UK small.biz blows £1.5bn on useless software

Staggering annual cost of ill-advised expenditure

British small and medium-sized companies are wasting £1.5bn a year on badly-designed business software that does not meet their commercial needs.

According to a poll of 400 UK SMEs conducted by software developer Benchmark Software, the problem is due to a chasm opening up between what companies need from technology and what software vendors actually supply them.

Almost 40 per cent of SMEs were found to have wasted big chunks of their hard-won IT budgets by purchasing software they never use. When asked to specify the reasons for this, nine out of ten firms admitted that it was because the software was difficult to use, while more than half said that it was because the software was not what they had expected.

This problem was found to occur despite the fact that over 60 per cent of respondents said they had difficulty in justifying software expenditure.

The study also found that over three quarters of small companies have trouble working out the differences between software packages; while 70 per cent complained that it was a struggle to find software companies that allow them to "fine tune" software to suit their specific business needs.

"As the UK SME software market was estimated to be worth £4.1bn last year, this means that British SMEs could be wasting £1.5bn buying software they never use," said Simon Harvey, managing director of Benchmark Software.

"Vendors have become their own worst enemy with many software companies unable to say what they actually do, confusing prospective buyers as well as existing customers. Too many software companies try to sell to SMEs by using confusing marketing jargon to emphasise special functions and features, rather than explaining their products' basic purpose."

Harvey added that he expects the problem to get even worse as software companies which have traditionally sold into the enterprise market begin to target the SME sector. ®

Sponsored: Driving business with continuous operational intelligence