On-line Sales Opportunities Being Lost Through Inadequate Broadband Quality

• Only one third of companies (33%) use the internet for on-line selling.
• Poor quality Broadband still a major impediment to on-line sales.
• Significant rise in social networking, with 50% of smaller companies involved.
• 30% of SMEs report increase in business due to social networking site presence.
• Banking, Communications, Research and Supplier sourcing, the main reasons for using internet.
  • 46% report that internet has reduced business costs.
  • SMART action needed by Government to address broadband deficiencies.

ISME, Monday 22^nd August 2011.

A major survey by ISME, the Irish Small & Medium Enterprises Association, has confirmed that serious inadequacies still remain for companies using ICT, with broadband quality in particular identified as a significant impediment to companies further developing and increasing on-line sales. The Association called on the Government to implement an ICT strategy to assist smaller businesses to increase their on-line sales and to tackle the broadband deficiencies that have been evident for a considerable period of time. However, the results also indicate that there has been an increase in SMEs using social networking sites, leading to increased business and showing the massive potential in that area.

The survey confirms the crucial role played by ICT in improving business performance, with 84% of enterprises having their own website. However the significant potential available for developing business, particularly through on-line sales, is being hampered by inadequate broadband, with 47% indicating quality of service as their greatest concern.

The responses of the 1,034 companies to the survey, carried out in the week ending 19^th August, confirm;

• 97% of companies use the internet for business purposes; 84% having their own web-site.
• 47% of companies outlined that the quality of broadband was the biggest difficulty they faced when using the internet in their business.
• One third of companies (33%) use the internet for on-line selling, a small increase from the 28% in 2010.
• The main purpose for using the internet is banking (87%), communications (77%), research (70%) and sourcing suppliers (63%).
• The average cost of set-up of a web site was €4,568 with an average maintenance of €1080.
• 46% of companies reported that the internet has reduced their business costs.
• 43% of companies (up from 26% in 2010) have a social networking site presence, with the majority (85%) on Facebook and 61% using LinkedIn.
• 30% recoded an increase in business due to using social networking.
• Companies who do not have a website indicated a lack of in-house expertise (40%) and costs (16%), as their main concerns.

Commenting on the survey results, ISME Chief Executive, Mark Fielding, outlined, “The results quite clearly confirm that SME owner managers, after some false starts during the dot com bubble, have embraced ICT and all forms of digital media, as a means of developing business. This is reflected in the rapid increase in social networking presence, which is starting to pay dividends for participating companies. SME owner managers, however, continue to use ICT more for information and communication purposes than for on-line selling. The reasons for this are the availability, cost and most importantly quality of broadband, with the main fear being the loss of customer trust due to poor on-line user experience for 47% of respondents”.

“There is a real danger that the Smart Economy is passing us by and SMEs in Ireland are missing out, as consumers, both domestic and foreign, purchased on-line from outside the State. The increase in the number of 40 foot containers arriving into the country, full of ‘on-line purchases’, is evidence not to be ignored”.

 “It is imperative that, as part of the Government’s Smart Economy agenda, the use of ICT in SMEs is exploited to its fullest and companies are in a position to avail of the most up to date technology at the most convenient cost. Ireland continues to lag behind the EU in terms of broadband penetration rates. The latest Eurostat figures put the EU27 average at 25.6% but Ireland comes in at 22.9% while UK is 30.6%. The Government’s rural broadband scheme is essential to help close this gap and deliver universal quality broadband access by the end of 2012”.

In conclusion, Fielding stated, “It is time for a renewed effort by Government to improve the communications infrastructure through a more focused agenda, with specific targets, measurable deliverables, achievable goals, realistic outcomes and an announced timeframe”.

For further information contact

 Mark Fielding                                                                 

Chief Executive                                         

Tel:   01 6622755                                        

Mobile: 087 2519675