Are the business benefits of Internet technology worth the effort and expense that must be invested in it? Though the answer is "yes" for most SMBs, it doesn't come without caveats.
Research conducted by the UK's Cranfield School of Management shows that many SMBs enjoy a love/hate relationship with the Internet. According to a vnunet.com story about the research, six of 10 SMB respondents said the Internet has boosted their operational efficiency. The tradeoff, however, is that is has made running their companies more complex, mentioned by 46 percent of respondents.
The Internet is nearly ubiquitous among British SMBs, the research found. Ninety-four percent of respondents have broadband, 96 percent have e-mail, and 84 percent have a Web site. The results mesh with earlier studies such as an IDC survey that found the number of SMB retailers selling goods online grew from 21 percent in 2005 to 32 percent in 2007.
Among the benefits for SMBs, according to Cranfield professor Andrew Burke: enhanced innovation, more flexible working hours, improvements in negotiations with suppliers, and more ability to take advantage of outsourcing.
Respondents cited reduced direct contact with customers and business peers as a downside of the Internet. Also, many of them find sifting through online resources to be frustrating and time-consuming.
As I blogged earlier this week, both Microsoft and Yahoo see offering online services such as e-mail and Web hosting as a way to win SMB business.
Interestingly, as with many business improvements, there is an inverse relationship between the number of folks using the Internet and the competitive edge it offers. Says Burke:
The sting in the tail is that this uptake in Internet use has been so dramatic that most SMEs now share these same benefits and few can garner a competitive advantage as a result.