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Playing to your strengths - how IT innovation helps SMEs - March 09Firms with limited in-house IT resources can still gain a competitive edge through the innovative use of technologyWe now have 24-hour support. If your business model relies on the web, you have to ensure your connection and server are kept up Ben Goodwin IT director, Simply Games Online video games store Simply Games has, like many growing businesses, experienced the perils of modern commerce at close quarters. Its parent company, Andromeda Entertainment, went into receivership in 2006, since when Simply Games has emerged - following a management buyout - as a smaller, leaner and more tightly focused retailer, operating solely online. Today, the company's leaders are acutely aware of the challenges they face - the internet gives them an opportunity to compete head-on with established high-street retailers; it is also a cutthroat industry in its own right, with several well-established competitors. Simply Games' web site is critical to its prospects. "Our business is purely online and is completely reliant on the internet, and our technology spend reflects that," says Ben Goodwin, IT director at Simply Games. The company aims to keep margins as tight as possible, which means all aspects of technology support have to be justified. For example, originally the web site was built using Microsoft's ASP web application framework. Following the buyout, the decision was taken to rewrite the entire site using the open-source PHP scripting language. "Hosting in PHP was cheaper than ASP and more flexible. Today, there is not much between PHP and .Net, but with open-source software, thousands of people are involved in its development to move it forward," says Goodwin. Going down the open-source route has enabled Simply Games to minimise costs elsewhere, too. For example, the firm uses the Fedora Linux operating system on its servers, which means it avoids paying software licence fees. This strategy has allowed the company to focus its technology spend on areas that can provide competitive advantage. The watchwords for the IT department are flexibility, reliability and security - the differentiators for today's online retailers. "We have a dedicated server in a hosted environment provided by UKFast. We have full control of the server so, for example, we are not restricted from installing security certificates, but gain the security and reliability of backups provided by UKFast's datacentre," says Goodwin. Having a dedicated server means the company is not competing with other clients' web sites for bandwidth or processing power. However, this is a more expensive option than using a shared server. "A dedicated server costs a lot more than a shared server, which can cost as little as around £20 per month. But it is worth paying for peace of mind over security," says Goodwin. "For example, if you store credit card details you would not want a shared server." Alongside overseeing IT investments, Goodwin has to pay particular heed to how his IT suppliers and partners are serving the business. Sometimes looking for partners that understand the needs of a growing business pays dividends. A different supplier originally hosted the company server, recalls Goodwin, "but it was a large firm and we found it took time for them to react to problems". The relationship broke down a little over a year ago. "The crunch came in Christmas 2007 when there was a problem with the server's network card," he says. "It took the supplier two and a half days to fix, but it should have been a 10-minute job. It happened at our busiest sales time, costing us money in lost sales as the site was down." Simply Games now pays about £500 per month for its UKFast hosting service. That is nearly three times more than its previous contract, but Goodwin says it is worth it. "We now have 24-hour support and if there is a problem, UKFast picks up the phone by the third ring. Some small and medium-sized enterprises (SMEs) may be reluctant to pay for a more expensive service, as often startups just focus on keeping costs down, but if your business model relies on the web, you have to ensure the infrastructure is in place and your connection and server are kept up," he says. The contract also specifies some enterprise-class support provisions not always built into SME agreements, such as having a dedicated account manager. "It is great to have a person at the end of the phone if something is not going right, rather than just a general support number and an email address," he says. As traffic has increased, Simply Games has upgraded its IT, recently investing in a new, higher-specification server. "As a growing business, we need to be scaleable, and the new server is coping fine with traffic, but if we needed to improve performance further, we would look at buying another server and load balancing between the two," says Goodwin. While Goodwin is happy to invest in server upgrades, he is more cautious about the business value of software upgrades. "Our office environment runs on Windows, but we did not move to Vista as soon as it was released. As an SME, as long as we have Word, Excel and the internet ticking along, there is no need to be bleeding edge. Also, new software often has bugs and software compatibility problems, so we upgrade on a needs-only basis," he says. One area where the business case for a software upgrade was overwhelming was graphic design support, where the firm uses products from software maker Adobe. "There are cheaper packages on the market, but our business is the internet and we invest appropriately," says Goodwin. Goodwin is also acutely aware of the need to maintain a good reputation amid intense competition. Simply Games uses the dotMailer service to send marketing emails that are paid for on a volume basis to target customers legitimately and track successful campaigns. "When the old company went under, some customers did not receive their goods and some received emails from Simply Games that they reported as spam. If emails are flagged as spam, the server that has that IP address will not be able to get emails through and legitimate emails are stopped from being sent. We did not wa nt to end up on a spam list and have invested in dotMailer to ensure our credibility, protect our email, boost online revenue and access marketing reports," says Goodwin. Other key technology investments include the use of search engine optimisation technology, along with tools to ensure its best prices are picked up by comparison sites. "We have brought our image back to where we want it to be," says Goodwin, and investing in technology has been part of that process. "Any SME should decide what it can do best itself and use third parties if it does not have the technological expertise. The point is to know your focus," he says. |
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