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Friday, 13 March 2015

Three Ways To Transform Your SME Business


As Datuk Seri Mustapa Mohamed, Minister of International Trade and Industry highlighted in Fokem 2012 that it is evident, Malaysian Small and Medium Enterprises (SMEs) will be a major driver (expected contribution of 41% of GDP by 2020) of the future economy. 

Today the small business landscape is globalized with growing interdependency, and one key internationalization driver is the advancement of technology, with benefits of implementation of technology, as proven by Delhaize America, an operator of grocery chains, having managed to transform its business by adopting technology through running Big Data on the cloud to study the impact of local weather on store and category sales (Forbes: IBM 2014). 

According to Ali S. Saleh, Victoria University and Louis Burgess, University of Wollongong; 74% of respondents (of a sample of 100 Malaysian firms) of SMEs surveyed, indicated that they believed Informations and Communications Technology (ICT) will improve their competitive position, and in regards to future implementation of ICT 50% of Malaysian SMEs indicate they want to do so.

Here are three ways that you can transform your SME business:


1. Adopt a data mindset to your business.


Capitalize on a hidden market opportunity. With the adoption of ICT your SME business is keeping 'on-track' as there is a prediction of increase to 43% of big data technologies over the next 10 years, with the accelerated adoption of the cloud. More companies will look to technology as a strategic advantage to successfully scaling to meet new global economic demand (Joel 2013).

2. Let computers work hard for you.

Enhance your capabilities. ICT enables your SME business to digitally perform daily rudimentary tasks by having reallocation of existing and new human capital to more resourceful positions that would potentially contribute to your SME's economic benefit. In a research, it was found that through data processing advances in the 21st century it allowed Moore Corp. Ltd. to better access the Internet for e-delivery of document viewing, e-billing, e-commerce and web design (McClatchy 2007).

3. Focus on communication.


Build reputation. Daily business activities can overwhelm, and it is easy to miss small touchpoints that can have a large influence over your business. Email, a functional product of ICT, can transform the way we work and communicate with important stakeholders to disseminate accurate information that will ensure smooth business transactions.

There will be problems and here are two that are being faced by Malaysian SMEs:


Adoption of ICT is difficult. Findings in a study by Junaidah Hashim, Associate Professor show's that adoption of ICT is difficult as this is significantly correlated to the period of adoption. However, adoption of ICT can occur over structured planed phases to ease the process, for example with Delhaize America's gradual adoption of technology eventually leading it to become a key competitive advantage. Understandably even early adoption may pose problems to a SME business, but there are structured services that allow easy adoption into ICT.

Lack of resources. On a side note, is globalization cum internationalization just limited to the 'big boys', multinational enterprises (MNEs)? The answer is no; there has been a large degree of early adoption of internationalization of 'new' companies (the SMEs) in a classification of companies known as "Born-global firms" (one example is Technico). Where internationalization is at the core of the beginning of conception of their business. High adoption of ICT allows these Born-global firms to quickly capitalize on key international markets, meet competition directly, and enhance capabilities to customers with quick implementation of innovative new methods to accommodate tight resource constraints. ICT can be expensive, but as with most industries there are competitive pricing on services that allow budget friendly alternatives to facilitating ICT.

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Technology will be here to stay, and will in one way or another influence your business, and ultimately the decision of whether to accept technology as apart of your business or to acknowledge it only when it is necessary ultimately rests with you. Something positive you can take back from this could be that now you know you are looking for ways you could transform your SME business, and you have already taken the first step.

Photo by Yuxuan Hou

References:

Hashim, J 2007, 'Information Communication Technology (ICT) Adoption Among SME Owners in Malaysia', Vol 2, No 2, International Islamic University of Malaysia.

Joel, Y 2013, Young: Technology opens new business opportunities, Kelowna Capital News, Kelowna.

McClatchy, SJ 2007, Technology creates business opportunities, Tribune Business News, Washington. 

Saleh, SS and Burgess, L 2009, 'Factors impacting the adoption and use of ICT in the Malaysian SME sector', Research Online, Faculty of Commerce, Papers, University of Wollongong.

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