This paper is based on a recent report from the Dutch Council for Small and Medium-Sized Enterprises, in which an indicator is deduced for the present state of the application rather than the development of technology in the business sectors. The application of information technology is the prime concern. We shall demonstrate that much of the literature in the field of indicators concentrates on larger companies. In our set-up, the indicator can be tuned to the branch level, but it can be applied to all companies, including the smaller ones. The indicator then is tested in an SME-rich sector—the car dealer branch. In the final part of this paper, we lake a closer look at the problems surrounding the diffusion and implementation of information technology in SMEs and close with some policy recommendations.