Software customization is no longer the exclusive province of the enterprise.
An estimated 61 percent of SMEs in Australia do some form of software customization, according to a recent IDC study of the local small enterprise market.
The study, Australian SME Software Adoption, covers SME software application usage, the channels used to purchase software and future intentions for its acquisition.
IDC SME analyst Brad Hill said customization can be simple, like creating some macros, or more complex like a new interface or procedures in a program.
“These customizations will be [done in order to] make using the software easier and the user more efficient,” Hill said.
“Whether a company does these customizations internally or externally would really depend on the skills of those undertaking the work and the complexity of the required outcome, as well as the cost and time involved.
“The larger SMEs typically had third parties doing this customization, most likely due to the cost and difficulty associated with it.”
An increase in software adoption among SMEs was also identified with 33 percent of SMEs spending more than $10,000, 18 percent spending between $2000 and $5000 while 12 percent purchased nosoftware at all. In most cases the amount spent was relative to the size of the business.
But why the increase in the software adoption rate?
“Hardware replacement cycles are one aspect, but another is that those businesses are looking for a competitive advantage, as well as looking to drive their dollar further and become more efficient and productive,” Hill said.
“Businesses that are looking to gain more revenue online need to upgrade their back-end systems, and there is the continued threat of viruses and intrusion, so software security is becoming more important as well.”
The increase in adoption rate is attracting vendors which vigorously target the SME market, but Hill said only vendors with a good strategy that fits this sector will be victorious.
“Channel partners are so important in getting the products to the end users, and the way the products are designed for the SMEs will also impact on their success,” Hill said.
“However, scaling a product down to reach this market is not the ideal way to try to win customer share; creating a product for the SME market with the option to scale up is a better approach.”
The IDC study also found that many SME purchasing decisions are based on recommendations from friends or colleagues and the Internet.
“SMEs need to feel comfortable and need to justify their investments. If an SME manager is considering changing or adopting new technologies, he or she needs to know that it will work and do what it is supposed to do,” Hill said.
“Recommendations from friends or colleagues carry a fair amount of weight as those making the decision would obviously have more respect" for the opion of someone they know. Friends and colleagues are more likely to understand SME business priorities, pain points and how various technologies can help them out," he said.
“The Internet is a great source of information for businesses and can provide them with reviews or case studies of similar implementations."
The study also found that speciality software outlets and value-added resellers (VAR) are the preferred purchasing choice for SMEs.
“When new hardware is purchased it may need new software, or the hardware may need to be upgraded to run the new software so a VAR can be a simple option to get all that is needed at the one time, a one-stop-shop,” Hill said.
“Whereas if only software is needed, it would be a fairly reasonable choice to go to a specialty store as it will be likely to have what the business requires and be able to help them support it or overcome any difficulties encountered.