The internet as a lifeline for AEC SMEs

(This is a slightly updated version of a post from my pwcom2.0 blog that discusses potential use of Software-as-a-Service (SaaS), among other tactics, for managing the impact of the recession upon SMEs in the AEC sector.)

Given that most of the businesses active in the architecture, engineering and construction (AEC) sectors are small or medium-sized enterprises (SMEs or SMBs), any research that looks at the impact of the recession upon SMEs’ use of the internet was going to attract my attention – particularly as it is something that I have written about several times recently.

easynet-coverUK ISP Easynet Connect commissioned OpinionMatters to undertake a study of 255 UK SMEs (see also this Econsultancy blog post) to “see where SMEs could make better use of the technology available to help them to reduce costs, enter new mar

kets, and ultimately, lead the UK out of the recession altogether”.

The study report (registration required to download PDF) identifies four main areas:

  1. The internet as the ‘critical difference’ – 65% of the survey respondents (all in businesses employing between 10 and 250 people) believed the internet was either an important, or the most important tool for helping them through the recession. This confidence, however, needs to be reinforced by clear strategies to convert opportunities into benefits.
  2. The internet as a dual marketing and cost-cutting tool – The Easynet Connect sample split roughly in two. Some planned on using the internet to drive new revenues and market share (42%); others see the internet as a means to cut overall business costs (43%). Most SMEs planned to take a mixed approach combining productivity and cost-saving measures (such as adoption of Software-as-a-Service and increased outsourcing – see my posts here and here) alongside promotional and revenue-generating tactics (such as e-marketing and search engine optimisation).
  3. Using the internet to cut core costs – Among the SMEs surveyed, the most popular options were using the internet to deploy remote working (77%), using video conferencing to cut down on business travel (53%) and using Voice over IP (VoIP) to reduce telephone costs (33%). Using cost-effective online software solutions, such as Google Apps, was also increasingly favoured – again, something I have advocated.
  4. The devaluation of IT hardware in favour of internet services – Few businesses (only 8%) would consider decreasing the quality of their internet connection; most (61%) favoured cutting back or freezing hardware expenditure, a third would decrease IT support and 28% would cut down on software licences – though SaaS rarely featured as an option, perhaps reflecting a lack of awareness by SMEs of the technology and the benefits it can offer them. Easynet Connect’s survey suggests “SaaS could be a real lifeline to SMEs, and a key differentiator between this recession and the last”.

Top Tips

The Easynet Connect research report goes on to suggest five ‘top tips’ for SMEs:

  1. Encourage home/flexi working – “The workplace building is often an SME’s largest monthly expense after salaries, so why not cut it down or eliminate it completely by working from home or an alternative or remote site?” This is, again, something that I have discussed before as a way to cut energy use, as well as making better use of office space.
  2. Embrace SaaS/cloud computing – Services delivered over the web means lower hardware costs, lower software costs, and reduced need for expensive IT support. In the AEC sector, of course, this model is already extensively used to provide construction collaboration solutions to help project teams share documents and drawings and manage workflows, and can also be readily applied to an increasing number of back-office software requirements.
  3. Fully utilise e-commerce – Some AEC businesses, particularly those involved with supplying products and materials, have already embraced e-commerce, but there must be scope for other AEC businesses to offer either existing or new services over the web.
  4. Online marketing – Easynet Connect highlights the value of a good website, and of online marketing tools that can help to manage mailshots or provide statistics on website visitors. However, this ‘top tip’ isn’t really expanded enough. SMEs should, in my view, also be looking at social media: Web 2.0 tools such as blogs and Twitter offer a way for AEC firms to augment their conventional online PR and marketing techniques like websites and email, to establish and maintain stronger relationships with customers, distributors, partners, etc, and get “word of mouse” online recommendations. Wikis, extranets and online communities can be used to capture employees and supply chain members’ knowledge and expertise, while social networking sites such as LinkedIn can be an invaluable source of business leads.
  5. Teleconferencing –  Teleconferencing tools such as WebEx, Glance and LiveMeeting can help cut travel costs, while VoIP tools such as Skype (something I use extensively for international calls to software vendors, but also for multi-party conference calls to my fellow collaborators currently helping organise Be2camp North – Liverpool, 15 May) can eliminate some landline call charges.

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    • Kalyan on 18 April 2009 at 6:07 pm

    We sell SaaS apps to AEC in India and in our experience, SMEs express some reluctance to SaaS because of the fear of losing control over data. Pricing also becomes an issue. A lump sum paid they feel is more controlled than paying on an ongoing basis. I wonder if our experiences are typical

  1. Ten years ago, many potential customers of the UK AEC SaaS market had the same reluctance, so vendors had to work hard to educate them about the pros and cons of online systems (in many cases, customers soon realised that professionally-managed SaaS was far more secure and reliable than trying to host applications in-house).
    In my view, the lump-sum argument is wrong, particularly in early stage marketing of SaaS. Surely, most firms would prefer not to commit to a long-term relationship – which is what an upfront lump sum entails – until they are sure about the suitability, reliability and security of the service they are getting. Also, the subscription payment may be more easily signed-off as it may be below corporate spending limits (it could, for instance, come from operational rather than capital expenditure budgets), the payments are regular and predictable and the service can be switched off if necessary at the end of project delivery (why pay for something you no longer need?).

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