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Story URL: http://www.silicon.com/research/specialreports/sme/0,3800004380,39128680,00.htm

"Size matters" for IT procurement say CIOs
SMEs can provide the innovation but not the scale and support…

By Andy McCue

Published: Monday 14 March 2005

The scale required to support standard global IT infrastructures combined with tightly-controlled central procurement policies still means most small and medium-sized (SME) technology vendors are ruled out of the buying equation of large organisations.

That was the view of a panel of UK-based heads of IT in private sector firms at the UK Technology Innovation and Growth Forum in London today.

Isobel Thomson, head of European IT at Heinz, acknowledged the innovation offered by many SME vendors but said unless this fits in with her company's global IT standards it just adds cost and complexity.

"I can't afford to focus on too many niche products. The monopoly may not be the best approach but it’s certainly the easiest for IT directors. Country by country I'm being driven in different directions so standardisation is essential for me," she said.

Thomson said she would rarely deal directly with any SME vendor and that the only route into Heinz would be through partnering with one of the company's big established suppliers such as HP or IBM.

But other user companies on the panel said that while they stick with the established players for mission critical infrastructure they do look to SMEs for innovation.

Ken Davis, head of IT at TV channel Five, said: "There are areas of your business where you are looking for differentiation and that is where you look to SMEs for the innovation."

Luke Mellors, IT director at The Dorchester, used an SME supplier for a project to overhaul the hotel's in-room entertainment systems but warned that firms also need to assess the risk of working with a smaller supplier.

He said: "If the win is going to be marginal then why would you take the risk?"

The story was much the same from public sector users who admitted that while e-government has increased opportunities for SME suppliers it can still be an uphill struggle to get a fair crack at contracts.

Peter Ryder, head of ICT at Preston City Council, said: "Here, size matters. It is quite difficult sometimes to get small companies on that treadmill."

Check out silicon.com's special report on SME procurement to find out how smaller suppliers can get a foothold in the big accounts of UK plc.