There has been a huge amount written about data, digital transformation and, more recently, AI. UK businesses are continually being encouraged to adopt more technology, automate more processes and make greater use of the information they already collect.
But I think there is a more fundamental question worth asking.
Do UK SMEs actually have a shortage of data, or is the bigger problem being able to see what their data is telling them?
We decided to look at the latest research to find out.
What we found was interesting. UK businesses appear to have plenty of data. Technology adoption amongst SMEs is also relatively high. Yet there remains a substantial gap between having data somewhere within a business and using it to generate the insight needed to make better decisions.
That distinction matters.
SMEs are not short of data
The UK Business Data Survey 2026 provides perhaps the clearest starting point.
The Government research found that 86% of UK businesses handle digitised data. Among businesses with 10 or more employees, that rises to virtually universal levels, with 99% of both small and medium-sized businesses reporting that they handle some form of digitised data.
So, for most established SMEs, the challenge is unlikely to be that no data exists.
The information is already being generated through finance systems, ERP and MRP systems, CRM platforms, purchasing systems, production systems, spreadsheets, stock records, supplier information, sales orders and numerous other processes used to run the business.
The much more interesting finding comes when we look at what happens to that information.
Having data is very different to generating insight from it
Among UK businesses handling digitised data, only 25% said they analyse it specifically to generate new insights or knowledge.
There is also a clear difference as businesses become larger. Some 35% of small businesses and 49% of medium-sized businesses reported analysing data to generate new insights, compared with 69% of large businesses.
For manufacturing businesses, the figure is particularly striking.
Just 12% of manufacturing businesses handling digitised data said they analyse it to generate new insights or knowledge.
This does not mean that the remaining manufacturers do nothing with their data. Production systems, finance systems and ERP platforms are clearly being used every day to run businesses.
But there is an important difference between using data operationally and bringing information together to understand what is happening across the business.
A system might tell you how much stock you have, while another tells you sales. Finance can tell you margin, purchasing can tell you what is being ordered and your supplier information might tell you which suppliers are creating problems.
Individually, each provides useful information. The bigger opportunity comes from understanding how those things interact.
Buying technology has not solved the problem
Perhaps the natural assumption is that businesses simply need better systems.
The evidence suggests it is not quite that straightforward.
Research commissioned by the Department for Business and Trade found high levels of digital technology adoption amongst SMEs. Depending on the survey methodology used, 79% to 94% of SMEs were already using digital technology.
More than 90% of respondents in one strand of the study said adopting technology had generated positive outcomes, including saving time, reducing costs and improving decision-making.
Yet the same research found a group of businesses that had purchased technology without fully utilising it. In the online survey, this represented 24% of SMEs surveyed.
The technology can therefore exist without the business necessarily extracting all of the value from it.
That distinction can become even more apparent as businesses grow.
An SME might start with an accounting platform and spreadsheets. As the business develops it adds an ERP system, CRM, purchasing tools, production systems and specialist applications.
Each individual problem may have been solved.
But another problem can slowly be created.
The information required to understand the whole business becomes distributed across multiple systems, departments and people.
Manufacturing illustrates the challenge
Make UK’s research into digital adoption provides another useful perspective.
It found that 70% of manufacturers are investing in digital technologies, yet only 10% describe themselves as fully digitalised. Another 69% remain partially digitalised and 18% are still at an early stage of adoption.
The report highlights challenges including skills, legacy systems and integration.
This feels important.
Digital transformation should not simply be measured by how many pieces of technology a business has purchased.
The more important question is whether those investments make it easier for people to understand and improve the business.
- Can managers easily see performance?
- Can purchasing understand the impact of supplier decisions?
- Can operations see how inventory relates to demand?
- Can finance see where margin is changing before it becomes a problem?
- Can information from different functions be viewed collectively rather than through separate reports?
Technology should make those questions easier to answer, not simply create more places in which the answers might exist.
The evidence also points towards a productivity divide
There is another reason why this matters.
The Government’s latest Business Data Use and Productivity Study found that data-driven practices are associated with higher productivity and innovation. It also found that those capabilities are not evenly distributed.
Larger businesses are more likely to employ people in analytical roles, invest in relevant skills and make more sophisticated use of different types of data.
Smaller organisations naturally have fewer specialist resources.
This also reflects findings from our previous research into how effectively UK SMEs are using their business data.
That creates an interesting challenge for SMEs.
They increasingly generate similar types of operational data to much larger organisations, but they do not necessarily have dedicated teams of analysts sitting between the systems and the people running the business.
The answer therefore cannot simply be to produce more reports.
It has to be about making the information already available easier to use.
And now AI is arriving
All of this becomes even more relevant as businesses start adopting AI.
ONS reported in July 2026 that the proportion of UK businesses with 10 or more employees using at least one form of AI had increased from around 12% in late 2023 to around 35% by June 2026.
However, ONS described the depth of AI adoption as relatively shallow. Only 10% of businesses using AI reported using it extensively.
There is another interesting connection.
The UK Business Data Survey found that businesses whose AI tools were integrated into existing business systems were much more likely to analyse data than businesses whose AI tools were not integrated.
That should probably tell us something.
AI may make analysis faster and increasingly powerful, but it does not remove the need to understand where the information comes from, how it connects and what question the business is trying to answer.
If anything, AI increases the importance of getting those foundations right.
So, do SMEs actually have a data problem?
In many cases, I don’t think they do.
They have data.
They have systems.
They have spreadsheets.
They have reports.
And increasingly, they have access to AI.
The problem is that having more information does not automatically create better visibility.
The latest evidence suggests there remains a considerable gap between businesses collecting and using data operationally and businesses turning that information into new insight.
For SMEs, particularly manufacturers, this may be one of the bigger opportunities for the next stage of digital adoption.
Rather than starting with the question “What new system do we need?”, perhaps a better place to start is:
“What do we need to understand about our business that we cannot easily see today?”
That question changes the conversation.
It starts with the business decision rather than the technology.
And quite often, the information required to answer it already exists.
The challenge is putting the pieces together.
From Data to Insight
Understanding that you have a visibility problem is one thing. Understanding what needs to change is another.
Our Data & Insight Discovery starts with the questions your business needs to answer, then looks at the data, systems, KPIs, reporting and manual processes that support them today.
The aim is not to recommend more technology for the sake of it.
It is to understand why important answers are difficult to find, where the gaps or disconnects sit and what would give your leadership team a clearer view of the business.
If you know the information exists but still struggle to see the whole picture, explore our Data & Insight Discovery or get in touch to talk through what you are trying to understand.
About this research
This article was produced by Alliance Procurement Solutions using a review of current UK research into SME data use, digital adoption, manufacturing digitalisation and artificial intelligence.
The principal evidence reviewed included the UK Business Data Survey 2026 published by the Department for Science, Innovation and Technology, the Business Data Use and Productivity Study published in January 2026, Department for Business and Trade research into UK SME technology adoption, Office for National Statistics research into AI adoption in UK businesses, and Make UK’s research into manufacturing digitalisation.
The purpose was not to establish that every SME experiences the same challenges, but to explore whether current evidence supports a distinction between businesses having access to digital information and being able to use that information collectively to generate business insight.