While UK SMEs lead Europe with Internet uptake, manufacturing is behind, says Cisco

UK and European small to medium size businesses (SMEs – 10 to 499 employees in this case) are turning to the Internet ahead of their European counterparts to gain competitive edge and increase efficiency in difficult economic conditions – but manufacturers are not at the front of the queue. This is chief among findings of new research commissioned by Cisco Systems and carried out by International Data Corporation (IDC) among 3,720 companies’ IT departments throughout Europe. One in four UK SMEs (638 of the survey) are now using the Internet seriously, against an average of one in five SMEs for the rest of Europe, it claims. The result is an increase of almost 50% on last year’s figure, and Cisco takes heart in what it sees as UK businesses demonstrating acceptance, increasing adoption and indulging in more sophisticated use of Internet technology in spite of tougher economic conditions. According to the research, Internet ‘Fastrackers’ (those using the Internet to communicate internally and improve relationships with customers and partners) are experiencing increases in revenues of nearly 75% on average, and reduced costs by 50% “as a direct result of their use of Internet technologies”. And indeed the survey reveals that ‘Fastracker’ businesses look set to maintain their competitive advantage as their commitment to Internet technologies continues. Further, almost two thirds of Fastrackers said that implementation of additional Internet technologies had been driven at board level. However, Cisco’s Richard Bradley confirms that manufacturers (96 in the UK component of the research) are not in the vanguard here. “The highest number of Fastrackers are in retail and wholesale… For manufacturers there’s good and bad news – of the Fastrackers they are the least, but they’re also very enthusiastic. “Our research shows they have plans, but they’ve not actually made the leap. Manufacturing has a long way to go.” He interprets the results as showing manufacturers facing several drivers: “peer groups, suppliers demanding it, improvements to the top line and improvements to the bottom line.” Meanwhile, the Cisco research also reveals that less than half of SMEs are using Internet technologies at a basic level. However, 80% of these ‘Laggards’ at least have a web presence. Cisco takes this as further cause for optimism, noting that one in six of last year’s Laggards “have committed to dedicate as much as 45% of their IT spending towards e-business solutions. Says Bradley, “We have a five phase adoption strategy with the DTI, from email, to website presence, to e-commerce, e-business and ‘ecosystems’.” And Cisco he says is ready to help manufacturing SMEs benchmark themselves, do a “reality check, and find out where they are.” Cisco’s advice: “Keep funding internal and ensure it directly relates to the company business plan and stage of development. Ensure new technology fits with existing systems. Partner with a competent IT implementation partner. Track financial as well as efficiency savings relating to new implementations, in order to understand return on investment. “Continue to invest in technology in direct relation to the profit made. Do not rely on one sales channel. On-line selling should be part of a varied channel to market strategy. Investigate sales through partnerships. Research and evaluate the best implementation for your vertical market – one solution does not best fit all.”