Leveraging the Power of ICTs in SMEs
Micro, Small and Medium-Sized Enterprises (MSMEs) are a significant part of the Caribbean economy, yet they experience sometimes daunting challenges due to their small size and reach. Applying ICT tools and employing business models around digital technology opens up a world of opportunity, especially for smaller firms, to overcome some of their traditional disadvantages and so be able to compete on a more level playing field with their larger counterparts. Traditional MSME challenges include:
- – Limited access to capital (particularly for start-ups)
- – Inadequate access to market information
- – An inability to attract the highest quality human resources
- – Difficulty in servicing large contracts
- – Small promotional/advertising budgets.
Access to powerful but affordable digital technologies facilitated by broadband connectivity and mobile voice and data services is well within the reach of Most MSMEs today, however many remain in doubt, or are altogether unaware, of the tangible benefits that investment in and application of ICTs offer smaller firms.
We discuss a few of the applications made possible today.
e-Marketing- More and more people are online due to increased use of broadband connections and mobile devices that access the internet. This is significant, since because it means that more people get their news, form their opinions and engage in economic activity through these media. Online communities, blogs, social networking sites, search engines, and official company websites, are just a few of the many tools that can be used to target specific demographics with online marketing and advertising campaigns, at a fraction of the cost of traditional marketing vehicles.
Communication– Powerful applications like e-mail, instant messaging, Voice over IP calling and video conferencing mean that smaller businesses have at their disposal extremely cost effective and enhanced abilities to connect, collaborate and coordinate with their key business stakeholders around the world. Such applications make possible certain types of business opportunities that would have been out of reach just a few years ago.
Businesses are able to reduce or eliminate the travel and accommodation expenses that might otherwise have been required to collaborate with clients, attend business meetings, or connect with suppliers overseas. Small businesses can operate professionally and efficiently and at a level never before possible for the small firm, by taking advantage of ICTs.
Market Sensing Capabilities – Internal company databases and other common tools, like office productivity software, can help in-company human resources interpret and prepare gathered information to inform decision-making (ie to create knowledge). This knowledge is then used as a basis for responding and interacting in real-time to or with the competitive environment.
e-Business– Many international firms are moving to facilitate electronic procurement amongst their supplier base. MSMEs who are aware and proactive enough to register on such databases and online marketplaces will be better able to bid on opportunities that come down the pipeline.
Small firms who are able to implement inventory management solutions (as an example), which allow them to give secured electronic access to stock levels, automatic generation of purchase orders when stock levels fall below an agreed level, electronic verification of goods and services and the authorisation of electronic payments, can reduce their purchasing cycles from possibly 7-12 days to one day.
Notwithstanding all of the forgoing, many businesses in the Caribbean are not sufficiently aware of the practical link between digital technologies and their continued economic sustainability or even relevance. ICTs can increase operational efficiency, allow businesses to better serve clients, and provide a platform for employee innovation, among many other things.