Delivering IT for specific needs of medium-sized businesses remains one of the biggest challenges for the IT industry

Delivering IT that meets the specific needs of medium-sized businesses – across multiple sectors – remains one of the biggest challenges for the IT industry. Many technology suppliers have consistently misunderstood this market, often bracketing the needs of mid-sized enterprises with those of small business. Too often, they have failed to recognise that M businesses have many of the same requirements as larger organisations yet typically lack the resources to pay big-ticket prices, deal with high levels of complexity or tailor applications to fit their specific requirements.

Technology giant IBM annually explores the IT strategy of more than 1,200 mid-sized companies in 11 countries, gauging their priorities for the coming years. In its latest study, mid-sized companies across all industries said that “access to capital” was the greatest barrier to the adoption of IT.

Mobile working

The effect of that can be seen in areas such as mobile working. Many large organisations have embraced the concepts of mobile working, seeking to enhance productivity and improve staff retention by allowing more flexible working. Yet according to research by Citrix Systems, UK medium companies lag behind.

Its survey of over 200 UK-based companies showed that while 76% of larger companies had adopted technology to support home working, fewer than half (43%) of M businesses had gone down that path. Money constraints may account for such delays in technology adoption, but they also make the option of outsourcing more appealing. An analysis of mid-market buying behaviour at companies in the US and Europe conduced by analysts at IT adviser Forrester Research shows that demand for all manner of IT services is growing (see graph).

Despite the attraction of being able to tap into IT skills without having the costs associated with employing dedicated staff, purchasing IT services can still be fraught with problems. According to research undertaken for Companeo, an online services directory, over 60% of M businesses are deterred from working with large IT service providers because of a perceived bias. The service providers have talked of working with M businesses, but “the results of the survey show that the reality of the situation falls far short of the promises made”, says Andrew Blackwood, UK manager at Companeo.

This is a view confirmed by Forrester, which notes that nearly half of small and medium businesses prefer purchasing IT hardware, software and services from local value-added resellers rather than direct from suppliers or online.

Indeed, the notion of alternative delivery models for IT to the M business is well established. M businesses have pioneered the use of software delivered over the Internet – such as the customer relationship management applications sold by and more general business software offered by NetSuite. Over the coming year, M businesses will continue to look at alternative models for IT as the most effective way to obtain high-quality, integrated, reliable IT solutions delivered at an economical price point, predicts IT advisory group Gartner.

For example, the ability to get access to a unified communications platform will convince many M businesses to invest in hosted voice-over-Internet-protocol (VoIP) services, predicts Gartner – rather than having to implement VoIP by upgrading their PBX. To date, only 2% of the SME market has adopted hosted VoIP, but Gartner predicts this is set to rise rapidly.

Similarly, the M business sector looks set to lead the way in adopting enterprise application appliances, according to Gartner. The advantages of pre-packaged applications running on purpose-built servers “holds many of the same promises as software-as-a-service, without forcing customers to store and access their data outside the firewall,” Gartner observes.

Henry Catchpole

Henry Catchpole runs Inform Direct, a company records management software company which simplifies the process of dealing with Companies House. The business was set up in 2013.

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