What barriers exist to the take-up of e-Business by SME?

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Ramesh Raja CEO August 05, 2017 18:00 4 min read 856 views so far!

The  small and medium sized enterprises (SME) play an important role in the development of a country’s economy at both micro and macro levels. In Europe, nearly 99% of the enterprises are SMEs while the 70% of the workforce are working in SMEs. In the present digital economy, SMEs are in a situation to have a digital presence to engage with the customers and grow their base. Being said that, earlier studies related to National Economics says SMEs adoption in ICT (Information and computing technology) is still very low and there are number of obstacles have been identified. The government bodies, business and research institutes are engaging for the past few years towards adoption and development of ICT in SMEs. All kind of organizations have to start e-business to get succeed in today’s digital economy and they should think about the future business strategy by use of internet technology. If an organisation aims to lead and dominate the market in a particular niche, it should seriously consider leveraging digital technology. A country’s economy shall flourish when business firms collaborate with each other through the digital medium, thereby ensuring free movement of goods and services.

In Many SMEs, the importance given to promote electronic business in lesser than the importance given to unwanted management and unusual leadership. Business of all sizes can outrun their competitors easily by adopting eBusiness but still a significant amount of SMEs are not aware of the advantages of the digital ecosystem. E-business builds up an environment that makes enterprises to hold greater market share and be profitable on a longer term. In this digital era, many governments, by pushing the SMEs towards ICT adoption, are trying to make their economy new, knowledgeable and create more job opportunities.

Entire U.K., homes approximately 3.7 million of SMEs which constitutes about 12 million people out of which 55% are employed in private sectors and accounts 40% of GDP with an annual turnover of 1+ trillion pounds. Nearly 2.5% of SME business owners innovate the new technology, with early adopters constituting 13.5%, laggards holding 16%, while remaining still unaware of the difference that ICT adoption can make to their business. Basically in an micro enterprise the owner or  manager are responsible for all the processes engaged in business including decision making. The attitude, motivation & behaviour of the business owner are the main reason behind a few SME adopting the ICT while a few facing difficulties in the same.

Nearly 65% of the small and medium enterprises in U.K doesn’t have a digital presence for their business. The main barrier that stops SMEs  from adopting ICT is that they don’t have much interest or awareness on it. The people don’t have good education background to be aware of the internet technology. Many of the organisations coming under SMEs are letting strangers to create and maintain their mini-websites. And also due to lack of knowledge and awareness, people are finding greater difficulties in running their businesses which can be avoided by the use of software systems. 

Actually many small firms are unwilling to adopt and align their business with ICT because they feel that it doesn’t suit their needs or the type of the business. Nearly 75% of the firms engaged in small business and many are operated by a single owner or manager who find it much difficult to maintain a balance between their day-to-day operations and digital presence. Many firms don’t have an electronic manager to develop their business through digital technologies like inventory systems, CRMs and ERPs. They are also skeptical towards adopting cloud technology to manage their finances due to privacy issues and fear on data breach of their customer or employee details.

But these days adoption of digital technologies by the SMEs are growing at a rapid phase. Business owners are finding multiple ways to grow their business by embracing digital technologies irrespective of their psychological barriers. Today digital adoption has become a necessity rather than a added advantage.

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