The reliance on the Internet of things (IOT) and Technology has rapidly increased from many larger businesses to smaller ones. From their daily operations to general functions, every task needs some form of internet or technology. Information, communications, and technology (ICT) play a pivotal role in all these functions, from printers, laptops, online file storage, and web-based applications, the impact of technological advances is huge across the various industries.
One of the key areas of value that science and technology provides is to act as an enabler to enterprises such as SMMEs (Small, Medium & Micro Enterprises) and other various businesses. By utilizing ICT resources to the small business sector, especially in a growing and developing economy like South Africa’s, employment opportunities are maximised and people are allowed to contribute to the development of the economy. By understanding how ICT impacts the future and progression of industries, significant growth can occur and contribute to the future of SMME development.
Here Are 6 Advantages That ICT Has on SMME Development:
1. Brings in More Solutions
It is possible to say that the Internet has become one of the most important vehicles of globalization. It is an instrument used to provide more visibility to companies which reduce the gap between small and large enterprises. ICT offers SMMEs more provision to access markets through the bridging of this gap. And it also lowers operational costs when it comes to geographical distances as well as foreign customers. ICT is the conduit of empowering SMME development. It allows structures to be more flexible and productive and deliver better services. By using ICT tools and resources such as the internet, social media, web-based localisations, technology software and services, and more, you provide your company with new, efficient, and quicker solutions to be more innovative and productive. Other solutions that ICT contributes to SMME development include more visibility, access to more information, allows your enterprises to overcome traditional trade barriers, and facilitate quicker and more efficient financial transactions.
2. Gain More Operational Efficiency
Various statistics have proven that new digital technologies can reduce operational costs by 20-30% in areas of capital and labour. Digital transformation plays a key role in advancing operational efficiency as it allows SMMEs to decrease overall expenditure and optimize operational and marketing costs. ICT resources, including IT-driven tools such as Supply Chain Solutions, cloud-based applications, and ERP software all play a role in the advancement of SMME development, thus resulting in greater operational efficiency and productivity. Greater operational efficiency results in greater productivity. The positive effect ICT has on an enterprise’s performance results in great productivity, profitability, market value, and market share.
3. Brings About Digital Transformation
Restricted global exposure is one of the present limitations that SMMEs experience. Digital transformation and IT ecosystems within ICT can have a growing impact on SMME development as it offers new and prolific opportunities for them to participate in the global economy. By acquiring digital transformation, you adopt the latest and emerging digital technology to drive your business through strategic plans and organisational change which increase revenue while providing significant value. The expansion of internet access and growing smartphone users can change the future of the world economy. Enterprise application providers, technology, and infrastructure vendors have all taken the opportunity to capitalize on the power of innovative ICTs to shift traditional ways of doing business. SMME development can utilise digital transformation to leverage new technologies to ensure scalability and elasticity demanded by customers.
4. Reduces Costs and Increases Productivity
The key objective of any business is revenue. SMMEs have shown great capacity to absorb labour despite the largely unskilled. By adopting technology in their industries, SMMEs have shown greater profitability. Investing in skills development has tremendous long-term effects for SMMEs. The higher the growth of the business, the greater the revenue. Digital transformation has incentivized SMMEs dramatically. Employees can save more time by focusing on getting the task done instead of worrying about how to get it done. Using e-mail, e-commerce, and social media networking significantly cut down the costs you use on physical transportation involved in banking, sending mail, advertising, and buying goods. Adopting ICT offers an opportunity not just for companies but for individuals to grow as well. Growth is the key component of SMME development and how well it is utilized in everyday tasks and functioning, affects the rate of productivity and costs you get to save. Positive productivity as a result of adopting ICT tools and resources results in immediate performance measures such as process efficiency, service quality, cost savings, flexibility within the enterprise and its process, as well as customer satisfaction.
5. Development of Supply Base Within the Respective Industries
Any enterprise needs to leverage off ICT to expand its reach. A lack of customers, increasing competition, and the rising cost of supplies are felt more severely by micro-enterprises. Because these enterprises operate in small, location-specific, low-income niche markets, broader markets are found to be virtually closed to them. Having a completely offline presence limits a business from market reach as well as supplier base. With an online, digital presence you create a higher and more engaged customer base. Remarkable opportunities for SMME development to grow and expand their market reach are a result of using customized technology and online platforms as it offers great accessibility. However, the acquisition of efficient and reliable tools and access to ICT represents the gap of real sustainable expansion. It is therefore vital that the appropriate technology be developed in an effort to promote SMME development whose owners may not possess the skills to operate sophisticated technology. Being able to expand into new markets enables greater competition and allows for a larger supply base. This creates support for better supply chain solutions and access to procurement.
6. Brings Radical Economic Growth
Technological transformation can positively or negatively impact economic growth depending on how ICT advances are implemented. It plays a key role in technological development as technological information is an external factor that has great public character. For the past 25 years, the South African government has been experiencing a structural imbalance with common challenges such as unemployment, poverty, and inequality. However, SMME development is the key to overcoming these challenges. And the advancement of ICT is what gives rise to the transformation that occurs within SMME development. This is what increases the growth rate of the economy at a macro-level and profits and market shares of these enterprises at the micro-level within the country or region. One of the economic growth indicators is technological advancement. Technological advancement consists of the whole system of information, organization, and techniques required in the production process. With the help of ICT, more outputs can be obtained with the use of the same quantity of inputs in any of the production processes. This results in savings to the workforce and capital.
To understand how ICT growth impacts and reflects SMME development, a few questions need to be asked: How well do you know where change is occurring? Where is digital having the most impact? Do you know which customer journeys matter? Are your teams collaborating across functions? Do you have a disciplined test-and-learn approach? Are your budgets tied to progress? Are your people empowered to act?
Implementing ICT and digital transformation can seem daunting with the lack of skill or experience an SMME business can face. It brings a new dimension of creativity, innovation, and strategy to a business. DigiRev offers companies like you many ICT and technology-driven tools through a variety of services to help you and your customers transform the way business gets done and to help you keep up with the constantly changing digital landscapes of respective industries.
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