IT investment focused on efficiencies

Cambridge Online Systems says that sixty per cent of UK Small and Medium-sized Businesses (SMBs) are focused on improving systems and processes in order to find efficiencies as they prepare for growth as the downturn recedes over the next 12 months.

This focus has also been the winning formula for reducing impact of the downturn to date for the majority of SMBs (59%). In answers to a separate question SMBs also declared that if they had their time again they would focus even harder on improving systems and processes to find efficiencies (32% gave this response), ahead of innovating to build new products and services and income streams which 29% gave as their key focus in retrospect.

Optimisation of existing IT investment and infrastructure remains the core focus even today. Integrating more back office applications with familiar desktop applications like Microsoft Office is the top area of IT focus this year; ahead of integrating Customer Relationship Management (CRM) with other departmental systems such as Accounts and delivering more information to field engineers on the move through deployment of mobile devices like tablets. The latter two were given equal weighting in terms of focus. Interestingly Cloud Computing was considered the IT development least likely to be addressed this year.

Nearly half (45%) of the sample of businesses with more than £500,000 of annual sales, had no CRM systems in place at all and only 12% were planning to implement a CRM system in the next 12 months. A quarter (25%) of the sample had no interest in implementing a CRM system. Nearly one in five (18%) businesses are in the middle of projects to integrate their CRM systems with key desktop and back office systems.

When asked what investors in CRM (will) use it for over half (56%) said they use it to maximise sales opportunities; while 38% use it to measure the effectiveness of marketing activities. A third (34%) use it to analyse trends in customer buying behaviour, while one fifth (19%) are using it to help do more business via the web. Nearly the same percentage (17%) wants to use it to provide field engineers with vital up-to-date information so they can serve customers better.

Nearly two thirds of businesses (64%) are focusing on trying to deliver higher quality information to senior management to support better business decision-making. Other recent IT spending studies back up the fact that lack of timely and accurate business information is hampering business decision-making. Nearly half (47%) are increasing productivity of back office functions, while a quarter (24%) are looking for better compliance, reporting and risk management systems. A slightly lower number (23%) are focused on reducing accounting and auditing costs. 18% are looking for better visibility of stock levels to enable faster delivery dates to customers.

Nearly a quarter of the sample (22%) have already executed ERP projects to integrate separate departmental systems and some 6% are planning to do so in the next year.
IT budgets are holding up well in 2011 with over a third (35%) increasing IT spend compared to last year and half saying it will stay the same. The balance (15%) will see IT spend reductions this year.

Surprisingly given the number of column inches devoted to the indicator, half of the sample do not measure IT investment in terms of Return on Investment (ROI). Over a quarter (28%) expect IT spend to pay back within two years and 12% expect it within a year. A tenth of the sample want ROI within six months.

Ray Olds, chief executive officer, Cambridge Online Systems, commented on the findings: “There is no doubt that despite the depth of this downturn businesses have generally looked to put technology and integration of business applications at the very top of the boardroom’s agenda to help weather the storm.

“Specific focus has fallen on integrating front and back office systems and bringing departmental systems together. These moves together with implementation of CRM systems; and garnering better and more timely business intelligence; have enabled businesses to trade successfully through the last two years despite the fact that nearly half of respondents (44%) saw sales volumes falling.”

Clive Longbottom, senior analyst at QuoCirca, commented on the findings: “This research shows that SMBs are focusing on how best to manage and facilitate their business processes. In many cases, the lack of IT systems such as CRM and ERP applications may be a temporary block in this aim, but the majority want to optimise what existing systems are in place, maximising the perceived value of existing investments without the need for massive change in their existing IT systems.”

Cambridge Online Systems, a leading IT systems and services provider, has published the results of its first annual East of England Regional Business Survey, providing a comprehensive snapshot of what 100 businesses across the region are focusing their IT budgets on.