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July 16, 2013

Cloud computing could cut costs and boost productivity for medium-sized businesses

The companies are less productive than their larger counterparts.

By Joe Curtis

Cloud computing could boost businesses, which have outdated IT equipment that is holding them back, according to a report.

Medium-sized companies are lagging behind larger firms in terms of productivity because of lower levels of investment in the latest IT technology, according to research by the Centre for Economic and Business Research (Cebr) and cloud platform provider Cordys.

The middle-weight firms are generating £1,518 less per employee than large businesses, according to the data, and researchers attribute this to a lower rate of IT adoption.

Senior Cebr economist Shehan Mohamed said medium-sized businesses are subject to stricter lending conditions and higher supply chain costs which leave them with less money to spend on updating their IT equipment.

He added that the older technology leads to more time being lost through slow business processes, which then create additional costs.

The report demonstrates a total of 84% of large enterprises in the UK use intra-company data sharing solutions compared to 66% of medium-sized firms, while 42% of large companies sell online, in contrast to just 28% of medium-sized businesses.

However, the report claims cloud computing could provide a solution for firms that cannot afford the latest technology.

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