IT failing one in four small businesses, survey says 22 July, 2009 By Liam Lahey

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According to the international "IT Effectiveness Index (ITEI) Mid-Year Report 2009", another 37 percent of small businesses are barely maintaining their IT operations, scoring only a 'C' grade. The report, based on surveying hundreds of small businesses, further reveals that these companies are falling further behind as economic pressures have forced nearly half of the respondents to reduce, delay or cancel critical IT investments.

The ITEI program offers a free online benchmarking tool for small businesses to audit their IT effectiveness, and explore best practices and affordable options and alternatives for improving or maintaining effective IT standards. In addition, the ITEI will begin providing survey participants with free peer comparisons based on company size and industry.

"The results to date indicate that many small businesses are falling behind when it comes to implementing accepted best practices for IT operations and management," according to Steven Kahan of The Planet, one of a consortium of sponsors behind ITEI.

The results so far are especially disturbing, according to Kahan, since more than two-thirds of the small businesses responding to the survey indicated that IT and Web commerce are the foundations that enable their business success.

"The IT Effectiveness Index is telling us that in nearly two-thirds of businesses with 100 employees or less, IT operations are failing to fully support or keep pace with small business needs," he added.

Carl Meadows, senior manager, product management, The Planet, told eChannelLine a lot of small businesses think they have to face their IT challenges alone.

"We set out on this project about six months ago to try to provide a framework to better understand what's going on in the marketplace and provide a tool for SMBs to build a framework for how they're looking at IT and where the gaps are," he said. "We thought we'd see more B's and C's than D's and F's.

"There are lots of ways to skin a cat and for a small business, you have to go outside to outsource service providers to accomplish the objectives that are critical to your specific IT needs."

Survey results also show that nearly half the businesses are facing obstacles in implementing new IT projects because of cuts in capital investments, and nearly one-third lack the staff to properly manage their IT investments.

The sponsors of the report also provide suggestions for small businesses to help them upgrade their IT performance and effectiveness without the capital expense typically associated with IT budgets. Among the suggestions are for small businesses to concentrate on core competencies while seeking to explore outsourcing options, take advantage of free software and other offerings, explore the benefits of cloud computing whereby applications are utilized and maintained on a subscription basis, and consider IT infrastructure alternatives to capital expenditures through hosted hardware, software and services.

The online survey offers business owners and IT executives a free online benchmarking tool that uses a methods-based framework. Participants take a 12-question, 10-minute survey to receive an immediate and confidential score, accompanied by a detailed report with consultative suggestions about how to improve their IT processes. In January 2010, the ITEI Partners will publish the "SMB IT Effectiveness Index Annual Report", which will be provided free-of-charge to survey participants, officials said.

The free online survey and tool is available at www.iteffectivenessindex.com.

In other Planet news, the IT hosting provider announced it had signed onto Microsoft's BizSpark Program. In doing so, The Planet said it will now provide free Microsoft software to early-stage startups.

A gold-certified Microsoft partner, The Planet offers the program (www.theplanet.com/BizSpark) to qualified companies through its status as an official Network Partner and Hosting Provider, helping ISVs get off the ground with software-as-a-service offerings.

"We're excited about the BizSpark program," Meadows added. "By providing support via training and access to free development tools and free Microsoft software . . . to give those businesses a chance to flourish, that's something we're happy to be apart of."