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Rediff.com  » Business » Small businesses lose $24 bn in productivity every year

Small businesses lose $24 bn in productivity every year

April 24, 2013 18:03 IST

MoneySmall businesses lose more than $24 billion in productivity every year when non-technical employees, referred to as involuntary IT managers, are tasked with managing their company's IT solutions, a study commissioned by software giant Microsoft said on Wednesday.

This loss is a direct result of the IITMs taking time away from their primary business activities, the AMI-Partners small-business study, commissioned by Microsoft, said.

The 'Involuntary IT Manager' study focussed on the adverse business productivity impact of IITMs in small business in Australia, Brazil, Chile, India and the US.

Surveying 538 IITMs across nationally representative samples of small businesses with 100 employees or less in the five countries, the AMI-Partners research study determined that about 3.8-million small businesses managed internal IT by IITMs.

Although such small businesses spent $83 billion on IT and communications, they lost $24 billion in productivity trying to manage their internal IT, the study said.

On average, IITMs lose six hours per week (around 300 hours per year) of business productivity while managing IT, it added.

About 30 per cent of the surveyed IITMs said they felt IT management is a nuisance, while 26 per cent indicated they do not feel qualified to manage IT.

Six out of 10 IITMs said they wanted to simplify their company's technology solutions to alleviate the difficulty of managing day-to-day IT.

In India, the study found small businesses lost $2.67 billion in productivity, while spending $6.67 billion on IT/Telecom.

IITMs in India lose 7.6 hours of productivity per week managing IT, the highest productivity loss of all countries surveyed, it said.

"Many small businesses do not have the budget for formal IT support, so they rely on the company's most tech-savvy individual to manage their technology," AMI-Partners Chairman and CEO Andy Bose said.

Relying on an IITMs can have an adverse impact on small businesses' productivity, which can negatively affect revenue and translates into a very high opportunity cost, he added.

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