SOURCE: Small Business Technology Institute

April 12, 2005 16:03 ET

Integrated Systems and Processes a Top Priority for Small Businesses, According to SBTI Study

Research Reveals Surge in Awareness and Potential for Adoption of Business Management Applications as Small Businesses Focus on Growth, Competitive Advantage

SAN JOSE, CA -- (MARKET WIRE) -- April 12, 2005 -- Integrated business systems and automated processes are no longer the exclusive domain of large companies, according to a report by the Small Business Technology Institute (SBTI), a non-profit organization that fosters technology education and adoption among small businesses. Based on a 2004 study sponsored by SAP AG to understand information technology (IT) adoption trends, SBTI confirmed that small companies in the United States are embracing new approaches to integrate and automate their core business processes and systems.

According to the report, titled "The Future of Integrated Business Management Applications in the Small Business Market" (http://www.sbtechnologyinstitute.org/mi/research.htm), integrated Business Management Applications interact with the critical functions of the business, providing managers with the key benefit of accessing comprehensive, consistent and timely information across their entire operation. This results in actionable insights into marketing effectiveness, operational efficiency and financial performance.

"To compete and grow in the global economy, small businesses need to make informed decisions based on a timely and integrated picture of what's happening throughout the company, and until now, these capabilities were out of reach," said Andrea Peiro, CEO and practice director of Market Intelligence for the Small Business Technology Institute. "Business Management Applications represent a radical shift in the way small businesses integrate disconnected systems, automate manual processes and improve business performance. These solutions are the key to enabling small business managers to evolve to an analytical, data-driven management style, where decisions are based on an accurate view of present and future needs, opportunities and capabilities of the business."

Technology Adoption Trends Suggest Bright Future for Business Management Applications

--  Demand is growing rapidly for technology tools to help small
    businesses acquire, store and analyze data from all their functions.  The
    trend to integrate technology tools across multiple business functions is
    evident with 27 percent of small businesses in the U.S. making efforts to
    bring together their financial, marketing and operational systems. The
    study also confirmed only 7 percent of small businesses have currently
    deployed fully integrated business management applications such as small-
    scale Enterprise Resource Planning (ERP), indicating a great opportunity
    for the development of integrated business management applications tailored
    for this market.
    
--  Small businesses have good data infrastructures, but rarely use them
    to share knowledge.  Local Area Networks (LANs) (78 percent) and broadband
    Internet access (82 percent) are pervasive, but only a fraction of small
    businesses use networked applications to acquire and analyze data from
    multiple functions of the business or to communicate and collaborate with
    supply chain partners.
    
--  Small businesses find substantial value in the use of Business
    Management Applications.  About 50 percent of small businesses have found
    substantial competitive advantage in the uses of these types of software
    applications, even if as many as 40 percent feel today's solutions do not
    fully meet their requirements.
    
--  Cost is the leading driver of Business Management software purchasing
    decisions among small businesses.  Survey respondents underscored that cost
    is the primary decision factor in the acquisition of technology tools,
    followed by ease of implementation and use. This is evidence of an
    extremely pragmatic and business-driven approach to technology choices.
    
--  Small business owners, CEOs and presidents are the decision makers for
    technology choices in their companies. Knowledge and product fit are the
    most critical factors in driving successful technology adoption.
    Principals are most often the decision makers and they tend to rely heavily
    upon their personal knowledge and traditional media sources (89 percent),
    but also place growing importance on alternative resources, such as the
    opinion of their peers (85 percent), other users (47 percent), value added
    resellers (16 percent) and consultants (37 percent).
    
About the Report

This 2004 study employs the Small Business Technology Institute's Technology Adoption Index, a sophisticated model that assesses the position of small businesses in the technology adoption lifecycle. Qualified survey respondents were 1,083 small businesses in the United States with 1-300 employees and less than $100M annual revenues. The report was sponsored by SAP, the world's leading provider of business software solutions, as part of its efforts to advance the study and understanding of small and midsize business market trends.

Download a complimentary copy of the report and learn more about market intelligence from the Small Business Technology Institute at http://www.sbtechnologyinstitute.org.

About the Small Business Technology Institute

The Small Business Technology Institute (SBTI) is a non-profit, public benefit corporation that fosters the adoption of information technology among small businesses. SBTI provides information technology awareness, education, consulting, and support services to businesses with 1 to 300 employees, with a focus on disadvantaged categories. SBTI also provides technology developers and vendors with market intelligence and knowledge to ensure the development of products that meet the needs of small businesses. For more information, visit http://www.sbtechnologyinstitute.org or call (408) 494-0212.

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