IDC finds local small business plays hard and fast with technology

In the independent research company’s latest research titled, "Understanding How Australian Small Businesses Buy Technology: I Want it and I Want it Now!" small businesses operate in a highly dynamic environment and success means reacting instantly to changing conditions.

This market is valued at $10 billion in 2007 and represents 25 percent of total Australian information and communication technology (ICT) spend.

In IDC’s latest study, Australian Small Businesses will often purchase technology as a reaction to change. For SMBs technology is critical, providing competitive advantage and increased productivity. Technology directly impacts their bottom line. So when conditions change, the purchase has to happen quickly.

Jean-Marc Annonier, IDC's research manager for Small and Medium Business Markets said these businesses purchase technology very differently to enterprise organisations.

The chains of command in small businesses are short, with business managers often move very quickly from need-identification to a purchase-approval.

"A small business' entire purchasing process tends to be extremely short and requires huge reactivity from technology providers - the number of touch points a vendor will have with a customer is reduced to an absolute minimum. Busy managers don't have the time to go through lengthy sales cycles," said Annonier.

When the purchase concerns highly commoditised products such as PCs and printers, the entire sales cycle might be skipped altogether. Decision makers will often go to the closest retail outlet such as Dick Smith Electronics or Harvey Norman and purchase on an ad hoc basis, he said.

"The current economic conditions are very favourable to small businesses, more than 10 years of solid economic growth have put businesses in a financial situation propitious to investment. Technology is one of the major vehicles that will drive future growth for these organisations," said Annonier.

The IDC study also finds that vendors struggle to cost-effectively sell to a fragmented small market.

Additionally, almost half of small businesses prefer to use a single source for their IT products and services, with whom they have worked in the past and are satisfied. This result illustrates the importance of establishing a strong business partnership between IT suppliers and customers for long-term business opportunities.