While GDP figures show 0.3% growth over the last quarter, some business sectors are performing against the odds and experiencing exceptional growth. Barclays Online Business Outlook 2013 released this week has revealed that companies that operate online are thriving, with half of those questioned having produced double digit growth in the last three years. The average online company surveyed experienced 11.4% compound annual growth over the last three years, that’s over 50 times the rate of the economy over the same period.
Sean Duffy, managing director and head of technology, media and telecoms at Barclays, commented: “Online businesses have bucked the trend over the last three years and experienced success in spite of the stagnant economic conditions. While today’s GDP figures show some growth in the economy, these businesses are optimistic about what the year ahead holds and we think they are in a strong position to sustain the growth they have experienced over the last few years, providing they can take advantage of new and rising trends.”
Almost 80 per cent of companies believe that technology plays an essential part in their plans for growth, helping businesses to up their game and reach larger audiences, according to a new study commissioned by TalkTalk Business based on research by the Institute of Chartered Accountants in England and Wales (ICAEW).
The report’s author, Richard Cree, editor of ICAEW magazine economia said “There is no doubt that the application of technology is increasingly important to all businesses, regardless of sector and irrespective of their ambitions for growth. However, when it comes to how technology affects growth, respondents were clear that its key role was to deliver value by driving efficiencies and savings.”
The Geared for Growth report, which looks into the ambitions of UK businesses, also revealed that almost two thirds of respondents expected some business growth in the year ahead despite the economy, with one in 10 business owners setting this as their number one goal. Within this last group, classified by the report as ‘Thrivers’, healthcare, business and financial services and the media were most prevalent.
The majority (52 per cent) of UK businesses, classified in the report as ‘Strivers’, claimed to have modest growth ambitions. ‘Despondents’, which made up just five per cent of businesses surveyed, believed their business would downsize in the near future.
The Geared for Growth Report found that the top 10 per cent most ambitious companies were twice as likely to recognise the role technology has to play in bringing about growth, than those happy to stay a similar size. They were also least likely to think that luck played a part in their success.
Managing director of TalkTalk Business, Charles Bligh, commented: “Technology plays a pivotal role, with 80 per cent of respondents saying it was important or very important to help drive value through efficiencies and savings. British SMEs are clear that they need access to affordable technology to help control costs. The two thirds of SMES that are still ‘offline’ need to urgently consider the huge opportunities they could be missing, potentially valued at £18.8 billion per year.”
The report also explored key factors that impact on success such as people management and training. Almost a quarter (22 per cent) of businesses that took part said that they are affected by the skills gap and need better technical knowhow within their teams to succeed. A huge 49 per cent say that the skills held by the management team are critical to the business’ success or failure.
Commenting on the technology skills gap, Bligh added; “In a fast-moving digital economy, the companies most likely to succeed and grow are those with technically-skilled staff. Business can also help themselves to move from good to great by giving greater priority to IT training where needed and realising best value from their existing teams.
“My advice to SMEs would be to seek out providers that offer simple, easy to use solutions and the right level of support. Technology suppliers have a duty to lower the skills threshold wherever we can to make it easier for small businesses to take advantage of the power of technology.”
The report, ‘Collaborate UK’, highlights the new strategies being followed in response to the downturn, revealing a significant cultural shift among the dynamic SME community and the emergence of a new breed of leaner, more focused ‘size zero’ businesses.
It found that a quarter (24 per cent) of the 700 SMEs surveyed are now more open to working with other businesses than they were before the downturn and 14 per cent now work with more partners as a result. One in eight would even team up with a competitor if there was a business benefit.
The report identifies the emergence of a new breed of “size zero” businesses – organisations that are stripping out non-core functions by embracing outsourcing, exchanging services and sharing expertise, so that they can focus on their strengths:
- Smart outsourcing - 2.8 million SMEs have embraced outsourcing, buying in a mean of five non-core business functions. Among this group, the projected mean spend on outsourcing in 2013 is £143,000 with 18 per cent planning to increase it, while the biggest spenders can be found in the East of England, where SMEs plan to spend an average (mean) £203,000
- Exchanging services - nearly half a million SMEs are engaging in a ‘bartering’ economy, by trading their services with other businesses in lieu of payment. Wales is leading the way, with 16 per cent of SMEs there saying they have contra deals in place
- Sharing expertise - over a quarter (28 per cent) work with other businesses to obtain sales leads and win new business while 22 per cent share best practice with other businesses. A huge 28 per cent of businesses in Yorkshire and Humberside would even consider working with a competitor (compared to the national average of 12 per cent)
These smarter ways of working have perhaps contributed to a feeling of cautious optimism among SMEs as they look to create over 400,000 new jobs this year, with the West Midlands showing the biggest signs of optimism and the North East the lowest.
