The Top 5 IT Mistakes That Australian SMBs Make

When you operate a small to medium business with little room in your budget for dedicated technology specialists, IT management can be a challenge.

SMBs – those with fewer than 200 staff – account for a whopping 99.7% of the 2 million businesses trading in Australia, according to 2009 ABS data. 60% of businesses were identified as sole traders and about 36% had fewer than 20 staff.

So if you can’t afford a full-time person to manage your website, email, social media, and customer records or inventory management systems, rest assured that you’re not alone.

We surveyed IT consultants and vendors to find the most common IT mistakes made by Australian SMBs. Here are the issues they’ve seen:

1. Working without a plan

Big businesses have chief information officers and IT managers who understand the goals of their company, develop a long-term technology strategy to support those goals, and buy products or services accordingly.

Working without a plan is dangerous because you may lose critical data on consumer-grade portable hard drives or end up with a whole lot of technology that just doesn’t play nicely together.

You can also end up with the dreaded “vendor lock-in”. If can’t get your data back from a cloud provider in a usable format, for example, you’ll have to wear every price hike or change in terms and conditions until you can afford a major change.

“Most SMBs – and indeed a lot of IT providers – take a reactive approach to IT,” says B Technologies’ Balazs Pinter. “Instead of maintaining, optimising, and improving their systems proactively, they attend to IT issues only once they have already happened.

“By then, it is too late and this means higher costs in fixing issues and unplanned downtime. Just like a car, IT systems need maintaining to operate at optimal performance and reliability.”

It sounds easy, but even the largest IT projects fall over due to planning failures.

Just look at Queensland Health’s over-time, over-budget and all-round problematic introduction of new payroll software in 2010 that has led to a whole lot of parliamentary finger pointing between the department and partner IBM.

“Some of the biggest IT failures occur because the new system’s capabilities and needs are mismatched with the company’s existing business processes and procedures,” according to Sage Business Solutions’ Mike Lorge.

“Poor selection occurs when a company hasn’t adequately developed functional requirements or when the IT project lead or team doesn’t take the time to run through the system’s screens as they would during the course of their daily work to discover if the software’s features will accommodate their needs.”

2. Having unrealistic expectations

Think carefully about what you want from each IT project, no matter how large or small, and apply the same careful consideration to any deviations.

Don’t underestimate the amount of money, time, and outside assistance you might need for each project, and don’t overinflate managers’ and users’ expectations.

A new server may give your business a whole lot more computing grunt, but the average user probably won’t notice any changes right away.

“Companies should be prepared to see an initial frustration after the new software is implemented, simply because a new system needs time to master,” Lorge notes. “As employees become more familiar with the new system, the expected improvements will result.”

3. Being unprepared for a disaster

What would happen to your business if your office is flooded with water and all IT hardware goes kaput? Would still know who your customers are, or who you need to pay?

Would you still be compliant with tax office requirements?

Small businesses may lose data to anything from natural disasters to a lost USB stick to accidentally hitting delete.

“SME’s generally fail to plan for the worst case scenario,” according to BitCloud’s Bennett Oprysa. “They get busy doing business and they never think of how to include data protection as part of their critical plan to operate.”

If you have a backup and disaster recovery strategy, don’t forget to test it every once in awhile to make sure everything’s still working.

While a 2011 Acronis survey found that about two thirds of Australian businesses backed up their data offsite, a separate Kroll Ontrack survey found that many businesses’ backup systems were “not working properly at the time of loss”.

4. Running outdated IT

You don’t have to buy the shiniest new laptop every year, but you should be keeping your software and anti-virus systems up to date.

If you’re still using Windows XP, for example, you should note that Microsoft will no longer support it as of April 2014.

Unpatched software can leave your business open to hackers. Last July, hactivist group Anonymous accessed and stole 40GB of AAPT data via an old, well-known Adobe ColdFusion vulnerability.

“Security attacks on SMB IT systems are increasing and cost tens of thousands of dollars to overcome,” Pinter says.

Similarly, old servers and PC hardware have a higher risk of failure, which could lead to frustrated staff, lost productivity and data loss.

5. Neglecting online opportunities

Bricks and mortar retailers take pride in their shop fronts. Similarly, if your website still uses frames, flashy neon banners and clip art, perhaps it’s time for a refresh.

According to Internet World Stats, there were 19.5 million internet users in Australia last year, representing 88.8% of the population. That’s a market you shouldn’t ignore.

Keep an eye on mobile and social media channels as well. It may not cost much for you to market your business on social networks, but approach with caution.

Earlier this week, Qantas had to apologise to the family of an eight-year-old boy who saw a picture of someone naked on its Facebook page. A Qantas spokesman explained at the time that the pornographic picture was spam.

On the topic of social media failures, you may recall Arizona restaurant Amy’s Baking Company, which had a very public meltdown on Facebook in May, after celebrity chef Gordon Ramsey said on Fox’s “Kitchen Nightmares” that the restaurant was beyond repair.

Barracuda Networks’ Mike Romans highlights “social media control” among a range of topics that are demanding increasing attention from Australian IT managers.

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