IT Failing One in Four Small Businesses

Initial results from a new online survey designed to measure IT effectiveness at small businesses shows almostone in four respondents score a ?D? or ?F? grade.

According to the 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 free online survey and tool can be found at

?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 emphasized.

In many cases, he explains, the symptoms of mediocre or failing IT grades are displayed in a lack of security protection against cyber threats, an inability to prepare for or respond to incidents, as well as growing concerns about IT availability and unacceptable levels in downtime of IT systems.
?The take away from all of this,? according to Anita Campbell, principal of Small Business Trends (, ?is that small businesses are finding themselves at a competitive disadvantage.

During the recession, some have had to make do with less staff, cancel or put IT projects on hold, and slash capital expenditures in their IT budgets. The benchmarking and self-audit tool helps small businesses understand where they have fallen behind so they can work on the building blocks for better technology effectiveness, leading to greater overall success in their businesses.?

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 IT Effectiveness Index offers those who take the survey a chance to examine their results in more detail through a personalized report that is provided immediately after taking the survey. The survey will soon enable respondents to compare their scores against peers in terms of size and respective industries. The sponsors of the Mid-Year 2009 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 IT Effectiveness Index represents the first industry coalition to measure the IT effectiveness of small- and medium-size businesses around the world. 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.

During the year, ITEI Partners will issue periodic news as research trends emerge. To participate in the survey or learn more about the participating partners, visit the ITEI Web site at

What can small businesses do to more effectively use technology as a tool
Purchase wisely: Do not purchase technology that you really don’t need or that will not directly affect your bottom line

Have a technology plan: Think where you are and where you want to be, in the short and long terms. Plan for technology investments

Local technology adviser: You should have a local technology adviser who can guide you into how to get the most out of technology.

Training: Many times technology “fails” because those using it simply do not know how to properly use it. Think about the copy machine that “does not work”. Maybe it works but no one knows how to properly use it.

Ramon Ray is the editor and tech evangelist of the