How failure to use technology is costing small businesses

Posted on
5th July 2018

Small businesses who fail to use technology properly could be missing out on higher productivity. Any business in the modern world should be harnessing the power of technology to save on costs and increase profitability. The increased use of technology in business is now being promoted as part of the answer to the UK’s productivity problems.

Be more Magpie than Ostrich

A top UK business group has argued that British businesses should behave more like ‘magpies’ than ‘ostriches’. They mean that firms should pick the best tried and tested technologies available to them, rather being ostriches who are stuck in their ways and tend to stick their heads in the sand. The Confederation of British Industry (CBI) report, ‘ From ostrich to magpie ’, said that failure to use existing technology was leading to low productivity by firms and a lower rate of pay. The CBI estimates that over £100m could be added to the UK economy if businesses adopted readily-available technologies.

The business group argues that the government should ensure that proven technologies are reaching more businesses.  The ‘proven technologies’ cited include:

●  cloud computing
●  mobile technology
●  e-commerce
●  cyber security

Yet UK firms still underperform in adopting these IT strategies especially when compared to international rivals – for example – in 2015, the proportion of UK firms adopting cloud computing was nearly 30 percentage points below Europe’s best performers , according to the CBI report.

The CBI Director-General went on to argue that: “At a time when the public purse is tight, encouraging new technology take-up is one of the most effective routes to raising productivity.”

Government focus on improving small business productivity

The Government has set up a committee focussing on what can be done to improve business productivity. The Department for Business, Energy and Industrial Strategy called on organisations to share what they think could be done to boost their performance.

‘Best practice’ technologies could improve HR
SMEs have to handle a wide variety of tasks in the day-to-day running of their business, from accounting, to sales, to marketing and communications. The committee heard about how small businesses need more help with one important aspect: people management. Ben Willmot, Policy Head of the CIPD , the professional HR body said that “a lot of small business owner-managers don’t know what they don’t know.”  He explained that small business managers often had a ‘blind spot’ when it came to managing people and therefore overlooked how stronger HR practice could help.

The CIPD evidence supported the automation of HR tasks to boost productivity. The government review document identified ‘best practice’ technologies which could increase productivity including “software for automating and digitising various aspects of HR, thereby reducing costs”.

While the Business Productivity Review’s call for evidence closed this month, on 4 July, the review forms part of the government’s wider industrial strategy which was launched last November.  It focuses on five ‘foundations’: ideas, people, infrastructure, business environment and places.

The perils of making-do

So how do some small businesses operate without the right technology and what are the risks?

● Old-fashioned paper – Incredible though it may seem, some businesses still rely on paper to keep records, prepare quotes, issue invoices, do their accounting etc.  Not only is this time-consuming but it can lead to a higher rates of inaccuracy and mistakes.

● Out-of-date-technology – Some businesses struggle on with inappropriate technology. They hang on to old computers, laptops or fail to upgrade and maintain software. Not only is this highly inefficient, you are leaving yourselves open to viruses, malware and sudden loss of data.

● Insufficient technical support – Going without proper technical supports is a false economy. Too many small firms continue to rely on a member of staff who ‘knows a bit about computers’ or on a friend or relative. When your system is unacceptably slow, your critical systems fail or key data is lost, every business should seek knowledgeable and professional help. In fact, a study found that SMEs are the businesses most likely to have key functions carried out by non-experts – the DIY-approach of some firms is putting businesses at risk, according to the survey of over 5000 SMEs by OnePoll commissioned by Jobandtalent.

How to use technology to improve your business

It’s clear that businesses can boost their performance through the use of IT. There are a number of steps you can take – our starting tips include:

● Pick and choose ‘best practice’ technologies – As the CBI report suggest, survey the different technologies available and choose the ones which will suit your business best. Do you need access to your systems while ‘on the go’ or from remote locations? Then make sure your firm adopts cloud computing. Are you harnessing the power of online shopping? If not, explore e-commerce.
● Check your cybersecurity – one area which should not be neglected is cybersecurity. Given the many threats from cybercrime eg. ransomeware, data theft and malware – it is vital that all firms ensure they take measures to protect themselves.
● Update hardware and software – Obtain advice on whether you are using the best computer hardware and software. Older equipment will result in repair and support costs as well as leaving you open to cybercrime. A good IT firm may also be able to advise on the most attractive purchasing options.
● Identify technical support – If you don’t have proper in-house expertise, identify a reliable and professional source for technical help. Qualified and experienced IT experts can become familiar with your firm’s needs and challenges, offering solutions and assistance. Turning to a reputable IT firm will be more cost-effective and efficient in the long-run, leaving you free to concentrate on your business.

If you want to find out more about how better use of new technology can help your business then contact 360ict Ltd. We offer small businesses reliable and affordable IT support solutions that flex with your needs. Whether you want support for your IT team or a fully-managed hassle-free IT service, we can help you make the best of your business processes.

Speak to us about our special small business IT support solutions.

To arrange your on-site review or talk to our IT support team about your options, call 0208 663 4000 today.

If you require any further advice or information please do contact us on 0208 663 4000 or Contact Us online.

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