Technology equals growth – most business analysts agree on that point. Intelligent use of computer technology, whether it be hardware or software, saves time and money.
And ‘time’ is the key word here. Time is a business’s most precious asset, but also it’s the one that is wasted the most. If the average small business person sat down and did some basic analysis of their working day, they might be shocked by how much time they spend doing things that don’t actually make them any money. The case of Dynaflow, a business for which improved communications meant less time travelling, is a classic example (see page 28).
Small businesses, however, have been conservative in moving towards new technology. “I am astounded, when I deal with small businesses, by the phenomenal lack of technology take-up in the first place,” says motivational speaker Debbie Mayo-Smith. Software, email, web presence, data storage and communications (let alone cloud computing and virtualisation) can be minefields for a business person whose primary skills are fixing plumbing or baking bread. They may be unaware of how much business they’re not getting through being poorly connected or, as Mayo-Smith says, “not understanding their software”. What’s more, as we’re still emerging from a recession, they’re reluctant to spend money.
Fortunately, the small business community is catching up. According to market research firm Gartner, “The small business market represents 44% of the total information technology (IT) market spending. We predict that small to medium businesses will spend $800 billion on IT in 2010. Our research indicates that midsize businesses worldwide will increase their IT spending in 2010 by 5.4% over 2009 spending levels.”
Where to begin
A small business, whether starting out or looking to upgrade its technology, needs to look at what it wants to achieve, then seek the equipment to reach that goal. “Any business should consider the future plans and goals of the organisation to ensure any investment in IT is aligned to support them and is future-proofed,” says Andrew Charlesworth, Marketing Director of Maclean Computing (www.maclean.co.nz). “How will the technology improve the competitiveness of the organisation through increased responsiveness to customers, staff productivity, decreased support or management costs, etc? If not, then what is the overall justification and can the solution be modified or extended to gain maximum impact?”
It’s also important that you realise your limitations. If you haven’t got the right software to perform the tasks most important to you, or try to maintain the system yourself, you could be courting disaster. And pinching the pennies at the outset can also be a false economy if you end up with technology that is rapidly out of date or keeps falling over through lack of proper professional support. But these days, online technology can remove those worries.
The internet has revolutionised business technology, saving costs by reducing the need for hardware on the premises. Small-to-medium enterprises (SMEs) are now spending less on computer gear and more on online technology, according to the Sensis 2009 e-Business report. Web-based technology has penetrated just about every business function. It’s cost-effective, and it’s easily tailored to the business’s particular needs. Here’s how some of the modern solutions work.
The term ‘cloud computing’ means having all your computing power stored remotely, instead of inside a box sitting on top of or under your desk, or in a corner of your office. Providers of cloud services have large rooms (some as big as warehouses) filled with computers all connected to the internet. They rent space on these computers to other businesses, which pay only for the amount of data they use and/or store. So rather than running your own server (a large computer that ‘serves’ a number of individual machines), you rent one located elsewhere. Your data may be stored in this country; it may be overseas. But it’s there, when you want it, and someone else makes sure the server is always operating correctly. Your rental agreement can include regular automatic backups. Through the cloud, businesses can now rent all their computing infrastructure via hosted, managed services, saving money on maintenance, hardware running costs and even office space requirements.
Cloud computing also incorporates virtualisation – where something that you’d normally consider a piece of hardware (eg: a server) can exist as a piece of software, performing the same functions within another computer. Data centres use virtualisation to save on hardware, thus reducing their capital costs, and therefore what they charge you.
A leading evangelist for cloud computing is Mike Snowden, CEO of OneNet (www.onenet.co.nz), for whom SMEs constitute about 20% of its business, and growing. Snowden quotes a Gartner study that predicts 20% of organisations worldwide will have no server infrastructure on their premises by 2012. A key benefit of a small business being ‘in the cloud’, he says, is you get the same level of service as a large-scale enterprise. “You have best practice, you have best-in-breed hardware, you have highly skilled people and you have relationships with all the major vendors so you can resolve problems,” he says. “That is delivered to smaller businesses at a price they could never ever afford if they were trying to do it themselves.”
