How SMEs can boost productivity with the use of technology
20th April 2018
More small businesses are recognising the role which new technologies can play in improving their commercial performance. Whether it’s known as IT, ICT or digital capability, UK SMEs are increasingly investing in it to boost their productivity in areas such as communications, automation of routine tasks, digital marketing, data analysis and the convenience of cloud computing.
SMEs and the economy
SMEs (Small-to-medium sized enterprises) have long played a vital role in the British economy. When there are an estimated 5.7 million SMEs in the UK in 2017 ( BEIS ), accounting for 99.35% all private UK businesses, their performance is key to the UK’s growth and productivity. One report claims that “if a lot of companies do just a little bit better it would add £130 billion in value to the UK economy each year.”
Apart from contributing to the overall economy, the performance of any SME is above all important to their own profitability and survival. One strategy which the most successful business-owners and entrepreneurs employ is to take a step back from everyday business and examine their operation for any obstacles or improvements to the way in which they work. Today, any review of your business should include considering your firm’s use of IT. In the current challenging political and economic climate, it’s important to exploit every strategy to stay ahead.
The Productivity Puzzle
Productivity is a major tool for assessing how your business is performing. Britain’s recent productivity problems have been well documented. So what is it, and how is it measured? Put simply, productivity is broadly measured by dividing output (the volume of goods and services produced by an industry) by labour input (numbers of workers and hours worked).
UK productivity growth has stagnated since the 2008 economic downturn. However there have been some hopeful recent signs – government figures released this month show there have been small increases in recent months.
The productivity puzzle refers to the unusual continued flat lining of productivity over the last decade when economists would expect to see more variation. The UK’s productivity is lower than in other major developed economies including the US, Germany and France. One reason often given is the relatively low levels of investment in UK business.
Investment is technology is a major route to improving productivity. While there are some alarming reports about a lack of engagement by SMEs with the issue of productivity, on the other hand, the same report said that over half of UK SMEs have already invested in new technology and software in the belief that it will add to staff efficiency.
Six things SMEs can do to boost productivity through IT
Economists, politicians and business-owners have long-grappled with trying to solve the UK’s productivity paradox. Numerous factors have been cited. One factor which comes up time and time again for SMEs is the significant barrier which IT problems pose to workplace productivity. Millions of working hours are spent each year grappling with everyday IT problems – from lost files, lagging networks to printer breakdowns. Employees waste a significant amount of time trying to resolve IT failures when they want to be getting on with their job.
Some SMEs are also still working in old-fashioned ways – for example, dealing with paper-based systems – when the world has moved on. Employees can quickly become demotivated working with outdated systems and equipment.
Business-owners and managers need to recognise how IT can boost their business – here are 6 ways in which you can make the most of IT in your business:
● Consider moving to the cloud – having your IT capability and data available over the internet 24/7 can increase the efficiency of many business operations. Cloud computing enables remote working and workers who want to use their own devices at work.
No more sending files to each or waiting till you get the office to look up data. Currently about 69% of UK businesses use cloud-based applications, and more than half (53%) say that they are critical to effective remote working (British Chambers of Commerce).
● Increase your internet connection speed – Government figures have revealed that the size of a business is related to the internet connection speed it is likely to subscribe to. While 62% of businesses with 1,000 or more employees subscribed to superfast broadband in 2016, only 5.8% of the smallest businesses did so. ( ONS 2017 ). In 2016, of all businesses with 10 or more employees, 78% had an internet speed that was sufficient for their business needs, compared with 67% of businesses with less than 10 employees .
● Ensure your employees are trained – new technology can only work at its best when staff know how to use it. Unfortunately the current skills shortage is not helping – the manufacturing, technology and construction sectors have claimed that finding skilled staff was in fact their greatest challenge in a YouGov research of 1,000 UK SMEs.
● Offer e-commerce – whether it’s B2B or B2C, each year has seen an increase in the number of online shoppers. While 58% of businesses with 1,000 or more employees made e-commerce sales, just 8.5% of businesses with less than 10 employees did so in 2016. (ONS 2017). It’s worth exploring equipping your website with e-commerce capability.
● Don’t forget Cyber Security and Data Protection – as technological change continues to affect all business sectors it’s important to remember to also invest in cyber security and data protection. Cyber crime and data breaches can cost your company financially and reputationally.
● MOT your ICT use – even the most savvy of businesses may not be exploiting every IT option available to maximise your firm’s performance. The IT landscape is a fast-moving one where new features and products constantly. It’s worth seeking professional advice for a review on your ICT use.
360ict Ltd can help small businesses to maximise their productivity and stay competitive. We offer no-fuss IT advice and support for a wide range of areas including HR Systems, Accounting systems, risk management, print services and much more.
360ict can manage the whole of your IT services or we can provide support for your in-house IT team – you choose.
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.