44pc of Irish firms face declining revenues

18 Oct 2006

Some 63pc of Irish companies confess that they are mature or declining businesses, compared with a global average of 37pc, a new survey from Sage has found.

Alarmingly, 44pc of Irish businesses expect to see either no change or a decline in their turnover in the next 12 months.

According to the research, commissioned by Sage and conducted by independent research firm Vanson Bourne on 800 small and medium-sized companies, over half of Irish companies have no plans to move their business to the next stage of growth. This is compared with a global average of 44pc.

The UK and US provided 200 respondents each, while Australia, France, Germany and Ireland each had 100 respondents.

Some 77pc of Irish businesses do not have the time to plan their business strategy and only 13pc of businesses use their CRM (customer relationship management) system to advise on strategy to advance their business plan.

Irish businesses, Sage warned, are falling into the trap of ignoring the important steps of planning and evaluating business performance using appropriate measures. Sage said the research highlighted the urgent requirement for small businesses to look at CRM as a catalyst to drive further growth.

“We believe that small businesses are undervaluing customer data despite its importance for a company’s business from start-up to exit,” said Dave Batt, senior vice-president, Sage Group.

“Customer data should be at the heart of all businesses, wherever they are in the business lifecycle. Understanding what your customers want and planning accordingly is the first lesson of business, yet so many companies are failing to do so. Relying on spreadsheets and figures will only get a business so far,” said Batt.

While Irish businesses may be lagging behind with regard to business planning and lifecycle management, they are leading the way when thinking about their exit strategies, with 54pc of those respondents who stated they had a stake in their business actually had an exit strategy in place.

This was the highest of all countries surveyed and above the overall average of 35pc. Some 37pc of UK respondents had an exit strategy in place.

“CRM plays a vital role in an exit strategy because having customer data in one place becomes a tangible asset in which to secure maximum value from investors, acquirers or family members,” claimed David Larkin, General Manager, Sage CRM Solutions.

“When benchmarked globally Irish companies are leading the way when thinking about how CRM can impact on exit strategies in that 93pc of Irish businesses believe that a CRM system is a tangible business asset and are ahead of other countries by already having an exit strategy in place.

“These findings correlate with the fact that 77pc of respondents already keep their customer data on a CRM system and therefore business continuity would remain,” Larkin added.

By John Kennedy