Integrating Small and Medium Enterprises with Information and Communication Technology - Essay Example

Integrating SMEs with ICT Introduction Small and medium enterprises (SMEs) have slowly taken a vital role in the economy of almost every country. Forthis reason, many SMEs have also decided to take their business globally in order to gain a wider market. In relation to this, e-business has been integrated to the concept of SME in order to create and establish the company’s name in the digital and global economy. Nonetheless, in order to incorporate the two concepts, it is necessary to look into the social, political, economic, and technological aspect that must be considered in the process. SMEs and E-Business Small and Medium Enterprises (SMEs) are generally defined as the companies or business that have zero to 250 employees and are not subsidised by other large corporations or businesses. Nonetheless, SMEs are defined differently from one country to another. However, most of the time, these are defined in accordance with the number of employees a business has, the turnover, and the economic scale of the business. Furthermore, electronic business (e-business or e-commerce) is defined as any type of businesses that serve or sell using the digital medium or with Information and Communication Technology (ICT). Moreover, an e-business can have three main classifications, and these are the consumer-to-consumer (C2C), the business-to-business (B2B), and the business-to-consumer (B2C) (MacGregor & Vrazalic, 2007; Khosrow-pour, 2006). In line with the globalisation, many governments suggest that SMEs incorporate e-business in order to promote advantageous economic activities (Taylor & Murphy, 2004). On the other hand, prior to integrating a business or a company with ICT, it is necessary to look over the e-economy of a country or a market. E-economy is defined by Booz, Allen, and Hamilton (2002 cited in Oliver & Sanders, 2004, p. 120) as “the dynamic system of interactions between a nation’s citizens, business, and government that capitalize upon online technology to achieve a social or economic good.” In order to guarantee readiness in the e-economy, e-readiness is being created with the following indicators: network access, network society, network economy, and network policy (Nejadirani, Behravesh, & Rasouli, 2011). Access and Usage of the ICT or Network In assessing the network, questions, such as the accessibility, the cost, and the quality of the ICT must be answered. Also, the equipment, network, and services within a given economy or market must also be determined (Nejadirani, Behravesh, & Rasouli, 2011). Furthermore, SMEs are considered as a vital part for the UK economy because almost 99% of the business enterprises in UK are SMEs with almost 60% are employed in this economy. In relation to access and usage of the network, the most commonly used technology is the website of the company, electronic mail, and the Internet. Most of the SMEs, which had employed 10 or more staffs, had already set-up their own intranet. Also, most of these businesses had used wireless technology and electronic data interchange, which depend on the capacity and size of the SME. Furthermore, in the process of automated record-keeping of sales and orders, most of the SMEs use ICT accounting and finance activities. Moreover, the automation of business designs, enterprise resources planning, human resource management tasks, and the production control was also used by SMEs. The shift to the usage of ICT of SMEs has been due to the efficiency that the automation results to, the highly technologised competition in the market, and in order to enhance customer service and employee satisfaction (Dyerson, Harindranath, & Barnes, 2008a). Furthermore, in relation to skills needed in the usage or integration of ICT to SMEs, technical skills are not enough. The ICT department or staff must also have excellent communication skills and customer service skills. Also, the ICT staff must be capable of transferring theories into knowledge that can be sued in practice (Lowry & Turner, 2007). Network in the Society In this aspect, a business or an SME must learn how inclined is the society or the prospect market in the utilisation of ICT. This can be gauged through the individual’s usage of ICT in the workplace and the individual’s personal life. In a global perspective, almost 61% of the adult global population has reported using the Internet. In the United Kingdom alone, only 4% of the whole population are recorded as not having reasonable access to the Internet. In this regard, in a survey conducted in 2003, almost 23 million adults in United Kingdom were using the Internet at the office, school, home, or any locations where the Internet is accessible. Also, 42% of the population already had access to the Internet at home with the use of Internet-enabled devices while 53% already has computers at home. The time that were spent by the Internet users were between one to two hours a day for almost 19% of the users. Furthermore, the users that stayed connected in the Internet for three to five hours composed 20% of the total users, and those who used the Internet for six to ten hours were another 19%. In a weekly basis, those averaging for 11 hours a week were almost 20% of the total population of the Internet users in the UK. Furthermore, due to the ability of mobile phones to connect to the Internet, almost 650 million of the worlds populations have been connected to the Internet. In the UK, 68% of the adult Internet users access the Internet through their mobile phones while in households, at least one mobile phone is present that can access the Internet. Moreover, according to the BBC News, the estimated sales in the Internet, through e-business or e-commerce was over 1 billion euros (Kraut, Brynin, & Kiesler, 2006; Geoghegan, Lever, & McGimpsey, 2004). The Economy of ICT In this aspect, a business of a SME must consider if the government and business in a given economy is using ICT to communicate with one another and the public sector. In terms of the other SMEs, 78% uses the Internet in order to draw customers along with communicating with other firms and suppliers. Aside from the SMEs, the manufacturing and the clothing sector also use the Internet in business processes. However, most of the SMEs that use ICT consider many aspects. First, if the size of the core component of the business is small, then there is a possibility that it does not use ICT. In relation to the age of the business, a business that is younger with younger demographics of employees will most likely use ICT in its business processes. Also, most of the SMEs integrate ICT in their administrative and operational business transactions (Dixon, Thompson, & McAllister, 2002). Furthermore, the government