Canada’s small and medium sized businesses are helping to fuel the growth of wireless networking, and many plan to increase their IT spending in the next year, says a recent report.

The Canadian SMB Study 2002, by Evans Research Corp., indicates that 36 per cent of respondents plan to increase

their IT spending in the next 12 months. The report’s author, Ivar Kangur, says cost reduction emerged as the biggest challenge for SMBs.

“”It was rated as important by 80 per cent, and that’s something vendors need to keep in mind when they’re offering solutions to their customers,”” says Kangur.

The report also revealed substantial growth in the wireless space, with one in five SMBs now networking wirelessly. Many smaller SMBs, more agile then larger firms, tend to be early adopters.

“”Among the larger companies you have greater issues with security and reliability, and because of that IT managers still prefer hard-wired networks,”” says Kangur. “”But with the smaller Mom and Pop shops, where those issues don’t really come up as much, wireless is certainly a cost effective way to go, and that’s being borne out in the numbers.””

When selecting a supplier, SMBs look for good product knowledge and strong support, and once they pick a supplier they stay loyal. Half of the respondents have been dealing with one IT supplier since last year, and 41 per cent of them for over five years.

Most IT spending is going to computer dealers, with 64 per cent buying from a dealer last year. Kangur expects the large electronics retailers will increase that figure next year, especially with Best Buy entering the Canadian market.

SMBs are advancing slowly on the e-commerce front. While every company has some sort of Web presence, the number of SMBs selling online remained static at 22 per cent.

“”We did find, however, that satisfaction with e-commerce efforts among those people with online sales nearly doubled this year,”” says Kangur.

While the tools are now readily available for SMBs to set up an e-commerce capability, Kangur says security concerns from consumers and the concentration of Canada’s population in urban areas have prevented e-commerce from really taking off.

“”Canadians have always had a reputation to be somewhat slow to jump on the e-commerce bandwagon,”” he says.

One of those companies that has benefitted from e-commerce is Vancouver’s Eclipse Awards International, a maker of award and gift products employing five people. Eclipse director Toby Barazzoul says their Web site began five years ago as a convenience for their local customers, a way to see their products until the next catalogue. Today, 70 per cent of their business is from outside Vancouver, half of that from the U.S., thanks to their Web site.

“”People outside Vancouver started to find it, sales started to come from it, and it really changed the focus of our company and the potential we had,”” says Barazzoul. “”We’re no longer really a local company. We’re across North America.””

To recognize the importance of the Internet to the company’s business, and the use of technology within the office, Eclipse decided to bring the Web and IT expertise in-house, rather than rely on contractors, as do many SMBs.

“”We were able to find a Web designer with good IT skills so we could kill two birds with one stone,”” says Barazzoul.

“”Because we’re so reliant on technology now for our day-to-day operations, it was important to have someone here who could deal with issues as soon as they come up.””

Using in-house expertise

Creative Wonders, a small North Vancouver, B.C.-based public relations firm, has also hired a dedicated IT staffer. Project manager Pilar Monaco says when Creative decided to offer Web site services to its clients as a complement to its communications and marketing offerings, it became necessary to bring the expertise in-house.

A large part of Monaco’s time has been also spent creating efficiencies within Creative, including converting the company’s cost control system from written form to an electronic system. However, Creative still relies on outside consultants from time to time.

“”We have a supplier who helps us with networking and computer hardware/software issues, and we have a contractor I sometimes consult on some issues as well as necessary,”” says Monaco.

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