What SMBs Look for From Their Technology Partners

SMBs and tech partners

Job Creators

SMBs represent 99.7% of the 6 million total U.S. employer firms, and have generated 63% of net new jobs in the past 15 years, according to the Office of Advocacy of the U.S. Small Business Administration.

Strategic Priorities

58% of SMBs said reducing costs or overhead is their top strategic priority, followed by reaching new customers (55%), improving operational efficiency (48%) and improving staff productivity/capabilities (38%).

Size Matters

The survey finds that reducing costs is a top priority for 63% of micro-size companies, 58% of small companies and 52% of midsize companies. Reaching new customers is a top priority for 68% of micro-size companies, 57% of small companies and 40% of midsize companies.

Technology Drivers

Only 17% of SMBs said they are where they want to be with technology, while 47% reported they are moderately close/not close to where they want to be in tech use and 36% said they are very close to where they want to be.

Tech Issues

Top technology areas that SMBs said they need to work on include IT security (42%), effectively managing and using data (42%), modernizing aging equipment and software (39%), managing increasingly complex technology (30%) and understanding the available choices (29%).

Channels for Buying Tech Vary

Half of midsize companies buy through IT solution providers, VARs or tech consultants. In comparison, 36% of small companies and 16% of micro companies buy through the partner channel.

Outsourcing IT

More than 70% of SMBs said they used an outside IT firm at least occasionally over the past 12 months.

Partner Roles

The top reasons for working with a third-party IT firm include repair/troubleshooting (35%), installation/integration (26%), Web design/e-commerce (25%), technology procurement (23%) and cloud computing (22%).

Drivers for Third-Party Partners

Reasons SMBs said they used IT firms included gaining greater expertise in new areas (46%), being able to focus on their core businesses (33%), helping drive business with technology (32%) and reducing IT support costs (30%).

Budget Challenges

Two-thirds of SMBs spend less than $100,000 annually on technology, and 29% spend $10,000 or less. Yet two-thirds of SMBs plan to increase their tech budgets, with 30% projecting an increase of 10% or more in the next year.

Dissatisfaction With Vendors

42% of SMBs switched to new IT firms because of costs. Other reasons SMBs made a switch included previous vendors’ lack of innovative solutions (29%), unreliable or poor response time (26%), not putting the client’s needs first (22%), lack of expertise in industry vertical (18%), being difficult to work with (17%) and lacking cloud service offerings (16%).

Trusted Advisors

40% of SMBs perceive the IT firms they engage with as trusted partners, but a larger percentage of SMBs (53%) view their partners “somewhat” as trusted advisors.