It is the same old argument: SMEs don't spend. Talk to any IT vendor, and you are likely to get the same response about small and medium-sized enterprises (SMEs) in the country. But no one is to blame for the SMEs' cautious stance. After all, the dotcom bust at the beginning of this decade is still a favourite excuse for them to question the viability of IT in their business environment.
But times are changing. Email has become a ubiquitous tool for communicating with almost anyone, besides the convenient mobile phones. If cost is a major consideration, then the email wins hands down. But why are SMEs still not prepared to spend, or at least spend a little more than they used to, on IT?
The nature of SMEs
Sean Ong, director for commercial business, Cisco Systems Malaysia, was uneasy about the use of the term "SME" as the definition could mean very different things in Malaysia, compared to the United States. He clarified that there should be a distinction between the very small mom-and-pop shops and the larger enterprises with a staff strength of hundreds.
"From Cisco's own research, we found that for SMBs (small and medium-sized businesses) or SMEs, and the larger enterprises which we like to call mid-market segment, their 'pain-points' are similar but not in intensity," said Ong. "SMBs are more concerned about controlling costs first, then customer responsiveness, securing business assets, operational efficiency and competitive pressure — in that descending order. The mid-market lists costs as their Number 1 concern, followed by competitive pressure, business assets, operational efficiency and investment protection."
That difference is understandable, considering that larger businesses with established networks and branches will be more sensitive towards market competition, compared to small businesses that may be doing very well in their own niches. And now that with regional competition heating up due to globalisation, the bigger players will have to contend with offshore competition as well when the local market becomes increasingly open to world trade.
But despite the different pain-points, Ong pointed out that the SMB and mid-market segments are generally looking at solutions that they can afford. "They want solutions that are simple to deploy, as they generally lack a separate, dedicated IT department to help implement such solutions," Ong said. "It has also to be easy to manage and migrate — if they already know what to upgrade – and address the pain-points mentioned."
|Sean Ong of Cisco Systems.|
Kevin Chin, sales d