SMBs expect technology budgets to shrink in 2013

Quocirca report reveals smaller firms would rather pay cash upfront for IT purchases rather than consider financing

More than 64 per cent of SMBs questioned for a survey are expecting technology budgets to decrease in 2013, with a further 21 per cent expecting them to stay level.

The figures are part of a joint survey by Quocirca and BNP Paribas Leasing to gauge the IT spending habits of UK SMBs. The survey questioned senior-level staff from more than 100 firms with revenue between £5m and £50m.

Interestingly, 41 per cent of respondents said they use VARs as their main channel for buying ICT hardware and software, but 81 per cent use the internet as their primary or secondary means of procurement.

And more than half of respondents consider the upfront costs of IT purchases to be of critical or high concern in their procurement process.

When asked about financing, 76 per cent of respondents admitted to using car financing, but just 30 per cent said they using it for IT telephony equipment. A meagre one per cent use financing for software, with 40 per cent admitting to never having considered software financing.

The results revealed that more than 50 per cent of respondents were unaware of the benefits of IT finance in comparison to a cash purchase or bank credit line, while just under 40 per cent believe financing is unnecessary as they "have enough cash already".

And because vendors hardly mention financing as an option, BNP Paribas claimed resellers have an opportunity to be more proactive about the method with SMBs.

Benoit Dilly, country manager at BNP Paribas Leasing Solutions, said financing was an ideal value-add opportunity for resellers.

“Now is a great time for SMBs to procure ICT through financing. With budgets increasingly restricted, it is the ideal way for them to get the technology they need to achieve their goals and go for growth,” he said.