Using digitalisation to enhance SME operations
Firms of all sizes, across all sectors, are increasingly equipping their staff with digital tools.
Today, over half of employees in the median firm now use computers with Internet access. Digital tools bring many significant benefits for firms.
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In other words, digitalisation reduces transaction costs by providing better and quicker access to information and communication between staff, suppliers and networks. For small and medium-sized enterprises (SMEs), it can help integrate them easily into global markets, through reductions in costs associated with transport and border operations and it significantly enhances the scope to trade services.
According to the Organisation for Economic Co-operation and Development (OECD), digitalisation also supports innovation and greater access to innovation assets, as well as the potential for firms to generate data and analyse their own operations in new ways to drive improved performance.
Despite the benefits and opportunities digital technologies bring, and the significant increase in up-take in recent years, many SMEs continue to lag in adoption, and for smaller SMEs, with 10 to 49 employees, digital adoption gaps, compared to larger firms, have grown over the last decade.
COVID-19 and SMEs
SMEs often have myriad of challenges and, therefore, the outbreak of the COVID-19 pandemic brought in its wake devastating problems.
Lockdowns and social distancing imposed a radical rethinking of business models, with SMEs and other firms moving operations online or implementing smart working solutions at short notice in order to remain in business and overcome disruptions in supply chains. Early evidence from business surveys worldwide point to up to 70 per cent of SMEs having intensified their use of digital technologies due to COVID-19.
Malls, restaurants and eateries, boutiques, among many other micro and small businesses, had no choice but to leverage the opportunities that the digital platforms brought in its wake to stay alive. This effort was supported by the government when it was forced to release additional bandwidth to the telcos to be able to carry the load as many people were forced to use data.
This was also complemented by the smart thinking of banks which offeres, in a more aggressive way, its unique digital platforms to support the new direction of SMEs which did not allow the pandemic to silence their operations.
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In spite of the successes, experts still believe that many businesses, particularly those in our side of the world, have not had the time or the advice needed to plan this transition well, that is to select the right digital systems, to upgrade digital skills, develop the right protections and security and fully customise and understand the potential of these new tools. For these firms, the transition is not yet complete, and comes with risks.
In Ghana, for instance, there have been reports to the Criminal Investigations Department of the Ghana Police Service which has seen a spike in cybercrimes reported since the beginning of the COVID-19 pandemic, with a fourfold increase in cybersecurity complaints.
Considering the small financial capacity, size and professionalism of these SMEs, the costs to them regarding a breach is often large, and mostly well beyond the average SMEs’ available cash reserves.
It’s important to note, therefore, that while accelerated adoption of digital tools may be a silver lining to the crisis, there remains a continuous need for advice, support and guidance from reliable sources to cement the transition, address risks, and exploit the potential of the new tools.
SMEs contribute a lot to our economy and therefore, support through digital platforms to them must be deliberate, structured and simple for them to appreciate and buy in.
Banking Apps
Many banks that are SME focused, support their clients using special Apps. For instance, there is an electronic payment solution that enables customers to securely and conveniently carry out transactions on their accounts such as funds transfer and payment of goods and services, using their mobile phones or devices. It is available on Android and IOS Operating systems.
There are Point of Sale (POS) systems which are multi-currency denominated terminals (GHC & USD); Accepts both foreign & local cards (Visa, Mastercard & China Union Pay); Accepts mobile money payments (MTN & Vodafone) at no cost to merchants and Safe & secured payment acceptance channel
This product allows merchants to receive payments from various funding sources (Bank Accounts, Mobile Wallets & Card Schemes); Instant credit of merchant's account; Cost effective - no set up fee and relatively lower interchange fees compared to other payment acceptance channels and Merchant portal for effective monitoring and reconciliation.