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May 1, 2007

As SMBs Evolve, Vendors and VARs Face New Challenges

1 May, 2007
By Laurie Shufeldt, Vice President of Strategic Business Development, FileVision

New IT Sales Opportunities in SMB Market
As 10 percent of small businesses close their doors annually, an equal percentage of new small and medium-sized businesses (SMBs) open; providing technology providers the opportunity to service a market of 2 million new start-up companies a year, who spend an all-time high average of $7,000 per user on new IT investments. Servicing SMBs' technology needs, as they open their doors for business, creates the opportunity for a long-term business relationship and recurring revenue for channel partners.

Ray Boggs, vice president for small/medium business and home office research at IDC, sees a growth opportunity throughout 2007 for providers of advanced technology in the SMB market. To gain a foothold in this market, vendors and VARs need to be savvy to the following needs of SMBs:

Productivity - SMBs need technology to streamline business processes and maximize employee time.
Communication - With immediate access to information, customers, and suppliers, SMBs can respond accurately and promptly.
Management - Technology that provides current and immediate up-to-date information gives managers the ability to make quick and informed decisions.

Andrea Peiro, CEO of the Small Business Technology Institute, sees several technologies as hot products for the SMB market during 2007, including digital security and spam filtering, company-wide VoIP, and smartphones with data, email and web integration. However, these products need to be integrated into existing systems and business processes to effectively help SMBs reach their goals.

SMB Technology Needs Have Evolved
To determine the technology requirements for SMBs, vendors and resellers need to understand the challenges this market faces. SMBs are evolving fast. They're revolutionizing the way they do business under the pressures of competing with bigger companies with bigger technology budgets. They don't need individual products that perpetuate the separate silos of information, under which SMBs find their productivity buried. What they need is an overall solution that streamlines management of information with their established work processes, to improve efficiencies and productivity without sacrificing the quality of their work performance.

The needs of SMBs have also gone beyond the use of separate software functions. To compete with enterprises and differentiate from like-sized competitors, SMBs need comprehensive technology. Applications must reach beyond simple accounting functions and office management, to encompass everything from compliance issues to disaster recovery. Comprehensive solutions should assist SMBs with the highest priorities they face in today's market:

Improving productivity and increasing ROI is vital for SMBs to remain competitive. Having employees perform double data entry tasks or cumbersome data searches because departments do not have access to records from other business functions, impedes productivity and negatively impacts ROI. Integrated software would improve efficiency and communication.
Compliance with regulatory requirements is an ongoing challenge for SMBs. Many companies are not compliant with HIPAA and Sarbanes-Oxley federal regulations. Other federal, state, local and industry regulations create additional compliance needs. Records-retention technology can help SMBs meet regulatory demands, and also improve efficiency within the organization.
Efficient customer relationship management features can keep SMBs ahead of competitors. Today's customers won't wait for answers. They'll go elsewhere if they can't get immediate response from a company. SMBs need data management technology to be efficient and integrated among all departments within an organization. Search and storage functions must allow for easy customer inquiry, along with up-to-date and comprehensive information for management decision-making.
Security, business continuity and disaster recovery are other concerns that SMBs need to integrate with their technology system. The risk of losing data not only results in lost business and profits but also could put a company in noncompliance with regulatory agencies. IDC analysts predict that in 2007, the SMB technology market will increase in areas of local networking spending and security and storage, as companies invest in new technology to meet these concerns.

Long Term Solutions Key to SMB Technology Market
Many SMBs have been using band-aid approaches to IT solutions. Complexity of infrastructures that have added separate software for separate functions has impeded connectivity and communication between departments within organizations. Presidents and CEOs of SMBs typically know how to run their business successfully, but not necessarily how to apply current technology to run processes at maximum efficiency.

Since SMBs typically have small or no IT departments, VARs can tap into the market with a consulting approach. By offering a comprehensive package that will cover all facets of business processes, VARs will meet current needs of SMBs and develop long-term business through maintenance, upgrades, service agreements and future consulting services. VARs need to adapt to the role of consultant and long-term provider, or partner with others, to provide services to SMBs that help tie together their major functions.

With the need to access information quickly, SMBs need customer relationship management, accounting systems and business management software to be flexible and integrated. The right solution should provide an immediate impact on ROI and not disrupt operations with substantial downtime during implementation.

If VARs can fill the consultant role and match SMB business processes to technology solutions, then a long-term relationship can help SMBs, vendors, and VARs. SMBs will stay ahead of the competition with latest technology trends, and vendors and VARs will benefit through new product sales and upgrades, service contracts and future consulting.

Laurie Shufeldt is the Vice President of Strategic Business Development at FileVision. She joined FileVision in 2001, bringing more than 14 years of information technology industry expertise. With FileVision, Laurie helps SMB customers, especially those in the healthcare, financial services and government industries, bridge the gap between digital content and paper documents, helping them to intelligently link and match documents to important data objects such as people, companies, processes and assets, resulting in improved communications, enhanced customer service and immediate access to information and relationships within the data. Laurie's professional experience includes a versatile background in consultative sales, technology analysis and implementation, customer training and market analysis with a focus on the technology system integrator channel and the enterprise market. Laurie has a bachelor's degree in economics from Georgia Southern College and an associate degree in public administration from Middle Georgia College. Laurie can be reached at lshufeldt@filevision.net. For more information about FileVision, please visit www.filevision.com.

Notes:
1 - "Churn rate and technology spending in the SB market." Andrea Peiro. Small Business Technology Magazine. October 2006.
2,4 - "IDC's Global SMB Team Presents Top 10 Predictions for 2007: Evolutionary and Revolutionary Changes Will Drive Opportunities." IDC Press Release. January 31, 2007.
3 - "2007 Hot Technologies Forecast." Andrea Peiro. Small Business Technology Magazine. Issue 16. January 31, 2007.

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