UK small businesses are failing to set sufficient briefs for IT projects, research finds.

According to a survey of 200 IT professionals, two thirds of IT projects fail because the brief changes after the project has begun. Furthermore, two thirds of respondents say they have been involved in IT projects which have not been as successful as they could have been.

Despite IT budgets continuing to be constrained, meaning that when IT projects are given the go-ahead it is even more imperative that they are made a success, still many are failing to set a sufficient brief to avoid failure.

Statistics from the British Computer Society show that between 1998 and 2005 across the European Union only one in eight IT projects were considered successful. The rest were cancelled, suffered significant cost or time overruns.

Thomas Coles, managing director of MSM Software says, ‘Software projects are resource intensive and complex, and have a reputation for being both expensive and risky. This reputation is all too often validated by an abundance of projects failing. Yet, the failure of an IT project due to a changing brief is completely avoidable.’

Coles believes that the success rate of IT projects would be significantly increased if businesses and suppliers worked more closely, and transparently, at the discovery phase of a project.

‘By doing this, long-term business processes can be established and technology designed specifically to support the individual business requirements. Collaborative working in this way is fundamental as the success or failure of a software project can also determine the future (or failure) of a business,’ he adds.

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‘National Sickie Day’ will cost UK businesses more than £34 million, an employment law expert predicts.

Research from ELAS suggests that the combination of wintry weather, commuting to and from work in the dark, Christmas credit card bills and a long wait until the next holiday makes Monday, 6 February the day Britons are most likely to call in sick.

However, according to the organisation the number of days workers award themselves for a bout of fake illness is falling as the economy falters, with most staff now only daring to spend one day away from the office.

Peter Mooney, head of employment law at ELAS says, ’We have been keeping a close eye on absenteeism for years, and there has always been a sizeable number of skivers who, having phoned in sick once, award themselves a second day to make their illness look more believable.

‘But in the past 12 months, a combination of the stuttering economy and managers finally grasping the nettle over absenteeism has seen that particular trend end.’

While the number of people suspected of throwing sickies continues to grow steadily, the length of time they’re off work is falling fast, adds Mooney.

Based on its monitoring of absenteeism nationwide, the company estimates that as many as 400,000 UK workers will ‘throw a sickie’ on Monday.

Mooney continues, ‘You might expect that those people lucky enough to have a job in the current economy might do everything within their power to keep it, but our research has found that that’s not the case.

‘If anything, the constant doom and gloom about struggling businesses and public sector cuts seems to make people more likely to treat themselves when they can – and an unofficial day off work is one perk many people feel they’re entitled to from time to time.’

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More small and medium-sized enterprises (SMEs) have seen a quarterly reduction in sales volumes than large companies, research finds.

According to insolvency trade body R3, 29 per cent of smaller businesses saw shrinking revenues in Q4 compared to Q3, with just 6 per cent of large businesses reporting the same.

The research also finds that more than one third (34 per cent) of SMEs are experiencing decreased profits on the quarter compared to 19 per cent of big businesses.

R3 president Frances Coulson says, ‘The government has created a number of schemes to support SMEs as they are vital to the health of the economy, but they need more help to survive this difficult economic environment.

‘It is clear that many SMEs are not financially robust enough to withstand the economic pressure. Either more support is needed in 2012 to enable a real recovery, or some businesses will inevitably fail rather than continue to limp along, damaging competition.’

Across the board, fewer businesses (58 per cent) report seeing ‘signs of distress’ than the last quarter (68 per cent) and significantly less than December 2010 (77 per cent).

The report also finds that businesses able to make and receive online payments are faring better than those that can’t. Some 39 per cent of those that can’t use online payments are experiencing decreased profits, compared to 25 per cent of those that can.

Furthermore, 34 per cent of those who can’t use online payments have seen a reduction in sales volumes, compared to only 19 per cent who can.

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The UK manufacturing sector started 2012 on a positive footing with a key sector index rising to an eight-month high.

The seasonally adjusted Markit/CIPS UK Manufacturing Purchasing Managers’ Index climbed to 52.1 in January, from a revised reading of 49.7 in December.

Contributing to the performance was output expanding at the fastest pace since last March, new orders rising following a period of contraction and payroll numbers stabilising. Cost pressures continued to ease, as average input prices fell for the third straight month.

Manufacturing production also expanded for the second successive month, supported by growth of new orders and the clearance of backlogs of work.

Foreign demand rose for the second month running in January, amid reports of improved order inflows from clients in Brazil, China, the Middle East and the US. However, the rate of increase was only moderate and less marked than one month earlier.

Average input prices declined for the third successive month in January, with the rate of deflation the steepest since June 2009. Manufacturers reported lower costs for commodities, metals, packaging, paper, plastics and timber.

Rob Dobson, senior economist at Markit says, ‘January saw manufacturing kick-start back into life, with output expanding at the fastest pace since March 2011 and new orders rising for the first time in seven months.

‘Growth is nowhere near the surging highs of 12 months ago, but this is nonetheless a vast improvement on the 0.9 per cent reduction in output seen at the end of last year.’

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The Forum of Private Business (FPB) has shunned a government announcement that legislation to improve the so-called ‘pre-pack insolvency’ sales process will now not go ahead.
 
The practice, which allows companies to start again while leaving their creditors unpaid, was set for new controls, obliging insolvency practitioners to notify creditors in advance of a pre-pack and allow three days for the proposals to be challenged.
 
However, the government has decided the benefits of the proposed controls are outweighed by adherence to the government’s current ‘moratorium’ on new regulations, an attempt to cut red tape.
 
While a recent survey from the FPB shows small firms’ annual red tape bill has reached £16.8 billion in total, the organisation claims that the UK’s small business population is owed more than £33 billion in outstanding invoice payments.
 
Forum senior policy advisor Alex Jackman says, ‘Cutting red tape is hugely important but, against the backdrop of the government’s deregulatory agenda, this is one area where tighter legislation would protect more firms from ‘phoenix’ companies abusing the pre-pack insolvency process by starting again while failing to pay them.
 
‘Late payment – or in this case non-payment – devastates firms’ ability to maintain any kind of healthy cash flow and threatens their very survival.’
 
The Forum suggests solutions including the requirement of the approval of the court or creditors, or both, for all pre-pack business sales to connected parties.
 
Other proposals include tightening the rules against directors involved in multiple pre-pack insolvencies and preventing administrators actively promoting pre-packs as ‘business as usual’, following concerns that some are advising their clients to actively pursue this approach.

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