Small businesses are using technology to cut costs and grow business

Microsoft Corporation has released a study of the business challenges and technology priorities that small and midsize businesses (SMBs) are facing in the year ahead. The first "Microsoft SMB Insight Report," which will be published annually, identified virtualization, IT consolidation, business intelligence, software as a service and support of remote workers as the top technology investment priorities for SMBs in 2009.

Based on a five-country survey of more than 600 Microsoft small business specialists, Microsoft found that the major concerns driving SMB technology investments are declining revenue, competition from larger businesses, and general economic difficulties. In response, many SMBs are focusing on IT investments that directly benefit their bottom line - either by reducing operating costs, improving employee productivity, or acquiring and retaining customers.

According to Access Markets International (AMI)-Partners Inc., SMBs account for 90 percent of the world's workforce and more than half of its gross domestic product. Current market conditions are challenging SMBs' ability to help revitalize the economy, but the "Microsoft SMB Insight Report" forecasts that 55 percent of small and midsize businesses will maintain or increase IT spending year over year through carefully placed investments.

"Small and midsize businesses play a critical role in the world's economy and are often the first to emerge from periods of economic uncertainty because of their passion, resiliency and innovation," said Eduardo Rosini, corporate vice president for the Worldwide Small and Midmarket Solutions and Partners group at Microsoft. "The 'Microsoft SMB Insight Report' identifies areas where technology can play a role in shaping how soon and how aggressively the small and midsize business community reclaims financial stability."

Investing Wisely in IT

Because SMBs typically lack the resources or technical expertise necessary to evaluate and implement advanced technology solutions, they rely predominantly on the assistance of local technology resources.

The "Microsoft SMB Insight Report" reflects the insight of small business specialists from the United States, the United Kingdom, Canada, France, and Brazil. The following are some of Microsoft's key findings on the technologies most likely to drive growth and profitability for SMBs in 2009:

 

  • Fifty percent of the surveyed Small Business Specialists identified virtualization or IT consolidation through a small or midsize server as the technology most likely to reduce operating costs.
     
  • The small business specialists expect a 20 percentage point increase this year in the number of SMBs that use software as a service.
     
  • More than 50 percent of the small business specialists considered customer relationship management (CRM), virtualization, or IT consolidation through a small or midsize server as the best investment for maximizing business growth in a down economy.
     
  • Nearly 40 percent expect an increased interest in business intelligence and identified it as a critical tool for helping improve a customer's experience and increase loyalty.
     
  • More than half of the surveyed small business specialists anticipate an increase in the number of SMB remote workers, and nearly 60 percent expect that the shift to more remote workers also will lead to bigger roles and more responsibilities for those individuals working remotely.

"Historically, we have seen that SMBs have responded to economic contractions by intensifying their use of IT, both to cut costs and to defend and enhance their customer relationships," said Steve Reynolds, managing director for AMI-Partners. "If SMBs respond to the current crisis as they have in the past, we can expect that a sizable number of smaller businesses will invest in IT now to lower operating costs, boost employee productivity, and increase connectedness to customers so as to reap the benefits in the years ahead."

You can read the complete version of the 2009 Microsoft SMB Insight Report.

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