First a few facts. 80% of Australian SMEs do not have an ICT strategy and most buy their technology from the retail channel on an ad-hoc basis.

Taking 1-man operations out of the equation, Australia has about 700,000 small business operators.In fact, the vast majority of  Australian companies are SMEs.  As such, much work is done in Australia by governments in support of the small business operator. On the flip-side however, 81% of the ICT market by spend is accounted for by the top 13,000 companies. It seems that the strategic thinking stops there as well. This policy initiative asks what kind of a powerful return would strategic ICT planning support at the SME level provide to the Australian economy? 

There is currently much economic research done on the use and application of ICT for productivity gains yet there is little support for educating the SME market in ways to plan, incorporate and purchase ICT within the particular requirements of their own business. Even the annual reports and studies to members from peak bodies such as the Australian Chamber of Commerce and Industry (ACCI) which represents over 350,000 companies, largely ignore the blueprint for ICT. Neither the AIIA nor ACS, nor CA nor CPA are national industry association members of ACCI whereas most other industries are represented. Instead, the value of ICT is communicated to SMEs through a steady national conference or training agenda from unrelated and removed generic training companies. But there are only so many seminars that a person working 80+ hours a week wants to, or can attend. And clearly even less time to implement solid solutions. Ultimately an ICT planning skill would prove infinitely more valuable. 

Adding to the policy drive is that many of Australia's SME clients are in fact much larger and more technically mature than themselves. Many of their clients even reside in overseas markets. This provides an early indicator to the dangers of a widening technology service gap in Australia that must be plugged. Therefore if SMEs are to continue to serve their client base, then they will need to compete more effectivley with the technology systems of more mature, technically supported competitors. Given the changes in the technology market in the past few years, access to equivalent enteprise technolgies is no longer an issue. Like applying taxation legislation, learning how to apply it remains the challenge.  

The knock-on benefits for a more technically saavy SME is an ability to focus more on the core business of service delivery, and in turn drive growth in other SMEs which feed from the same service economy thereby enabling a compounding effect in the market. In the very least, an SME that gives consideration to improving how they currently plan and spend on technology will ultimately be able to do more with the same or less and be better positioned to ride economic uncertainty.

SMEs are also used to taking advice; from financial advisers, CPAs and lawyers. Therefore how they should receive that assistance for technology is a comfortable match for their business models.  Policy that recognised technology advisors in this regard would be great.  The business advisors currently provided to SMEs by government are essentially technology dabblers not technology planners. The same government programs that would endorse an SME to go and seek a lawyer or a CPA for specialist skills probably currently retain an inhouse service for technology.

Furthermore, the entrenched grants schemes and business advisor funding approaches of government are fighting hard to break free from the albatrosses of innovation, such as Queensland's IIB which has relaxed its strategic focus on innovation in support of "productivity". This supports the challenge for new SME-supported ICT policy which posits that the benefits of a tech-savvy SME market are not necessarily the two great bastions of government ICT policy: commercialisation and innovation. The greatest benefit to the wider economy is simply better business as usual practices which may result in an improved bottom line i.e. profit not top-line revenue. Better management will be a precursor to and trump innovation every time.

Other existing impediments include the federal government's investment allowance tax break on technology which ignores services and encourages retail spending. It is fundamentally the wrong long-term stimulus for a services economy and assumes that all services in the technology sector need to have a hardware component. Its effect simply reinforces the negative cycle outlined in the first sentence of this blog: no planning and ad-hoc retail spending and may in fact consign the Australian SME to a permanent competitive disadvantage through encouraging the purchase of cheap technology as the answer to more fundamental business problems.