As the cost of IT comes down, it’s changing the ways small businesses use technology. Peter Cochrane examines this trend.

In my working life I have been involved in companies large and small, from the mighty international conglomerates to the one-man band. During this time I have observed people trying to master the management of different-sized organisations – the complexity of thousands of people interacting in a business distributed across the globe, versus the singleton with the feast-to-famine cycles that characterise the very small business.

The great thing about a large corporation is you have a phenomenally large resource and an ability to tackle almost any problem no matter its size. Better still, you can often do this without fundamentally risking the business as a whole. The downside is without doubt the treacle of administration, regulation and bureaucracy that slows you down.

In contrast the small company is incredibly fleet of foot, fast to move and respond to customers and the world about it but has none of the resource of the large corporation. In fact it is quite the norm that you have to do absolutely everything yourself. This single aspect often makes it impossible for people to migrate from large to small organisations.

What we need is the small company agility with the large company capability. So far few large organisations, if any, have achieved anything remotely like this ideal agility. And the small companies fail to form cooperatives to leverage their combined purchasing power and workforce.

Looking at the deployment of IT and technology in general, the large corporations have tremendous latitude in the marketplace. They can experiment, trial and test to hone up their systems to meet their precise requirements without diverting critical human and other resource. However, in the small company it is often the case there is little latitude for experimentation. The focus is on the here and now. At best, change at small businesses is down to the few individuals who manage to convince their colleagues to adopt their favoured technology.

Ten years ago this was all extremely problematic because the fundamental cost of the technology meant the potential return on investment for the small corporation was offset by the immediate risk. Today that has changed as the cost of technology is now so low that each individual in any company large or small can personally afford to provide his own IT. The biggest change I see in the way small businesses operate is the coming independence of purchase naturally afforded individuals.

In a small company you would no more think of providing people with pens and diaries than you would a mobile phone – because they already have one. So why provide them with a laptop computer and printer? This is especially true when you contemplate the rapid movement of staff between companies large and small. Young people come ready and able to provide their own IT, given the company has installed a network capable of providing the fundamental connectivity and bandwidth.

During the last five years in particular, I have seen a transformation start in the small start-up companies. They now seem to have the latest equipment; I no longer see many four-year-old laptops and five-year-old PCs.

So where then is the IT problem for the small companies who employ just a handful of people? It’s the software.

Today’s operating systems and applications demand frequent updates and ultimately upgraded hardware. The time taken to install and maintain a given program or update on every machine in some coordinated fashion is not small. In many cases having the latest software doesn’t seem to matter – until some document lacks backward compatibility and demands all system upgrade to that version. Anyone who is sufficiently out of step in their replacement cycle can find themselves isolated from parts of the company.

My advice to small companies struggling in this regard is for each individual to take the trouble to get trained up to the point where they can master these changes. Alternatively employ a part-timer who can help them through the difficulty of installation and update.

Only three years ago a good laptop cost $2,000 and now it is less them $1,000. A PC was $1,200 and now is $600. Put this against the expense of office space and executive travel and it really is insignificant. The cost of software has remained relatively high but even so remains relatively insignificant as compared to the whole.

Gradually the provision of IT is becoming inconsequential for everyone. The productivity gains and ROI have taken precedence and the population at large is getting increasingly tech-savvy. My guess is our world will become more and more ‘DIY IT’ and if people cannot rise to the challenge, they will most likely be sidelined.

Came up with column idea midday on Monday, dictated later that evening and despatched as a sound file to my PA. First draft received the next morning at Liverpool St Station London via Wi-Fi service, then rewritten and despatched to