A survey of over 500 UK SMEs by the Economist Intelligence Unit, commissioned by Zurich, provides further evidence that embracing technology and fully leveraging the opportunities, as well as managing the associated risks, is the key to SME success and competitiveness both in the UK and internationally. So why are so many SMEs resisting these changes?
A skills gap seems to be one of the major problems. Firstly, there is a lack of awareness amongst UK SME owners, who are under-estimating the increasingly complex technological landscape. One quarter of those surveyed for the EIU study are not actively monitoring technologies and the impact on their business, particularly in the retail and distribution sectors. Often, this is because SMEs do not have the IT skills to know what they should be looking for, in addition to cash flow barriers. Interestingly, these SMEs are also less confident in their business outlook and less opportunistic overall than their ‘tech aware’ peers.
“SME owners rarely plan beyond 12 months and in the past may have had to make one or two technology-related decisions per year, but are now having to make dozens.” said Richard Harrison, UK Managing Director at Reputation.com, at a recent Economist event. With budgets tighter than ever, it seems UK SMEs are focusing scarce resources on the faster and easier route of strengthening equipment (devices, back-up and virus protection), rather than the perhaps trickier approach of improving their overall “data culture” and the skills of their employees.
Human error is probably the biggest data risk among SMEs, yet just 46% have trained their staff and only 28% have reviewed security policies. With both critical to security, what is standing in the way?
With data culture emerging as the core data protection challenge, experts say that investing in trusted advisers to help SMEs manage risks is not a luxury, but critical to success. SME owners need to recognise when they do not have the necessary skills in-house and look to advisers and service providers to fill the gaps.
Adding to the debate, Danny Williams, General Business Industry architect at IBM, commented that the biggest talent risk facing SMEs is not just lacking adequate skills, but not being able to find them in the first place, which raises the question of whether there are enough graduates with the right IT skills in the market.
Technology is now integral to business strategy and success, and can no longer be relegated to the IT department. To compete in the increasingly connected global market, SME owners must commit to actively monitoring and improving their own and their employees’ technological skills. With the new generation of SME owners having grown up with technology, SMEs with their heads in the sand, instead of on the cloud, will undoubtedly be left behind.
This post is part of a series managed by the Economist Intelligence Unit for Zurich. Click here to view the full research.
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.
