The SME sector is the backbone of major developed economies, as well as contributesto employment and economic growth. In South Africa, SMEs account for 91% of businesses, 60% of employment, and contribute 52% of total GDP. In Nigeria, SMEs contribute 48% of national GDP, account for 96% of businesses and 84% of employment.
Despite the significant contribution of SMEs to the Nigerian economy, challenges persist that hinder the growth and development of the sector. According to the Nigeria Bureau of Statistics, small and medium scale enterprises (SMEs) in Nigeria have contributed about 48% of the national GDP in the last five years. With a total number of about 17.4 million, they account for about 50% of industrial jobs and nearly 90% of the manufacturing sector, in terms of the number of enterprises. It’s no longer new that businesses in every sector are now relying on technology to grow faster, reach more markets and acquire new customers at a breakneck speed. Due to the omnipresent nature of technology, startups and SMEs need to adopt technological solutions to stay ahead of the competition. On the other hand, most Nigerian SMEs are yet to integrate technology into their daily operations. For the few that have adopted technology, their investment is insufficient and when they acquire equipment and software, it is mostly those that are ineffective. This situation is usually due to a lack of funds or inadequate knowledge of the technological tools they need or because they do not even know they need technology for their businesses. Technologies already exist, it is left for SME owners to find the ones unique to their enterprise and integrate them into their businesses. Technology has changed the face of business, business behaviour, and more business processes have been amended to enable organizations to work more efficiently than before. Technology is the future of the business or rather the future of mankind. To be successful and be able to compete at the global level, here are a few ways Technology can impact Nigerian startups and SMEs.
Communication: The increased innovation of telecoms and Information technology is bringing about a great transformation in the business environment, and more businesses are taking advantage of the technological tools and equipment. Mobile devices like smartphones and tablets have combined with the use of the internet to transform the way we do business. Nigerian SMEs can connect to the international business community, everywhere to understand the business trends, tools, and dynamics that can be used to grow their businesses in Nigeria. With different virtual seminars taking place, Nigerian business owners should take advantage of their ICT gadgets to grow their businesses rather than just utilizing terms for just social media cruises.
Email communication is still very relevant in today’s world and it allows you to receive information in real-time. Subscribing to a bunch of business newsletters and bulletins on different business pages will also allow you to get information directly to your emails. Another major change technology brought to business is that organizations can l now connect to customers in an inventive way through social media platforms like Instagram, WhatsApp, Twitter, and LinkedIn. For instance, Instagram and Twitter can help put businesses in the minds of people and they have easy access to them whenever they need their products. Through LinkedIn also, organizations can connect to other business networks to produce new revenue or connections.
Storing and retrieving information: Information storage has also taken a new turn in world technology. The older means of storing information make it cumbersome for businesses to retrieve information when needed. Business owners may conduct several feasibility studies and draw up several business plans which may not be viable at that time, still, the results need to be properly stored pending when the findings can be implemented. Instead of storing them on Personal computers and mobile phones, this informations should be stored via cloud computing which allows you easy access to them anytime and anywhere.
Online Service and Delivery: Innovations in technology have improved the operations of different industries and have helped to turn small businesses into global ones. When businesses are online, it avails them the opportunity to reach more customers even outside their locations. One of the major ways to move businesses online is by building a website or an application that anyone can use regardless of where they are. SMEs in Nigeria should be more inclined to move their businesses online to save costs of operation as Smartphones, PCs and the internet helps businesses to connect with their customers.
These devices are the new method of staying in touch with customers, responding to their inquiries, and attending to their complaints in due time. With access to the internet, businesses are just an app or website away from their customers as entrepreneurs don’t have to be in the office to do these things anymore. When SMEs Develop online platforms for their organizations, customers no longer have to walk into a store to purchase items or products, they can easily do that online and have their order delivered to them.
Customer service: Technology brings businesses and organizations close to customers. Most businesses now use email to answer questions and attend to customer complaints. SMEs in Nigeria can also provide online platforms that allow people who are visiting their websites to connect with them more effectively, especially customer relationship management systems. Building chatbots and virtual assistants unique to their business will make it easier to connect with customers faster. This will not only improve customer relations but also increase customer retention.
Productivity: Technology has made work easier and even more productive. You can get more work done quickly within a short time. The idea of technology is to keep employees focused and use it effectively for productivity in the business. However, companies have to be able to balance both their offline and online activities. Employees should be provided with the right hardware and also be updated on work software such as MS Excel, MS Office suites, CRM, Payroll, etc to keep them working at high proficiency. As much as technology is the best for businesses now, especially for more productivity, it shouldn’t eradicate the input of humans.
Cost management: Technology has provided cost-effective ways of doing work faster and with more quality. Most businesses are looking for ways to manage costs and simplify operations, and technology has made them available. The use of cloud computing, resource outsourcing can improve efficiency, employee performance, and also reduce costs in the process for SMEs.
Teleconferencing: Teleconferencing is one of the ways through which businesses and organizations now hold meetings. It used to be only phone conferencing before, but now it has advanced to web conferencing. It brings together webcams, and audio for online meetings and creates an interactive environment. Office members can see and hear each other, work through documents, and they have a feel of being together in the same place though they are in different locations. When this is integrated into small businesses, it will enable them to broaden their scope to global customers and workers.
Resourcing: Technology has also changed the way businesses are resourced. When SMEs are reluctant to absorb large upfront costs for facilities and services that might have high operating costs, they can go for online resourcing instead because they do not have these facilities but can go the technology way. For instance, cloud computing now allows anyone to store data and information that can be accessed anytime it is needed.
Accounting/bookkeeping: Bookkeeping and accounting are important in a business because it helps businesses to track profits, expenses, inventories, etc. Most SMEs in Nigeria still resort to the manual system of bookkeeping while some do not even keep records at all. SMEs in Nigeria are advised to take advantage of technological innovations such as kippa ( online bookkeeping application ) and Flex finance( expense management application ) to track their finance instead of relying on paper and pen.
Marketing/Advertising: Internet marketing comprises advertising on websites, social media sites, or search engines to increase sales of a product. Technology has relieved small businesses of the need to print adverts for reaching out to new customers. When SMEs adopt the technology of the internet, they can now market their products online with captivating content where customers can access them without stress. Email marketing is a very effective and low-cost way of reaching a large number of people with either newsletters, business updates, or coupons. Online marketing is the new way that allows businesses to reach prospective customers through text messages, online platforms, and social media.
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