General
29 Apr 2013

SMEs embrace mobile and cloud-based computing

Smaller firms are turning to third-party ‘cloud-based’ providers to run ‘back office’ services like invoicing, business planning and customer relationship management.

The Quarterly Survey of Small Business in Britain* produced by The Open University Business School (www.open.ac.uk/quarterly-survey), examined the use of mobile and web-based services and found that more than 21% of respondents are now using ‘cloud-based’ providers to run their back office services, compared with two years ago when just 8% of respondents reported using them.

SMEs are also showing the way by embracing mobile internet technologies but security, privacy and technology are still major challenges in moving a higher proportion of business activity online.

The report, sponsored by Barclays Bank and ACCA (Association of Chartered Certified Accountants) found that the most popular business activities conducted via static internet are ‘general communication’ with existing customers and suppliers (85%) and checking bank account balances (85%). It also showed the highest reported usage of mobile internet technologies is among relatively small firms (in the £100,000 to £250,000 band).

Other Special Topic findings include:

• More than half of respondents (56%) only use personal computers or laptops with static internet access, while a very small minority (2%) only use smartphones or tablet computers with mobile internet access. This leaves just over a third of firms (36%) able to use the internet in both its static and mobile forms.
• The business services sector, which includes firms such as accountants and management consultants, has the highest reported levels of usage of static internet (96%) and is also amongst the highest (44%) for mobile internet.
• More than a third of respondents with mobile internet access (39%) are using it to check business bank account balances.

Dr Richard Blundel, of The Open University Business School, said:

“These new communications technologies are enabling SME owners and managers to make radical changes to the way they do business. “One of the most striking findings in our report is that the smallest firms are often among the most innovative in this arena, particularly in their willingness to adopt mobile internet and cloud computing.”

He added: “Our research also highlights some fairly major obstacles, most notably privacy and security concerns, that service providers will need to overcome before firms in the UK are going to feel confident enough to move a much larger proportion of their business activity onto these new mobile and web-based platforms.”

Sue Hayes, Managing Director of Barclays Business Banking said: “The research and our experience show us that the way businesses interact with their bank is evolving. Improvements in technology will enable small firms to spend less time worrying about their finances and more time focused on their business.

“Innovations like Mobile Banking and faster payments are not replacements but additions to a typical business’s resources, designed to make it easier for them to access information about their finances. The rapid rate of take-up shows how many are seizing these opportunities,” she said.

Commenting on the report findings, Manos Schizas, Senior Economic Analyst at ACCA said: "Entrepreneurs need to keep in mind what level of responsiveness and inter-operability their clients expect. The Open University findings suggest that larger businesses, as well as those in B2B sectors, take such technologies for granted."

Meanwhile the responses to the regular questions in the Quarterly Survey of Small Business in Britain showed there are some signs of optimism in the UK economy.

Stronger sales in manufacturing and hotel and restaurant sectors and improved employment performance were reported, while SMEs in construction, manufacturing, health, education, leisure and retailing were more upbeat about future sales.

SMEs anticipate a stronger overall improvement in sales performance in the first quarter of 2013, as compared to a more stable picture over the previous two quarters, while firms in London, the North East of England, the East Midlands and Yorkshire and the Humber were the most optimistic about sales in the first quarter.

However the state of the economy and the associated negative impact on demand remained by far the most commonly reported problem for SMEs, irrespective of size or sector, ahead of cash flow, payment and debtors. Government regulations retains its third place overall.
Retail firms report negative sales and employment balances while agriculture, forestry and fisheries saw the weakest sales performance.

Construction performed worst in employment terms and two thirds of SMEs reported no overall change in the number of people they employ.

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