IT does matter to SME manufacturers, study confirms

Carr’s argument was that since IT is largely commoditised, competitive advantage and gains from its implementation are only temporary. But a global study of manufacturers by Keystone Strategies, commissioned by Microsoft, has found a strong correlation between IT capability and revenue growth in the US, Brazil and Germany – although the results for the UK were inconclusive. However most recently, Durham Business School, working for Microsoft Dynamics and the Microsoft Midmarket division, has now reviewed the Keystone data – and its initial findings throw new light on the subject. For example, Durham’s researchers say the historical debate over whether IT matters has been too focused on large companies, ignores SMEs. In fact, they find that addressing the IT needs of SMEs “may enhance growth and the future development of these businesses in a way that shows that IT does matter.” They also find that among SMEs, the people who use IT are key to driving business value – indeed senior management attitudes to IT and involvement in the implementation of technology are key factors in generating business success. The keys to success for SME manufacturers, they say, are that IT should be easy to implement, utilise, manage and support – that’s how IT meets and delivers the growth requirements of SMEs. Why the divergence? “Some components of every business solution – for example PCs and network infrastructure – have arguably become commoditised as Nicholas Carr suggests,” says Paul White, director Microsoft Dynamics, UK. “However, other components, like ERP and CRM applications, have not. “If they are flexible and easy to use, they offer organisations sustainable competitive advantage. Not an and of themselves – but in the way that they help employees focus on adding value to a business and the systems’ ability to support regular, sometimes perpetual change in business processes.” Manufacturers that have got the IT equation right agree: “For me, the response to the question ‘Does IT matter?’ is a resounding, ‘for sure IT matters,” says Stuart Spink, managing director of lighting manufacturer Spearmark International. “As the technology becomes increasingly affordable, the cost benefit equation for the use of new IT solutions is expanding and giving access to what were prohibitively expensive tools for the SME to use. A good example is the Extranet we have developed: in the last 12 months we have opened up over 110 new customer accounts that would not have been cost effective to service by traditional methods.”