Switching off IT costs to start up

THE high street banks failure to make more credit available during the credit crunch for small and medium sized business (SMEs) has resulted in businesses in Hertfordshire innovating with technology to survive and prosper. According to a report by Outsou

THE high street banks' failure to make more credit available during the credit crunch for small and medium sized business (SMEs) has resulted in businesses in Hertfordshire innovating with technology to survive and prosper.

According to a report by Outsourcery, the UK's leading provider of mobile unified communications, Hertfordshire SMEs are now avoiding spending thousands of pounds on IT systems when sophisticated software solutions can now be purchased on a per user-per month basis without the need for hardware or maintenance contracts.

Without bank support, says the survey, many start-up businesses across Herts are struggling to raise the �10,000-plus IT investment often needed to get a business off the ground at a time when e-mail and mobile communications, along with the capacity to interact with customers on line, are becoming essential tools.

Simon Newton, joint chief executive of Outsourcery, said: "Hertfordshire's SMEs are losing out as a result of banks' inadequate provision of credit.

"But the rapid advances in technology means that many of the IT costs involved in setting up a business are withering away.

"Small businesses simply do not need to purchase hardware, servers, software licences and phone systems any more. I believe many of the start-ups which do survive and prosper in the recession will be those that avoid investing too much capital up front on an in-house IT and communications infrastructures which are expensive to purchase and maintain, can quickly become outdated and can prohibit flexible and remote working.

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"Successful businesses will embrace outsourced IT solutions to reduce costs and maintain competitiveness in the current economic climate."

The plight of SMEs was recently thrown into the spotlight when Chancellor Alistair Darling criticised bank chiefs for failing to help struggling small businesses that are paying too much for bank loans that remain in too short supply.

SMEs account for over 97 per cent of UK businesses and make up about half of the private sector in Hertfordshire.

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