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European small and medium sized businesses are confident of delivering growth in 2003 according to new pan-European research released today by Lexmark the printing solutions provider. The findings show that a massive 76% of small businesses in the UK are confident of growth in 2003, along with 58% of French and 50% of Italian SMBs. Of the countries surveyed only German SMBs were pessimistic about the coming year with only 26% predicting growth.

The majority (52.6%) of European small to medium sized companies are expecting to see growth of up to 10%, however an impressive 18.5% of UK companies expect to see their businesses grow by 21-50% compared to 2002. Italian SMBs are also predicting impressive growth with 26.8% forecasting growth of between 10-30%, this compares to 18% in France and only 7.7% in Germany (none of whom predict growth of more than 20%).

This confidence is good news for technology companies too, with the majority of European SMBs surveyed forecasting that they will increase or at least maintain their investment in IT over the next 12 months. UK small businesses are again leading the way with 78% expecting to increase or maintain current levels of spending on IT compared to 68% in France, 62% in Germany and 56% in Italy.

41.5% of all companies surveyed forecast an IT spend for 2003 of less than £50,000. However UK respondents also cited the highest levels of expected spending next year with eight percent predicting that they would spend over £300,000 compared to 4% in Germany, 2% in France and none in Italy.

But do small businesses really know how much they are spending on IT ?

According to Lexmark’s research it seems that there is some confusion among European small to medium sized businesses about how much they actually spend on IT every year. Despite the fact that the survey questioned both IT and financial directors, 16.5% of companies across all markets said that they had no idea what the Cost of Ownership (COO) of their current IT system was.

However companies in the UK and Italy were more guilty of this with an incredible 30% of UK and 24% of Italian SMBs not knowing the COO of their IT. This compares to only 8% in Germany and 4% in France. Companies faced similar problems when asked how their IT affects the bottom line – 23% were not sure how their IT systems contributed to profitability – rising to 32% in the UK.

Printing costs are a simple example of how many SMBs fail to understand how technology can impact on their profitability. Whilst the survey found that 61.5% of SMBs believe they spend between 1-5% of their company’s revenue on printing, a worrying 11.5% of companies thought that printing costs equated to between 10-20% and above of their revenue. In addition, one in five (18.5%) could not tell us how much their printing costs their company.

Jane Cronin, director of channels and marketing for Lexmark UK commented

"The results of this research tell us a lot about how companies view their IT systems. There seems to be a variance between those that see IT as an integrated part of their company’s success, and who understand its centrality to growth and profitability – through to those who are unaware what they are spending on IT and what it can add to the business."

She continues; "It is important for small businesses to be able to track the impact of IT on their business – from the man hours spent on maintenance, through to the amount of paper used in printing and running costs of ownership. Only then can companies understand what investment is needed in the future and plan their purchasing accordingly."

The role of IT: are you thinking strategically?

This knowledge gap in some companies may be a reflection on the role of IT within an organisation. In 30% of European SMBs the staff responsible for IT are not involved in senior management or planning meetings, indicating that IT is not viewed as a key strategic tool. France and Germany again perform better than the UK and Italy in this respect with 24% and 16% not allowing IT directors into senior management meetings.

The career development of key IT staff may also be to blame for this lack of strategic use of IT. UK SMBs have the lowest amount of professionally trained IT staff with only 28% compared to 68% who moved into the role organically from other positions. This compares to 64% of German, 54% of Italian and 42% of French SMBs who have professionally trained IT directors.