Small businesses in IT are unable to invest in IT upgrades in their offices unless things stop working or are too out-of-date to function effectively, it has been stated.

Ganesh Selvarajah of Business Link, the government-funded support service, said that most of the businesses he deals with are using "posh email services" as well as smartphones such as BlackBerrys to make their daily workload much easier to deal with, though it is the office-based solutions which are holding companies back.

He explained: "It's very much still office-based equipment that we're looking at and the equipment [is updated] usually only when there's been a system failure or their applications are getting very resource hungry and therefore the hardware can't cope or the hardware is too slow."

Otherwise, businesses will not carry out regular system reviews, only spending money when absolutely necessary, such as on laptops or printers.

Earlier this month, Steve Garnett, a chairman at Salesforce, said one way a company can cut down on its costs is to invest in outsourced software.

In a recent survey of SMEs for Connect, the two most important benefits of outsourcing were guaranteed response times and allowing in-house IT staff to concentrate on more strategic issues.