The place of ICT in SME development
cannot be overemphasized. SME development in this global economy definitely
depends on using ict tools to achieve maximum impact. Before we go deeper into
the discussions, let us attempt to define the both terms.
DEFINITION:Information and Communication Technology
It
is the study or business of developing and using technology to process
information and aid communications. ICT
is an acronym for information communications technology. It is concerned with
the storage, retrieval, manipulation, transmission or receipt of digital data.
The data is transferred or communicated to people over long distances via
electronic means. It also deals with any communication device or application,
encompassing: radio, television, cellular phones, computer and network hardware
and software, satellite systems and so on, as well as the various services and
applications associated with them, such as videoconferencing and distance
learning.
DEFINITION:
Small Medium Enterprises
Small and medium enterprises (SMEs) or small and medium-sized businesses (SMBs)
are companies
whose personnel numbers fall below certain limits. The abbreviation
"SME" is used in the European
Union and by international organizations
such as the World Bank,
the United Nations
and the World Trade Organization (WTO). Small enterprises outnumber large companies by a
wide margin and also employ many more people. SMEs are also said to be
responsible for driving innovation and competition in many economic sectors.
Every country has its own definition of
what is considered a small and medium-sized enterprise. In the United States,
there is no distinct way to identify SME; typically it depends on the industry
in which the company competes.
In the European Union, a small-sized
enterprise is a company with fewer than 50 employees, while a medium-sized
enterprise is one with fewer than 250 employees.
Canada uses the term SME to refer to businesses
with fewer than 500 employees, while classifying firms with 500 or more
employees as "large" businesses.
Breaking down the SME definition, Industry Canada
defines a small business as one that has fewer than 100 employees (if the
business is a goods-producing business) or fewer than 50 employees (if the
business is a service-based business). A firm that has more employees than
these cut-offs but fewer than 500 employees is classified as a medium-sized
business.
IMPACT OF ICT IN SME DEVELOPMENT
ICT has impacted the way SMEs do
business worldwide. Basically what ICT does is to make business processes
easier through streamlined and unified communication systems. Let us take a look at a few of these areas;
COMPANY PROFILE DEVELOPMENT
A
standard company profile includes information on the company so that readers
and other interested parties can learn more about the company. A company
profile explains how the company was started, when it was started, who started
the company. The company profile also serves to communicate what the vision of
the company is, as well as what the company mission statement is. This helps
consumers to determine whether or not they want to support the business.
The first place a company’s profile
should be seen is online. This way other stake holders can make corrections
printing on paper.
BRANDING
As we all know the formula for
branding is Paper design + Logo design + Web design = Branding.
Having a website in this ICT age is
the second most important aspect of branding
only after logo design, you can do for your business. Any business that doesn’t
have a website does not appear serious to customers and thereby loses
credibility for this. This also goes a long way in limiting the prospects of
such a business. You will also agree with me that you are usually more at home
with a company that has a www address than those without.
PACKAGING
The way you package your website
goes a long way to determine how packaged your business is. You should have an
interactive website that can aid interaction between you and the client or
customer. For example some websites are able to respond to e-mails on your
behalf, immediately the customer or user sends in a request. As he receives a
response while he is still online gives him or her impression that the company
is responsive.
MARKETING
Marketing – The role of ICTs in
marketing cannot be over emphasized. With the role Facebook and other social
media are playing in marketing today, it will be clearly insensitive not to be
online to market your product.
ORDER TAKING
After you have done marketing and
attracted customers to your products and then to the site, with an adequately
interactive site, you can take orders from customers and send acknowledgements
to their e mail addresses as the order is received.
FEEDBACK FROM CUSTOMERS
RECEIVING feedback from customers is
one area that any serious business must focus its energy on. This is because
marketing oriented companies will always do better than sales oriented
companies. Getting feedback from customers helps companies to know which areas
they need improvement and which areas to re-engineer in the business.
ONLINE TECHNICAL SUPPORT
A lot of companies offer round the
clock online technical support for customers. This is very essential as
creating a blog of frequently asked questions and answers from the professional
goes a long way in helping customers solve similar issues.
ICT AND SME COMPETITIVENESS
Flexibility is considered to be a
major source of competitiveness for SMEs compared to larger enterprises. The
use of ICT could now on the one hand increase the competitiveness of SMEs as
they enable the creation of more flexible links with trading partners because
of faster and more reliable communication channels. On the other hand ICTs
could help bigger enterprises to increase their flexibility through a
restructuring of the organization which will enable them to adapt quicker to
changing conditions. Therefore the competitive advantage of SMEs could also
decline.
In general SMEs rely much more on informal
information systems than larger enterprises. To get the relevant information
that is needed for a rational decision is not costless especially as in SMEs
usually there is only one decision maker –the owner/manager–who’s personal
resources (time, knowledge, and capabilities) are restricted. However SMEs have
the advantage of smaller internal coordination costs, as all decisions are made
by one or few people.
With the use of ICTs transaction
costs could be lowered and therefore the economies of scale in business can be
reduced. This will enable SMEs not only to stick to local markets but to expand
regionally and internationally. On the other hand many SMEs that are located in
rural areas serve the local niche market and are protected against competition
from bigger enterprises because of high transport and communication costs.
Therefore ICTs might also increase competition for these enterprises, so they
either have to become more productive or to close down. There are hardly any
studies that analyse the effect of ICTs on small enterprises in developing
countries, partly due to data problems.
Findings for Indian manufacturing
SMEs show that enterprises that use more advanced forms of ICTs have on average
a higher labour productivity and a higher growth rate. In a survey of 59
electric and electronic manufacturing Indian SMEs mainly employing less than 50
people, it was observed that there were higher profit margins, skill intensity
and export and import intensities for firms using IT. There is also some
evidence that export performance of SMEs is related to ICT adoption. However it
is not the investment in the technology alone but the combination with other
technologies and especially relevant skills that make ICT work.
A more qualitative study stresses
the different information and ICT needs for different types of SMEs. They
conclude that smaller SMEs with little working capital (which they characterise
as survivalists and trundles) rely mainly on informal information from known
sources where personal relations and trust plays a major role. For these enterprises
ICTs are of minor relevance and only telephone can help to increase access to
this kind of information. As phones can help to extend social and business
networks and in some cases substitute for journeys and business intermediaries
access to telephone services should be given priority. However, for bigger SMEs
that are growth oriented, belong to the formal sector, are export oriented etc.
information becomes more important and therefore more advanced ICTs can be
helpful for building business linkages.
This goes a long way to tell you
that from start to finish your ICT strategy has to be built up. So u can see
that tailoring your ICT needs according to your daily processes is key in
designing your ICT systems. Please always use a professional to aid in
designing and implementing your ICT systems. Thank you.
For Enquiries Contact Austin on
08030991029
