ICT Africa Headline News

Leveraging ICT for SME Growth

12 June, 2014

Source: This Day

The recent x-ray of the impact of ICT on small and medium enterprises by Minister of Communications Technology, Dr. Omobola Johnson; Chairman of Bharti Enterprises with investment in Airtel, Mr. Sunnil Bharti Mittal; CEO, Health Plus, Mrs. Bukky George; and several other stakeholders in the information and communications technology (ICT) is a welcome development, writes Dele Ogbodo

SMEs though small in sizes and operations, are believed to be the drivers of economies, if well positioned. But in Nigeria, SMEs are yet to find their bearings, with majority of them still trying to scratch the surface of their businesses. It is for this reason that the Minister of Communications Technology and her counterpart in charge of Trade and Investment, decided to put together a one day conference in Abuja to discuss how SMEs could leverage technology to grow their businesses.

The setting was unique. If you like, call it mixture of who is who in the ICT and Investment sectors. They have gathered, courtesy of the ministers of both ministries to brainstorm on how ICT could be used to drive SMEs in the country, since according to them, there seems to be some missing links between the use of ICT and the growth of SMEs across the country.

Also, the organisers averred that effective application of ICT in the SMEs sector would drastically lead to job creation. The roll call at the conference included: Johnson, Bharti, the Managing Director of Computer Warehouse Group, Mr. Austin Okere, and the Director-General, National Information Technology Development Agency (NITDA), Mr. Peter Jack. While from Investment/SMEs sides, were Managing Directors of Investment companies and SME firms, as well as Chief Executives of banks.

Using ICT to stimulate SMEs growth

The Minister of Communications Technology, who was the first to speak at the conference, said the role of ICT in an emerging economy like Nigeria cannot be underestimated at this point in time. She was of the view that SMEs players across the country were not using the potential advantages and benefits embedded in the ICT sector to grow their businesses. While noting that ICT is the fastest growing sector in the Nigerian economy, she said SMEs were not leveraging ICT to stimulate growth in the industrial sector. According to her: "One of the mandates of the ICT ministry is to support and ensure that those within the SMEs can appreciate and empower themselves using or leveraging ICTs."

She however acknowledged that there has been missing link between those two mandates in using ICTs to drive and support the growth of SMEs.

She insisted that the use of ICT in driving SMEs' growth, would bring about the much expected development among SMEs.

Johnson said: "We know that we have about 17 million SMEs, but the challenge is that they don't contribute as much as they should to Gross Domestic Product (GDP) or to industrial development and these are the areas where Trade and Investment has been driving at."

"We also know that ICT is an important vehicle to improve the productivity of SMEs, to accelerate their growth, increase their access to markets information for decision making, and for reduction of processing time, hence there is need for ICT to embrace technology tools on enhancing their businesses," she added.

Why do SMEs shy from embracing ICT as empowerment tools, Johnson asked, but again said the reason was that they don't understand the benefits of ICT because they are not in ICT sector, secondly, they don't know how to use ICTs. Thirdly even if they cross the two hurdles of knowledge and expertise, they cannot afford them because they thought that the cost of ICTs, whether hardware, software or internet access, are expensive and above what the average SMEs can afford.

It is a clear fact that for the large number of SMEs, ICT utilisation is restricted to their mobile phones, SMS, emails and may be for the very big ones, that have some forms of accounting package that manages their finances, and so what has happened over the years is that the SMEs have not been able to make full use of the powerful tools of the ICT to grow their businesses.

The focus of the conference therefore, was to expose SMEs to the benefits of using ICT tools to grow their businesses.

Stakeholders at the conference explained that the application of cloud technology for instance, could help demystify ICTs so that entrepreneurs will begin to understand the importance of ICT in their businesses. Globally, ICTs and technology tools are meant to reduce the cost of production and increase efficiency in business if properly utilised. In order to reflect this on SME business, the Ministry of Communications Technology had since come up with various technology initiatives that would drive SME growth in the country.

The ministry has equally been showcasing different kinds of technology that are being developed specifically for SMEs. Telecommunication operators are doing tremendous amount of work in making sure that ICTs are acceptable and relevant to the SMEs.

