Investing in technology often worries small businesses because of how quickly it can be superceded. But software providers have come up with a solution. 

Large companies are generally so convinced of the benefits of using technology to help run large parts of their operations that they need little persuading to upgrade their systems. Smaller businesses, on the other hand, are often seen to be more circumspect about such investments. Although attitudes vary depending upon such factors as the sector in which the business operates, its scale and the age and background of those running it, this caution tends to centre on concerns about the initial cost and fears that any systems acquired will quickly become outdated and will have to be replaced as the business develops.

David Forrest, chief executive of Percipient, an Oracle partner that focuses on supplying the software company's applications to small-and-medium-sized businesses, recognises the phenomenon, but says that these days the question that needs to be asked is not whether the business can actually afford the investment but whether it can afford not to invest in technology.

Smaller companies started investing in technology 10 or 15 years ago. Typically, they had a basic finance package on a Windows platform. They would have updated that a few times and would probably have added a customer relationship management (CRM) package and might even have acquired some databases. The result would have been that different parts of the organisation would have developed their technology in isolation - requiring any information that was needed in more than one part to be keyed in separately and making it difficult to obtain information relating to the whole business.

Things can reach a point where the technology is actually impeding the management of the business rather than helping. Or it could be that the technology is either overloaded or just crashes - as happened to Kerrie Keeling, the former banker who runs the project management and building trades company, A Woman's Touch (see below).

David Pinches, head of product management for the mid-market division at Sage, the software business that focuses on growing businesses, says companies typically start to think about changing their approach to computing when they reach certain points in their development, such as having several cost centres or operating several warehouses.

When deciding to upgrade, they are conscious of obtaining systems that are easy to use, speedily installed, not too expensive and capable of being expanded as they continue to grow.

It is in an effort to capitalise on this last factor that companies that have traditionally focused on the largest businesses, such as SAP and Oracle, are starting to market their offerings to smaller companies. Their argument is that hosting applications via the internet rather than having to install individual servers and the introduction of pre-configured packages is bringing "tier one" applications within the reach of smaller, more cost-conscious customers.

Sage's Pinches points out that there is no truth in the idea that one size fits all. But Forrest argues that several factors are helping to make providers such as Oracle more attractive to smaller companies than was previously the case.

In particular, they do not seem so interested in buying specialist services but will go for more widely-applicable offerings. Also, such services do not cost as much as they once did because of the introduction of the preconfigured packages and the use of partner companies to implement them is cheaper than the consultants that used to do the work.

Moreover, many of the systems can be set up with only the modules required operating from the outset. As the business grows and becomes more complex more facilities can be added without a major implementation exercise.

Certainly, if Keeling's experience is anything to go by, proprietors of growing businesses can be pleasantly surprised by how inexpensive certain aspects of upgrading technology can be. For example, she and her team leaders have PDAs that they obtained free as part of Orange's small business package. Moreover, she opted for the top-of-the-range financial controller software package because she has ambitions to expand the business from employing 20 people in the London area to a nationwide presence and felt she needed something more robust. "It's much cheaper than me taking on my own IT person," she says of her decision to go for what she saw as the best.

Recovery after a crash

Kerrie Keeling realised she needed to upgrade her technology when her computer crashed, wiping out all her files. "I started back in April 2003, just me decorating. I ran the business from home with a land line and a PC and a mobile," the former banker recalls.

By offering a superior service to that usually provided in the building trade, the business - A Woman's Touch - grew quickly, with Keeling adding other trades in response to customer demand. However, she kept doing the accounts on spreadsheets on her original PC - until the crash happened a year and half ago. That problem - and the inadequate advice on dealing with it that she received from the store that supplied the PC - convinced her that she needed to upgrade her technology.

She discovered a consultancy called Solutios, which operates her website (www.awomanstouch.org.uk) and also manages all the business' communications needs. There is a networked e-mail system linking Keeling with two other people working from home and the landline telephones are also networked so that all calls between them are free.

In addition, Solutios, which provides 24-hour remote support, has organised each team leader to be equipped with PDAs that enable them to be e-mailed with job specifications. This greatly improves the level of customer service.

From the beginning of the new financial year in April, the business will also have a new accounts system which will provide the perfect platform for future growth.