For small businesses just starting out, going straight to the cloud gives them the services they want at a pre-determined cost, plus room to expand as their business grows. The important first step is, once again, to look at your needs, then select the cloud-based services that fit. Get a service level agreement (SLA), and read it carefully. And be sure that what you’re getting is a true ‘cloud’ service, Snowden warns. Some distributors may talk about selling you an ‘internal cloud’ that sits on existing equipment in your office, which is misleading. “If it’s inside your firewall, it ain’t cloud,” Snowden says.
Web technology has brought a new benefit to small businesses: software-as-a-service (SaaS). Rather than buying a piece of software on a CD, then installing it on each computer, you can subscribe to it online. The major benefit here is that the software is always up to date, and you pay a monthly user subscription licence. Microsoft’s Office 2010 suite, just released, offers multiple cloud-based functions for collaboration, word processing and spreadsheets, and even allows access to documents through mobile devices. It also incorporates communications functions such as instant messaging and presence, explains Anne Taylor, Microsoft New Zealand’s Information Worker Business Group Manager. “With instant messaging and presence I can determine whether the people I work with are available, in meetings or out of the office,” she explains. “That then allows me to customise my communication with them based on their presence status. If they are out of the office and I need an instant response, I’ll call them on their mobile rather than sending them an email.”
She adds, “If I run a small business that sells a product to people across the country or outside of New Zealand, I can set up Live Meetings with my customers and present to them without having to fly all over the country.”
Managing financial matters is another area where online services can help businesses “solve pain and make their life easier”, as MYOB’s New Zealand General Manager, Julian Smith puts it. While it also offers management, mentoring and customer relationship services, MYOB (www.myob.co.nz) specialises in accounting and its new flagship product, Live Accounts, is a fully online accounting service that is about to be released from its beta (test) version. MYOB also plans to sell its full range of accounting software online in the first quarter of next year. Smith says online accounting services, which can be accessed anywhere, can boost an accountant’s productivity by 40%. “Our focus is to use online technologies to make the processing and the aggregation and interpretation of business data so much more efficient, so the accountant can spend a lot less time doing that and a lot more time giving good advice to their client,” he says.
MYOB offers desktop (PC-based) services as well as online and cloud solutions, although Smith says small businesses are wary of adopting the cloud – a view for which he has some sympathy. A recent survey of SMEs conducted by MYOB found that only four percent found operating their business entirely online “very appealing”. “About 60% want the best of both worlds – they still want to work on a desktop but access the internet when it suits them,” Smith says.
The main reasons many small businesses are reluctant to go fully online concern security (wondering where their data is stored) and control. Over time, Smith says, businesses will become more used to the idea, but for now, if the customer wants to keep things close, that’s what they get.
Quite a few of the SaaS functions also qualify as hosted or managed services. A hosted service provider delivers IT functions such as infrastructure, applications, security, monitoring, storage, Web development, website hosting and email, over the internet or other wide area networks (WAN).
Cyberhub (www.cyberhub.co.nz) provides such services for SMEs. Managing Director Dan Ballard says this saves businesses the cost of employing full-time staff to do them. Paying a fixed monthly charge for these services enables small businesses to budget more effectively, and they don’t have to worry about backups or maintenance. Having your server as a hosted service also saves on the hardware you have in your office. “Some of these hosted solutions enable businesses to not spend so much on new computers and to use older technology for longer,” Ballard says. “All their data and programs are in the data centre, so if their computer blows up it’s not an issue; all they do is get another computer, log in and away they go.”
Keeping in touch these days involves more than just the phone on your desk or the mobile in your pocket. ‘Unified communications’ is the ability for your phones and your computers to work together, allowing calls to be directed and redirected as required, integrating email and instant messaging; even holding meetings by teleconference or videoconference. Much of this has come about through telephony being delivered through internet connections, commonly known as Voice over Internet Protocol, or VoIP.