also utilises ICT in order to enhance democracy, governance, internal productivity, participation within the government and other sectors, policies, and the delivery of services. Most of the time, the latter purposes are accompanied with changes of function, establishment of new business models and skills, enhancement of current business processes, and changes in the organisation. The implementation of e-government has opened to new manner of interacting with the society and businesses. There has been an efficient and most satisfying process with the society and business firms. Furthermore, one of the roles of the government is to use ICT in promoting good life. In order to do so, the government must empower businesses, which is supplemented with stable ICT infrastructure (Rabaiah, 2009). Government Services for the Integration and Use of ICT in SMEs Support on the integration of ICT by SMEs has been developed by the European policies and the United Kingdom regional agencies. This is due to their aim to boost and encourage business of the same field or the different fields to be more innovative and grow faster in their industry. The EU aims to be a knowledge-base economy, which can be achieved if the SMEs can compete and create an identity in the global economy. In order to succeed on its goal, there are government agencies that can help in integrating ICT to SMEs and other business. These agencies and activities include business link and electronic skills to business sectors in order to develop agencies. Also, the central government, DTI, and other government partners, together with the South East England Development Agency (SEEDA), and IT courses offered to SMEs also aid in the integration of ICT and SME. However, almost all of the SMEs are unaware of the agencies and activities the government offers to help in the integration of ICT with SMEs. This was due to the unmanageable and bureaucratic processes that these SMEs must undergo first before receiving or utilising the advice or activities (Dyerson, Harindranath, & Barnes, 2008b). Technology for SME Adopting ICT The Internet is considered as the medium for e-business, and with this as its platform, there are also many different means in order to communicate or interact with clients. One of the most common manners is the website, which can be composed of many web pages. This is the SME’s platform for publishing information regarding the product or services where virtual interaction can also take place. Another manner of developing the presence in the Internet is through content advertising. In this manner, a website will be able to connect with other providers, such as music, text, graphics, and videos in order to attract and gain the attention of the clients (Cruz-Cunha & Varajao, 2011). Analysis In order for SMEs to achieve success in the digital economy, it must adopt and incorporate e-business into its business strategies. Also, for these two concepts to work well, there are different aspects that need to be looked into. The most valuable aspect in this integration is the knowledge of the SME of the access, availability, and usage of the target market of the Internet. A considerably high percentage of the target market must be at least present in the Internet by using it as a source of information or a tool for communication. Also, if there is a justifiable population of Internet in the target market, then it is safe to say that access to the Internet is easy. Aside from this, it is also vital to recognise the presence of ICT in the government and the other businesses in the economy. This will allow the SME to connect and interact with the government and other firms in real-time. In this manner, transactions will then be easy and more efficient for all parties. For the SME, it is also beneficial to take part on the advising and knowledge and skill-based trainings that are offered by the local and national government in integrating ICT to businesses. This will give the SME a head start on the digital economy or market and will also be given aid with supplemental materials prior to engaging in the digital economy. Through this, the SMEs will also be aware of the policies and legislation that are acceptable in the given digital economy. Also, there are different technologies that can be used in order to create and establish a name in the digital industry. One of this is the creation of a website, which will hold the information needed by the market prior and during transactions with the business. This will also be a cheaper advertising platform by the SME. The proper utilisation of the said aspects will lead to an efficient and productive integration or adaptation of SME to ICT. Conclusion The role of SME has evolved in accordance with the technology present today. The global presence of SMEs, and even in the digital economy, has been helpful in boosting the business industry of different countries. Nonetheless, it can be inferred that it is not easy to integrate SME with ICT. This process needs thorough study and investigation in order for the integration or adaptation be successful in the global market. Furthermore, it can be inferred that the successful integration of SME with ICT must be supplemented with the knowledge of network access and usage in the desired target market. Also, the society along the policies and the economy must be studied well prior to creating presence in the digital economy. The technology that can be adopted by SME also is vast, which must be taken into consideration by the business. References Cruz-Cunha, M.M. & Varajao, J., 2011. Innovations in SMEs and conducting e-business: technology, trends and solutions. U.S.A.: Business Science Reference. Dixon, T. Thompson, B. & McAllister, P., 2002. The value of ICT for SMEs in the UK: a critical review of literature. Small Business Service Research Programme. United Kingdom: The College of Estate Management. Available at: http://www.bis.gov.uk/files/file38315.pdf [Accessed 20 October 2012]. Dyerson, R. Harindranath, G. & Barnes D., 2008a. National survey of SMEs’ use of IT in fours sectors. In: ECIME (European Conference on Information Management and Evaluation), 2nd European Conference on Information Management and Evaluation. London, UK, 11-12 September 2008. 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World Applied Sciences Journal, 15 (5), pp. 756-764. Oliver, L.E. & Sanders, L. eds., 2004. E-government reconsidered: Renewal of governance for the knowledge age. Canada: Saskatchewan Institute of Public Policy. Rabaiah, A., 2009. Best-Practice Framework for Developing and Implementing e-Government. Brussels: Uitgeverij VUBPress Brussels University Press. Taylor, M., & Murphy, A., 2004. SMEs and e-business. Journal of Small Business and Enterprises Development 11 (3), pp. 280-289. Read More