Small to medium enterprises - the final frontier for information management

As the price-performance ratio of computing systems improves, applications for sophisticated information management are coming within the reach of the small to medium enterprise. But there are still obstacles to their uptake, despite the relative lack of legacy systems. David Hovenden reports.

While large enterprises have had computer systems for decades, small to medium enterprises (SMEs) have only recently been able to afford computers in any number. With a PC now available for less than $2000, even the smallest operation can have a computer network. The major advantage for these newcomers to the IT world is that they do not have the problems of integrating legacy databases or proprietary systems.

With the advent of other communications technologies, the need to manage information more effectively is becoming critical for all companies. Information management is forming the basis of many companies' competitive advantage.

The proliferation of popular applications from Microsoft, Lotus, IBM and Novell has seen the SMEs produce company data by the gigabyte. Much of it, however, remains unstructured and generated by users who are simply using their computers to do the same thing they did before but with arguably greater efficiency. The real stumbling block for SMEs remains the capacity to re-engineer their businesses to take advantage of these tools.

"Some sites we have implemented only cost $20,000 and that includes the scanner."

Large firms have shown that the use of imaging, workflow and document management applications can enable this level of restructing and resultant gain in efficiency.

It appears that the more entry-level versions of these applications are not being adopted. Either they're considered too expensive (with some applications costing over $1000 per seat) or too difficult to employ.

It is argued that the needs of the low-end are sufficiently different to demand a completely new approach.

Frank Stranges, managing director of start-up vendor Australian company 80/20 Software, which has just released an document management extension for Microsoft Exchange (see story below), believes the only way to make a document management system for all the SMEs is to build it from scratch.

A brief history

In the past, these applications were not available to the SMEs because there was not a need. Rather, major firms such as the banking, insurance and finance industries have been the early adopters of imaging, workflow and document management solutions. They have also been the companies to part with millions of dollars to gain these efficiencies.

A major reason these huge enterprise sites can cost so much is due to integration. Large enterprises have had legacy systems that have crunched numbers for 30 years or more. Organisations keep these systems for years and slowly upgrade them piece by piece. Installing a document management system for one of these systems can involve thousands of hours of development work to ensure a smooth interface. This is what comprises so much of an installation.

It is also a reason why many of the traditional information management companies will not pursue the small market. They have too much in development expenses built into their products to allow the price point to lower to a level attractive to the SMEs.

Although the major vendors may not yet offer shrink-wrapped solutions, they are conscious of the needs of this market and lowering their entry point as well.

John Frost, managing director of Tower Technology, one of Australia's major information management companies, said that he has seen a shift in the types of companies that are looking at installing information management solutions.

"The 'middle chunk' of business haven't been big adopter" he said. "It's the success of the companies that have picked up these technologies that has sparked the uptake in the boardroom," he added.

Engineering and manufacturing is one sector where Tower has witnessed real growth.

"Hundreds of companies in that size are seeing the benefits and picking [information management] up," he said.

Local councils are another sector that have been embracing information management and gaining real efficiencies.

Geoff Redman, national marketing manager for Advanced Data Integration, says that local councils have become quite a big adopter of information management solutions.

While implementing very large-scale sites such as the Queensland Residential Tenancy Authority and the Albury-based Australian News Print Mills, Advanced Data Integration has also catered for quite a few smaller sites.

"Some council sites that we have implemented only cost $20,000 and that includes the scanner," he said.

Other council sites have been worth more than $500,000.

"A few years ago you used to need half a million to even start looking, now [information management] is affordable," Mr Redman added.

Being able to interface common products such as Microsoft's Exchange and Lotus' Domino is bringing the technology within the reach of many businesses, said Mr Redman.

Beware cheap and nasty

The danger with small systems is that there are still proprietary systems being sold. Despite the much-publicised need for open standards, the lure of installing a system with a proprietary database and storage systems is often irresistible for a cash-strapped SME.

The information management solutions for the SMEs are still in a state of relative infancy. As organisations grow in awareness that information management is more than just a technical platform, it's an entire business philosophy, then the demand for it will increase, executives predicted.