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Canadian small and medium scale businesses (SMBs) can serve as a massive and lucrative customer base for information and communication technology (ICT) products. But vendors need to position their offerings effectively before reaping profits, according to a recent survey by research firm IDC Canada Ltd. in Toronto.
The study titled 'Does ICT matter to SMBs in Canada' was commissioned by the Information Technology Association of Canada (ITAC), a network of technology companies dedicated to "[realizing] ICT potential for Canada."
More than 82 per cent of Canadian SMBs polled believe ICT products are critical to their success. On the other hand, around 79 per cent believe improving productivity and efficiency take priority over technology investment.
This apparent paradox, between how SMBs view technology and their investment decisions, poses a challenge to the ICT industry, according to Doug Cooper, ITAC chair and country manager at Intel Canada.
Other survey findings also provide insights into how Canadian SMBs view ICT.
On the one hand ICT spending by these businesses remains strong. The survey indicated that collectively, SMBs here are poised to spend roughly $16.5 billion on IT hardware, software and services this year.
Yet 50 per cent of the companies polled identified "lack of trained staff" as the most significant barrier to ICT investment. Cost and difficulty in seeing quantifiable ICT benefits and return of investment (ROI) ranked as a second hurdle at 49 per cent.
SMBs are seen as a major revenue potential by ITAC since SMBs account for 95 per cent of companies in the country and provide more than 80 per cent of the jobs in Canada, said David MacDonald, president and CEO of online commerce company Softchoice Corp. and vice-chair of ITAC.
The survey however, shows more than half of SMBs spend only one to four per cent of the revenue on ICT.
Michael Hyjek, research director for customer segments at IDC Canada said 77 per cent of senior business managers agreed their ICT investments would significantly improve productivity over the next five years. In fact, more than 65 per cent said previous ICT investments produced expected ROI.
But again the survey indicates a glaring discrepancy between perception and actual capital allocation.
"Majority of the executives hold a positive view about the value of ICT, but roughly 20 per cent of the companies do not even have an ICT employee," said Hyjek, who co-authored the study with fellow IDC Canada analyst Jamie Sharp.