How Information Technology has empowered SME’s In Kenya.
SME’s (Small and Medium Sized Businesses) have experienced massive rapid growth in Kenya in the last 16 years. This can be attributed to improved access to financial services and the growth in various sectors of the economy as well as innovations and competition in these economic sectors. The following are a few ways Information Technology (IT) has contributed to empowering SME’s.
- Reduced Costs
IT has helped many SME’s reduce costs, these costs range from production costs,labour costs, transport costs and costs of acquiring materials/services as well as overheads like taxes. Case in point, a business acquires computers, networking equipment, printers, softwares and systems. These help the business tap into the power of the internet to acquire new information and access to buyers/sellers at only the cost of the internet connection
Production costs are drastically reduced when software is used to run machinery that automate production of goods, this reduces wastage of materials thus keeping material acquisition costs in check.Labour costs are eliminated or reduced because less personnel are needed in the production process as it is automated. Transport costs are reduced when businesses are provided access to many options for transporting goods at various costs on various timelines through the power of services offered by the internet. These costs are outsourced at a reduced rate and with more efficiency. Fixed costs like taxes and operational costs like Labour and real estate (premises and factories) are reduced when SME’s use Information technology to outsource these functions and services to other companies at reduced rates and for certain periods of time through short term arrangements and contracts that can be negotiated. This allows SME’s to be very flexible and agile thus able to move and adapt to changes in the local or global market, the definition of the office is no longer a premises but a presence. There are local companies on the internet that provide real estate spaces, factory spaces and equipment at flexible and affordable rates. All that can be arranged over the internet through teleconference meetings and use of collaborative tools like Skype and Office365/DocuSign to reduce transport costs and venue costs for meetings.
Taxes have been simplified for businesses through use of the tax platform and excellent customer case support offered by KRA that enables SME’s to file all their paperwork and get their permits and approvals faster as well as enabled faster resolution of pending issues/matters through the customer case support.
- Increased Revenues
IT has provided SME’s with the ability to increase the amount of revenue they obtain from the sale of their goods and services with minimal costs of getting such revenue. The widespread availability and use of affordable accounting software and systems both offline and online as well as access to more payment modes like MPESA,credit/debit cards and RTGS payments has enabled SME’s to avail more and faster payment options to their clients. Clients don’t have to bear the cost of SME’s providing these services because these businesses could have various accounts on these platforms to receive the money and all these accounts can be linked and accessed in real-time using systems and software available to these businesses. By providing more convenience and ease of payments to clients, irrespective of the client’s geographical location, SME’s get to increase their revenues in a much quicker and cost effective way.
- Opened up access and reach to More Markets
IT has provided SME’s access to the vast opportunity that is the internet, with billions of users in all continents. The open nature of the internet allows businesses to setup online segments of their business and allows clients from beyond our borders to buy goods and services from them. Platforms like Google, Facebook, Twitter, Amazon, EBay as well as SME’s setting up online shopping platforms allows SME’s to quickly put up their goods and services for sale to customers around the world and companies like DHL, Sendy and FedEx have setup online logistics platforms that allow SME’s quick, affordable and easy ways to avail these products to customers wherever they are.
- Improved Products and services
IT has provided access to knowledge and equipment to SME’s which is being used to improve the quality of products and services. Use of industry standards and quality assurance testing equipment and software ensures products and services meet local and global standards in quality. Therefore, SME’s are able to innovate and come up with new products and services for the local market.
- Capture customer sentiment/feedback
IT has enabled SME’s to tap into the power of social media and to gather information about their products and services from their customers, potential clients and the public at large. SME’s have also setup customer feedback forms and mechanisms online to allow customers to give their feedback anonymously without fear of victimization.SME’s thus have the ability to measure customer sentiments about their products and services and real-time and thus have the ability to react and improve their products and services using such input.
- Reduce and Mitigate risks
IT has empowered SME’s to reduce risks through outsourcing and automating as well as securing some of their operations. Use of Security systems, secure payment systems, streamlined processes and the ability of Information Technology to authenticate, provide confidentiality and facilitate speedy processing has helped businesses reduce, mitigate and eliminate risks such as physical and online security breaches as well as robberies.
- Improved Security
IT has enabled SME’s to secure access to business processes by restricting information and facilities to authorized personnel in a secure and cost effective way. Use of Biometric sensors, passwords and encryption has empowered SME’s to ensure secure all its information and some of its physical facilities.
- 8. Enhanced Marketing
Lastly SME’s need to advertise their products and services to the public and to the various markets and audiences they need to reach.IT has enabled SME’s to tap into the power of social media and the web/internet through tools and platforms like Linkedin,Youtube,Facebook,Twitter,Snapchat,Pinterests,Google, Instagram etc. to reach millions within a very short time with information about their products and services at minimal to no cost at all to these SME’s.Scenarios like trends of products and services gives these SME’s a lot of marketing value that is normally gotten from traditional media like TV and radio. This in turn leads to raising more awareness about an SME’s products and services to its customers and general public which has positive implications on its revenues and profits.
All in all, through this article I have shed insight into how SME’s in Kenya can and have been taking advantage of Information Technology to empower themselves and power the economy.