The ministry is also doing a lot of things to improve local content, and to make sure that local contents are available for SMEs. A lot is also being done to ensure availability of internet access at affordable rates. These are some of the ICT tools that SMEs could leverage to boost business according to the conference.

Role of telecoms companies

Speaking from the background of India experience, Bharti, said ICT remained an essential component of growth of SMEs in giving a jumpstart in a developing country like Nigeria. While underscoring the role of telcos in SMEs development, he said: "I must also say that life has changed for the SMEs in the last two decades, not only in the area of access to capital, which has become much easier, but also in the area of the use of technology in driving their businesses. You can seek an idea today and get it done today like venture capitalists investment who are ready to buy ideas."

"In the past, entrepreneurs were subjected to surrender their assets like buildings, lands or machineries before they get bank loans. I think that time has changed, and the SMEs now have the opportunity to easily access capital for business development," Bharti said.

Many of the infrastructural challenges to SME development in the past, are no more, as new technologies are now available for the development of the SMEs sector and therefore it is not surprise today in India that more SMEs are adapting to the various tools of technology that are available. Nigerian SMEs have such opportunities to also do so.

According to Bharti: "If you look back ten years ago in India, everybody has to buy the hardware, you need to invest in IT infrastructure, you need to train people to live with it and by so doing, many of the SMEs started shifting towards getting more technology savvy. Today they are familiar with the ICT tools and they are using them effectively to grow their business and to also remain in business."

According to him, SMEs in Nigeria can also make use of technology to drive their businesses and contribute to GDP and economic growth. I am told that 96 per cent of the bulk of the economy actually rest on 17 million SMEs operating in the country, that is a very large base of business, India is not different, it has about 26 million SMEs, which provide massive employment and economic momentum for the country.

He advised that government and the regulators should ensure that there is a robust environment for telecommunications companies to provide quality service in the country, adding that they need to invest in the next generation of broadband services to achieve it. According to him, the developed world has surpassed the fixed mobile telephony, and is largely depended now on mobile broadband and this will help to drive SME growth to a large extent in Nigeria.

The ICT savvy entrepreneur

Speaking on how she has been able to use ICT to grow her company from a small office to several offices across the country, the Managing Director of Health Plus, Mrs. Bukky George, said: "The use of ICT has been good to us, when I think of the fact that from a 4-employee mom and pop pharmacy in 1999, we have grown to a med-sized business over the past 15 years and ICT is one of our key success factors."

"Today with 380 staff and in 29 locations, spread all over the country we sign-in via the biometrics system. The date and times clocked-in are instantly viewable online at the head office, giving us the capacity to instantly identify unauthorised absence and late comers and issue the appropriate queries before 12 noon on a daily basis." George said the company has been able to use social media and digital marketing to increase market share at reasonable costs. She added that ICT has helped her Pharmacy outfit to grow enormously, especially in the last three years. She advised local software developers to come up with software solutions that would drive local business in the country.

ICT solutions

The Managing Director of Computer Warehouse, Mr. Austen Okere, who made presentation at the conference, said several Nigerian IT firm have made some progress in providing the much needed solutions to help the growth of SMEs across the country.

For instance, he said there are two major drivers that have made it possible for his company to change and tailor some ICT business model to suit the SMEs. "We have gone from 6.0 Megabite to 9 megabite. We are able to change our business module from the supply and services only module to a software modern that we have developed and put in the clouds to help SMEs.

Okere said his company has gone into partnership with one a major telecommunication service provider to provide micro-finance banks with a system that would democratize technology that they can use to provide banking services to these SMEs. However, Okere stated the partnership in most cases does not fulfill its objectives because some of these SMEs could not afford a full IT department.

According to him, one of the hurdles that SMEs face is the lack of proper record in their books, adding that this has prevented them from accessing bank facility. He advised SMEs to leverage the local software developed for small businesses in order to gave strong business growth.

For ICT to be able to contribute meaningfully to SMEs growth, he advocated for skills education and training among the SMEs. Technology, no doubt will boost SME growth. It is therefore important for SMEs to embrace technology tools to further enhance their businesses.

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