patches
● IT security-training for staff
● a written plan to deal with IT failures or cyber attacks.
More information on how to prevent cybercrime can be found Cyber Aware .
Concerns around cyber-security risks and the costs can sometimes be a barrier to smaller firms adopting new technology. However, it’s important to get regular security risk assessments . Fortunately, there is plenty of advice and support about keeping your business safe and protected online.
360ict Ltd excels in supporting small businesses with their ICT. Whether it’s cyber security advice, manging the challenges of your ICT or adding extra IT capacity, we can help.
Contact 360ict to find out more – call 0208 663 4000 or Contact Us .