Cisco (www.cisco.com/web/ANZ) specialises in unified communications systems, and expects its small business market to grow 30% year on year. Kris Boyd, SMB Market Manager, says for a small business, IP telephony allows the user to consolidate their voice and data services, getting everything from a single provider and thus saving costs. What’s more, the solutions offered are as flexible as the customer wants.
“More often than not with unified communications the customer doesn’t know what they don’t know,” Boyd says. “They may want to plug some security cameras into their solution and reduce the amount of break-ins they get on remote sites. It could be being able to have videoconferencing or it could be simply being able to direct a call to the most available person very easily and confidently, which stops business being lost. It’s finding those two or three things that are really pertinent, and it’s different to different customers.”
Boyd says switching telephones to VoIP can bring cost savings of 30-40% (this is because VoIP calls are usually billed on the amount of calls you make rather than a monthly rental). You don’t even need a physical phone on your desktop; they can exist as a piece of software on your computer, and you can take that phone with you. This so-called ‘soft phone’ can connect wirelessly to a hotel’s wireless system, for instance, and function just as if you were back in your office. You can integrate it with your mobile device too, then direct calls however you wish to answer them, or send them to voicemail. Read the story in the box below about how one business was transformed through unified communications.
“What’s particularly unique about New Zealand businesses is we have a very, very low adoption of website usage,” says MYOB’s Julian Smith “About 27% of Kiwi businesses have a website, which is remarkably low and quite a concern, because the single biggest pain point businesses have when we survey them is how to market themselves, and how to be found and how to get new clients.”
And unless you’re a real whiz at web design, you’re not going to end up with a site that people will want to visit, and more importantly, visit again. The web is one of the most potent marketing tools available, but a dull site with busted links or outdated information is useless.
Most businesses, Smith says, prefer to spend $500 or less setting up a website, and so end up doing it themselves (sometimes with the help of a web design hobbyist). What this method usually delivers is a ‘billboard in the desert’ – a website that never gets found and never gets any traffic.
With that in mind, MYOB plans to launch a range of quick and cheap website building tools later this year, with explanations about such things as how to get the best results from search engines. Next month’s Start-Up will feature an in-depth look at web-based marketing and commerce.
This may seem like an odd one – why would a small business want satellite positioning hardware in its vehicles? “We say as a rule of thumb you’ve got to get a 15% lift in productivity, just because you become self-policing,” explains Ian Daniel, Vice President, Asia Pacific for Navman Wireless (www.navmanwireless.co.nz). Navman is also marketed by Telecom as Locate Plus.
For a business with a small fleet of vehicles, such as a plumber or an electrician, being able to remotely monitor where your vehicles are at any time means you know they’re on the job, and you can track how long they’re actually there – an important factor if you’re charging your customers by the hour. GPS monitoring prevents abuse of company vehicles and company time, and also assists in dispatching vehicles to jobs. It all works in real time and saves communication costs, because they’re built into the connection contract. A Navman system costs $99 per month per unit on a 36-month contract, with a one-off installation fee of $150 per unit. It also has built-in timesheets and if anyone tries to tamper with it, the dispatcher is alerted.
“We have had customers break down the return on investment, but some of them are too embarrassed to share that data with us,” Daniel says. “They think they’re doing a pretty good job running their business, but you can’t manage what you can’t monitor.”
Do some training
How well do you really know your computer, or the software it contains? Do you know how to use the diary and calendar in email programs like Outlook? How much should you pay to get a website built? Do you know how to file a GST return online? A little learning could be a big saving for you.
Techtorium Computer Training
(www.techtorium.co.nz) runs computer courses that help self-taught PC users improve their computer literacy. “Some small businessmen are scared of getting onto the net to do stuff,” says Techtorium’s Principal, Patrick Dowling. “A little bit of training will help you get there.”