Professor Robert Blackburn, Director, Small Business Research Centre, Kingston University, comments on the findings: “This more open, collaborative culture not only strengthens the capabilities, flexibility and efficiency of SMEs but has a wider economic benefit, stimulating more opportunities for enterprises as ‘suppliers.’”
Patrick Gallagher, CEO of CitySprint commented: “By sharing expertise, exchanging services and embracing smart outsourcing, SMEs across the country are successfully stripping non-core functions out of their businesses. This is creating a new breed of leaner, “size zero” businesses, able to focus on their core area of expertise whilst tapping into their networks for everything else, as and when they need something.”
Gallagher concluded: “Our report shows that far from feeling isolated during the economic downturn, there are real opportunities for new intra-SME contracts across the sector and country and a real sense of optimism. Through the work we do, it has been really fascinating to see businesses seize this opportunity and, in many cases, play a part in it.”
A survey of 3,630 companies by PH Media Group discovered the British public are being left on hold for an average of 33.48 seconds during calls to businesses.
The implications for profitability are grave. Previous research has shown 50 per cent of callers will hang up within 20 seconds if forced to listen to silence while on hold.
But the study revealed 34 per cent of UK businesses do, in fact, subject callers to silence. A further 26 per cent play music, while 26 per cent subject callers to beeps.
“The impact of lost calls on the UK economy could feasibly run into the millions,” said PH Media group sales and marketing director Mark Williamson.
“Callers are simply unwilling to wait on the end of the line if no effort is made to ensure they are engaged or entertained, so firms are at serious risk of losing business.
“Good call handling is often overlooked as a key sales and marketing tool but the telephone still acts as an important customer touchpoint and first impressions count. If each caller enjoys a positive experience, customer service standards will go through the roof.”
Signmakers ranked lowest in the research, leaving their callers on the line for 72.64 seconds in an average call, while plumbers are leaving their callers waiting for 52.61 seconds.
But hold time isn’t the only consideration for businesses wanting to make a good first impression on callers.
As part of the study, PH Media Group also audited each company, scoring them on a number of factors crucial to good call handling.
Elements including the time taken to answer a call, the number of tiers a caller experiences before reaching the necessary department, use of consistent voice and music, professional and personalised voicemail and out-of-hours messaging were weighted to reflect their importance.
Each firm was given a score out of 100 based on these factors and the UK average came out at just 37.
“Rather than simply focusing on reducing the time callers spend on hold, businesses should evaluate all aspects of their procedure for handling calls,” added Mark.
“Inevitably, not every call will be answered within a matter of seconds, so when callers do need to be placed on hold for any length of time, informative and entertaining audio messages can help to maintain their attention and decrease perceived waiting time.
“Brand congruent voice and music are also vital in order to present customers with a consistent image of the company, reinforcing brand values and establishing a reassuring, coherent presence.”
IT software budgets for 93 per cent of SMEs have increased or remained the same over the last five years. Despite this, more than three quarters of companies said that on average, 12 per cent of software purchases still go unused.
This is the first in a series of surveys from SolarWinds and demonstrates that while investing in IT software is seen as an important expenditure, there is work to be done to ensure that the software purchased is used effectively.
The majority of SMEs surveyed (63 per cent), have an IT manager who is principally responsible for addressing IT issues — though in over 30 per cent of organisations, the business owner or manager fulfils this role. Almost one third of respondents said that IT is not their main responsibility within their organisation, yet despite this, spend up to 30 per cent of their time managing IT issues.
Key findings include:
- 87 per cent of UK respondents said that up to half of purchased IT software is not utilised. Of this group, 28 per cent said that up to a fifth of software purchased goes unused.
- While budgets increased or remain the same in most industry sectors, companies in financial services and manufacturing were more likely to have reduced IT budgets the most in the last five years.
- Although IT spending is important to UK SMEs, budgets are small. One in five companies spends just £1,500 on IT software each year.
Security and uptime
- More than a quarter of those in the UK who said that IT budgets had decreased or remained the same, stated that this had a detrimental impact on IT security and uptime. This is in comparison to Germany where less than ten per cent felt that flat budgets had a negative impact on IT security and uptime.
- The majority of SMEs with fewer than 50 employees said that IT is managed by the business owner, in comparison to SMEs with greater than 50 employees where the majority had a dedicated IT manager to address IT issues.
- Of those surveyed in the UK, more than one in ten said that IT was not their main responsibility. Comparatively, almost half of those surveyed in Germany, have other responsibilities outside of IT within their organisation
- Furthermore, of those for whom IT is not their main responsibility, one third of UK respondents said that they spend an overwhelming 30 per cent of their time managing IT issues
“The fact that three quarters of respondents said that a percentage of their IT software is going unused is not surprising to me given that so many vendors are putting out expensive, difficult to install, and hard to use software,” said Sanjay Castelino, VP and market leader, SolarWinds. “Our mission at SolarWinds has always been to eliminate the complexity found in traditional enterprise software, making it easy to find, buy, deploy and maintain from the day it’s downloaded.”